What qualifies as a start-up cost
Section 195 covers expenses paid before the business begins to (a) investigate the creation or acquisition of an active trade or business, or (b) create an active trade or business, that would have been deductible if paid by an existing business. Examples: market research, advertising before opening, salaries and fees for executives consulting on the business, travel to find suppliers or customers.
The $5,000 immediate deduction
You may deduct up to $5,000 of start-up costs in the year the active business begins. The $5,000 phases out dollar-for-dollar to the extent total start-up costs exceed $50,000. Above $55,000 in start-up costs, none of the immediate deduction is available — all start-up costs are amortized.
15-year amortization
Start-up costs not deducted immediately are amortized straight-line over 180 months (15 years) beginning in the month the active business begins. Amortization is reported on Form 4562 Part VI in the first year and continues without re-filing 4562 in subsequent years (unless you place additional amortizable assets in service).
When the business "begins"
A business begins when it has acquired the necessary assets and is open to do business — a retail store opens its doors, a service provider has the website live and is taking calls, a freelancer accepts the first paying engagement. Pre-business costs are start-up; post-opening costs are ordinary business expenses.
Organizational costs
Sections 248 (corporations) and 709 (partnerships) provide an identical $5,000-immediate / 15-year-amortization treatment for legal and filing fees to form the entity. The two pools are tracked separately even though the rules are parallel.
Where this fits in the larger Schedule C picture
Schedule C has more than two dozen named expense lines plus an "Other expenses" catch-all. For most small businesses, four or five lines drive the bulk of the deduction total — vehicle, home office, depreciation, contract labor or wages, and supplies — and the remaining lines individually contribute small amounts that nevertheless add up. Treating each named line as a recurring decision rather than an afterthought, and revisiting the categories each January, often surfaces $2,000–$5,000 in additional legitimate deductions that a less disciplined process would have missed entirely.