No. You don’t need to form a corporation or LLC in order to deduct business expenses. The only real purpose of a corporation or LLC is the liability shield that they can give you, provided they are set up correctly and you don’t use them as a personal piggy-bank.
Do you need a LLC to deduct business expenses?
You can operate as a sole-proprietor and will not need any other business entity to show that you are eligible to deduct business expenses.
What is a deductible business expense?
The only thing necessary to deduct is a business expenses is that they are actually a business expense. There are certain IRS rules that must be followed to determine this. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
The expenses used to figure the cost of goods sold,
Capital Expenses, and
More on Deducting Business Expenses
Most of the costs that you describe should be deductible as Section 174 Research & Development costs, which otherwise aren’t required to be capitalized as start-up costs during the period that the business is being established but before you’re ready to sell a product.