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Deductible new business expenditures

Costs that a new business incurs when it's just starting, like legal fees or market research, which can be subtracted from the business's taxable income to lower its tax bill.

Start-up expenditures

Costs paid or incurred in connection with investigating the creation or acquisition of an active trade or business, or in connection with creating an active trade or business, which would normally be deductible if paid or incurred in connection with an existing business.

Organizational expenditures

Costs related to forming a corporation or partnership, such as legal fees for drafting partnership agreements or corporate charters, which are chargeable to a capital account.

Internal Revenue Code of 1986

The main body of tax laws for the United States, which the Internal Revenue Service (IRS) enforces.

Amortization

The process of spreading out the cost of an intangible asset or expense over a period of time, rather than deducting it all at once.

Net Operating Loss (NOL)

When a business's deductible expenses are greater than its taxable income, resulting in a negative profit that can sometimes be used to reduce taxable income in other years.