Organization and start-up expenses are the costs of going into business. Organization costs include attorney's and accountant's fees, incorporation costs, etc. Start-up costs include what you pay for investigating a prospective business and getting the business started. These include surveying potential markets, advertising for the opening of the business, salaries and wages for employees who are being trained, and travel and other necessary costs for obtaining prospective customers.
Most costs of starting a new business must be capitalized if paid or incurred before the date on which you begin business. In order to deduct these types of costs, an election must be made on your tax return to amortize the costs over a period not to exceed 60 months.