Legal Question in Business Law in California

Re: business

Whether or not you have a business license is independent of whether or not you are doing business. As to if and when expenses can be deducted, this is a question for an accountant/CPA.

Re: business

Business expenses incurred before obtaining a business license are deductible. Havling or not having a local license is irrelevant to the IRS except that if a question ever arose whether yours was a real business or an attempt to write off a hobby pursuit, having a business license might be one additional shred of evidence pointing toward a serious business operated for profit.

On the other hand, the IRS does not allow a business or its proprietor to deduct expenses incurred in investigating a business opportunity. Only expenses incurred in the actual operation of the business are deductible.