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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchIn 2024, Kamala Harris proposed raising the federal deduction for small-business startup costs from $5,000 to $50,000 and allowing a new business to claim it immediately or in a later year. That was a campaign proposal, not an amount business owners should assume is available under current tax rules. IRS Publication 583 describes a $5,000 startup-cost deduction, a phaseout, and amortization of remaining costs.
What Harris proposed
The Harris-Walz campaign’s 2024 economic-policy document proposed a tenfold increase in the startup-expense deduction, from $5,000 to $50,000. It also proposed letting a new business claim the deduction in its first year or defer it to a future year. The campaign’s example was a business that has a loss in its first year and waits to claim the deduction until later, when it starts making a profit. Harris-Walz campaign policy book
The proposal’s timing flexibility was a campaign concept, not a set of implementation rules. The document does not specify eligibility definitions, limits, elections, or how the proposed change would coordinate with other tax provisions.
In a September 25, 2024 speech at the Economic Club of Pittsburgh, Harris said she would raise the deduction from $5,000 to $50,000 and pair the proposal with low- and no-interest loans for small businesses that wanted to expand. The statement described her campaign position; it was not enacted statutory language. Speech transcript
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The campaign document also said new small businesses spend an average of $40,000 to get set up in their first year. That figure is the campaign’s claim; its underlying cited source has not been independently verified here. Harris-Walz campaign policy book
How IRS guidance describes the startup-cost deduction
IRS Publication 583, dated December 2024 and reviewed October 7, 2026, describes an election to deduct up to $5,000 of startup costs. The immediate deduction is reduced by the amount those costs exceed $50,000. Startup costs that are not deducted must be amortized. IRS Publication 583
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Startup costs are expenses incurred before a business begins operating. The IRS gives advertising, travel, surveys, and training as examples. The $5,000 deduction is therefore not a blanket allowance for every expense a business incurs after opening.
Organizational costs are a separate category. Publication 583 describes a distinct deduction of up to $5,000 for those costs, with its own phaseout. The Harris campaign proposal discussed startup expenses; it does not establish that the proposal would also have changed the treatment of organizational costs.
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Proposal compared with the IRS-described treatment
| Feature | Harris-Walz 2024 proposal | IRS Publication 583 (12/2024) |
|---|---|---|
| Maximum startup-cost deduction | $50,000 proposed | Up to $5,000, subject to a phaseout |
| Phaseout threshold | Not stated in the campaign document | The $5,000 deduction is reduced by startup costs above $50,000 |
| Costs not deducted immediately | Proposal describes a choice to claim the deduction in a future year; detailed rules are not stated | Remaining startup costs must be amortized |
| Timing | Claim immediately or defer to a future year, according to the campaign proposal | Not stated as the proposed timing option; see IRS Publication 583 for current guidance |
| Organizational costs | The proposal does not establish a change to their treatment | Separate deduction of up to $5,000, with a separate phaseout |
This comparison reflects the campaign proposal and the cited IRS publication; it is not a complete account of every tax provision that may apply to a particular business.
What a deduction would—and would not—do
A tax deduction subtracts an eligible amount from income. It may lower the tax due or increase a refund, but it does not reduce tax dollar for dollar like a tax credit. The tax benefit depends on the taxpayer’s circumstances and applicable tax rules. IRS: Credits and deductions for businesses
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Is the $50,000 deduction available now?
Do not treat the $50,000 figure as an available deduction based on Harris’s campaign promise. The campaign document proposed that a Harris-Walz administration seek the change, while IRS Publication 583 describes the $5,000 startup-cost deduction and amortization of remaining costs.
The IRS’s business-deduction guidance notes that the Working Families Tax Cuts Act, Public Law 119-21, was passed on July 4, 2025, and may have affected deductions. The materials cited here do not establish that this law enacted Harris’s specific startup-deduction proposal or provide a complete later legislative history. Check updated IRS guidance or consult a tax professional before relying on a particular rule for a tax year. IRS: Credits and deductions for businesses Public Law 119-21
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Keep records for claimed expenses
Businesses need supporting documents for deductions or losses they claim. Keep organized records of expenses and retain the supporting documents; recordkeeping does not, by itself, make an expense eligible for a deduction. IRS: Credits and deductions for businesses
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