Income Tax Deductions for Websites, Blogs, E-Commerce Sites
To those of you running a website, Blog or E-Commerce Site (all of which will be referred to as website for the rest of this Blog for the purpose of simplicity) as long as you are showing that you are running your website in an attempt to make a profit, you are legally entitled to write off certain deductions incurred in running your website even if you have no gross income. After a few years though, if you show no gross income from your website repeatedly, the IRS may consider your website a hobby and disallow your losses should they audit your return. I am not a tax accountant so don’t take anything on here as gospel but just follow up on what is written here by yourself or with someone who is doing your tax return. If you are earning Adsense income remember to report this. Adsense income at least establishes that you are trying to make money from your website.
Here is a List of Possible Tax Deductions for Your Website If Run to Produce a Profit
1. Depreciation off the Cost of Your Computer(s)
2. Software Expenses for Your Computer relating to Your Website
3. Repairs for Your Computer
4. Accessory Equipment for Your Computer as it Relates to Your Website like Surge Protectors, etc.
5. Supplies like paper, ink, CDR’s, etc., again as they relate to your website
6. Depreciation of other related Computer Equipment Like Printers
7. Annual domain registration cost and website hosting
8. A Percentage of Your Internet Provider Fees (i.e., if you use the Internet, 50% of the time for your website and you spend $600 a year, you can deduct $300 as an expense).
9. Cost of maintaining an Office like your chair and desk
10. Any books or magazines related to your website for educational purposes.
11. A percentage of your rent or Housing as it related to the area of your residence where you run your website including related storage area. IE, lets say you use a 100 square foot area in a 1000 Square Foot Apartment to run your website and you pay $10,000 a year for rent. You could deduct 100/1000 of $10,000 as office rental (10% of $10,000) which would be a $1,000 rental expense. If you actually rent an office for your website, then that full amount could be deducted.
12. A Percentage of your electricity bill that you’d compute based on the % of the area you work from your residence compared to the rest of the residence. Let’s say its 10% again and your electricity bill is $2,000 a year. You could then deduct $200 as an electricity expense.
13. Any related office decorations such as pictures.
14. Any promotional costs for your website like business cards, press releases, flyers, etc.
15. Postal Mail Boxes or Private Commercial Mail Boxes you rent for your website.
Hopefully this Post has given you a basic gist of what you can deduct as expenses if you run a website with the intent to make a profit and as I said you should either research this further for yourself or hire a professional to do your taxes in which case you should discuss these possible deductions with him. Again, if you do your tax return yourself, none of the possible deductions I’ve mentioned should be taken as Gospel and its your own responsibility to research your deductions for yourself but these deductions should give you an idea on what you may be able to write off from your website if you operate it for the purpose of producing a profit. Please check out our large Online Discount Gift Store click here and our other Online Discount Stores below which helps support this politically incorrect blog. Thank you.
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