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How to expense and amortize start-up costs or organizational expenditures in ProConnect Tax

by ProConnect Tax Online Updated 7 months ago

This article will assist you with expensing and amortizing start-up costs or organizational expenditures in Intuit ProConnect.

Start-up costs and organizational expenditures are typically capitalized or amortized over five years. However, for costs incurred after 10/22/2004, up to $5,000 of these expenses are eligible to be expensed as a deduction. The remainder is amortized over fifteen years. This deduction is phased out dollar-for-dollar for costs exceeding $50,000.

Follow these steps to enter start-up costs or organizational expenditures:

  1. Go to the Input Return tab.
  2. Go to the Depreciation quick entry screen:
    • Individual, Fiduciary, or Corporate: Deductions > Depreciation
    • Partnership or S Corporate: Ordinary Income > Depreciation (4562)
    • Exempt Organization: Expenses > Depreciation
  3. Enter a Description of property.
  4. Select the appropriate Form from the drop-down list.
  5. In the Category field, select 8=Amortization.
  6. For Date placed in service, enter the date that the expense occurred.
  7. For Cost or basis, enter the amount of start-up cost or organizational expenditure.
  8. Click inside of the Method field to open the drop-down list.
  9. Select Nonrecovery methods, then press 91=Straight Line.
  10. Click the Details button.
  11. Scroll down to the Regular Depreciation subsection.
  12. Enter the desired number of years in Life or class life (recovery period automatic).
  13. Select the appropriate Amortization code section from the list.
  14. Enter the actual expensed amount (up to $5,000) in the Basis reduction (amortizable costs expensed, ITC, etc.) field.

Follow these steps to include these costs on the balance sheet:

  1. From the left of the screen, select the applicable Balance Sheet screen:
    • Balance Sheet (Corporate)
    • Balance Sheet, M-1, M-2 (Partnership)
    • Balance Sheet, M-1, M-2, M-3 (S-Corporate)
  2. Select Balance Sheet.
  3. Select the applicable screen:
    • Assets, Liabilities and Capital (Corporate)
    • Federal (Partnership or S-Corporate)
  4. Locate the Assets section.
  5. Enter the expenditure amount in the Intangible assets * field under the Ending column.
  6. Enter the same expenditure amount in the Less accumulated amortization * field under the Ending column.
  7. Go to the Check Return tab.
  8. View Schedule L of the main form. 
    • The two amounts will offset each other on the Balance Sheet.
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