Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

1120 returns

Start up Costs

This template summarizes the start-up costs to be amortized, calculates the amortization expense and produces a tracking schedule for amortizing the expense in future years.  The taxpayer must make a timely election to amortize the start-up costs. Otherwise, they are capitalized and not amortized.   Entering account numbers for each expense item can generate a reclass entry.  If the input sheet is completed, a journal entry is also generated to record the amortization expense.

Entering Information

All of the information needed to produce the calculations is entered on the Input worksheet. The yellow highlighted cells are calculated fields, and no data should be entered in these cells.  Gray cells are not calculated fields, but data should not be entered in these cells.

Enter the following information:

  • Amortization period elected (Default is 60 months, but can be overridden.)
  • 2004 Jobs Act election period (Default is 180 months, but can be overridden.)
  • Date business began
  • First tax year (Enter the first tax year-end.)
  • Months in first tax year (This is calculated as the number of months from the business start date to the first tax year-end. The calculated value can be overridden.)
  • Expense type categories (Ten default categories are supplied, which can be edited.)
  • Expense type (Select from the drop-down menu.  Choose from the categories listed in the Expense Type Categories box.
  • General ledger (GL) number [Required only if a journal entry is to be generated to reclassify costs from detail accounts to a start-up cost (asset) account.]
  • Description (Optional - provided for information purposes only.)
  • Cost (Enter as either a pre 10/23/04 cost; a 10/23/04 – 12/31/09 and post 2010 cost; or as a cost for years beginning in 2010.)