1. Know the money limits on what you can deduct on your business's taxes. The IRS allows you to deduct up to $5,000 or your actual startup costs (whichever is less), and $5,000 in organizational costs in the first year, whichever amount is less.owever, if your costs exceed $50,000, your deduction will be reduced by the amount you go over. If your start-up expenses exceed $55,000, you won’t be able to claim the $5,000 deduction for the first year. 1  For example, if start-up or organizational costs are $51,000, your deduction is reduced to $4,000.