As part of the "Small Business Jobs Act of 2010 Tax Provisions, IRS allows increase in amount allowed as deduction for start-up expenditures in 2010.
Per the IRS, "for taxpayers starting an active trade or business, the new law increases the amount the taxpayer is allowed to elect as a deduction for start-up expenditures under section 195(b) for taxable years beginning after December 31, 2009. Section 2031 allows up to $10,000 as a deduction for start-up expenditures and provides for a dollar-for-dollar reduction of the $10,000 deduction if startup expenditures exceed $60,000.
This expense should be claimed as an “Other Deduction” on business returns, such as the Form 1120, 1120S or Form 1065, or as an "Other Expense" on the related Form 1040 Schedules C or F, beginning with the 2010 tax year. The remaining balance of start-up expenditures is deducted ratably over 180 months on Form 4562, Depreciation and Amortization."