Business startup costs are seen as a capital expense by the IRS, since they are an investment in your business (the money hasn’t actually left the business, it was just transformed into an asset). Deductions for capital expenses typically occur over several years. This is known as amortization, and helps businesses accurately assess profitability year over year. See IRC §195, “Start-up expenditures” and the IRS Instructions for Form 4562 for more on amortizing these costs.