A "capstone" project is like a final exam.

First, you don't even have an employee unless there is a corporation and there is payroll.

Second, understanding what is the business entity and the business operations is required before anything you asked can be answered.

"Your thoughts?"

You cannot shift personal life costs to business. Only the business activities are business. Your "friend" is trying a scam concept. This tells us the truth: "how to form a business to write off all"

A business is not formed to write off but to make something. Having a life is not a tax deduction.

All of this is Basic IRS guidance. You need to do some reading.