WEB Tax Question: Are Websites Deductible?

Discussion in 'OT Technology' started by Azazel28, Jan 17, 2009.

  1. Azazel28

    Azazel28 New Member

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    I have many clients ask me this question and after doing some research I get a lot of mixed information and in many cases completely wrong information. My clients just want to know if they can put their website as a tax write off (expense like advertising)? If it is possible to do so, does anyone have any links they could forward over to me regarding this issue? I would appreciate it.
     
  2. maxxpower

    maxxpower OG Lauren Crew - Observer OT Supporter

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    i can only help you with canadian tax law sorry bro.

    Fyi for fellow canadians...
    Registered businesses, sole proprieterships etc can use any business expense as a write off towards taxes paid on income.
    Expenses for hosting fees, advertising, design, land lines etc can all be used.
    If you are technology company, you are even eligibable for R&D expenses and credits.
    http://www.cra-arc.gc.ca/sred/
     
  3. Pepsi1975

    Pepsi1975 Mod of the Year

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    yes they can be

    i am not sure on links, but i have taken hosting and registration fees off in the past
     
  4. kingtoad

    kingtoad OT Supporter

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    I have with hosting fees. :dunno:
     
  5. m3s3lf

    m3s3lf *Jeep Crew*

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    Hells yeah. They're as deductible as a billboard would be.
     
  6. Azazel28

    Azazel28 New Member

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    Can anyone supply some links??? Or give me some assistance?
     
  7. Pepsi1975

    Pepsi1975 Mod of the Year

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    advertising expense

    if you are having that much trouble, hire someone to do your taxes
     
  8. Azazel28

    Azazel28 New Member

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    No need to hire someone considering I am not the one putting as a deduction. We are the people that build the websites.
     
  9. Diesel66

    Diesel66 My standards for women is like rent-a-centers stan OT Supporter

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    yeah, most anything used soley for a business can be deducted.
     
  10. uneek

    uneek OT Supporter

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    yes. if you were paid a significant amount of money having the site designed and /or software, this would probably need to be capitalized and then amortized over time, but pretty much everything else would be expensed.

    for example, if you were paid $5,000 to have the site designed, that would need to be capitalized. for $250, I wouldn't bother.

    Technically the domain name fees are capitalized but unless they spent a lot of money on the domain name, nobody is going to quibble if you write off the $15 registration fee up front.

    what I would do is be very generic in dispensing tax advice. just say that yes, your services can often be deducted, but the customer needs to speak with a professional for specifics. if you have someone on your team, you could do the tax stuff in house for a fee. it's really very simple... you could send them a tax depreciation / expense schedule for $20 or something. once you figure out how to standardize things, it's really easy. you'd just have to be careful in the way you word things - unless you actually do the tax return, all you are providing them is a table that can be used to assist them in preparing taxes and it is not authoritative.
     
  11. Pepsi1975

    Pepsi1975 Mod of the Year

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    then instead I would tell them to talk to their accounts or tax specialists and discuss it with them, that it is tax debuctible, but it is not your place to dispense tax advice
     
  12. Yahdude

    Yahdude New Member

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    Will you do my taxes please? lol

    On a serious note, you seem to know your stuff...

    I've made a pretty decent sum of money this year via affiliate stuff...since they're all 1099'ed I'm going to end up oweing quite a bit of money on all that PURE income, that's really not all income. I've got at least 15-20% of what I brought in as expenses, can I write that off in any way? I don't have anything incorporated, yet...its all personal on my social.
     
  13. Pepsi1975

    Pepsi1975 Mod of the Year

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    i am not incorporated yet and i have done deductions and what not on my ss number
     
  14. uneek

    uneek OT Supporter

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    Anything related to business income, you can generally take as an expense. Can you clarify what you mean- what are these expenses that you have?

    I don't currently work in tax (I do audits) but people know I'm an accountant & I like helping my friends out so I seem to do a lot of tax work around this time of year anyway :)
     
  15. biawokauns

    biawokauns New Member

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    do some basic research, if you are a legitimate businesses, you should only be paying federal taxes on net income (total revenue - expenses = net income).

    expensing food, entertainment, and rent are all red flags.
     
  16. JesterFX

    JesterFX New Member

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    I had tons of write offs lol. I think it was somewhere around 25k and that was before doing anything borderline like "home office" rent and such.

    Basically if you had to spend money to make money you should be able to, and should, write it off.
     
  17. uneek

    uneek OT Supporter

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    food cannot normally be expensed as an employee, but the business can expense it so long as certain conditions are met. as long as you keep good records, food & rent can be taken. you could even take deductions for the furniture in your home office.
     
  18. biawokauns

    biawokauns New Member

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    i am aware of that, it was meant for business owners. food falls under entertainment, you need to log the activity that was taking place while you were entertaining. home office gets tricky, and these deductions are also red flags.
     
  19. Pepsi1975

    Pepsi1975 Mod of the Year

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    :werd:

    i don't take space off

    but i do take a portion of the internet, cell phone and computer parts and what not off
     
  20. uneek

    uneek OT Supporter

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    as long as the meal is for the convenience of the employer, it's 100% deductible and not subject to the 50% limit. re: home office, there is no reason to be intimidated by the IRS. The worst they can do is deny the deduction. There have been a number of cases related to home office/real estate that the IRS has taken to court and lost, rather embarassingly
     
  21. JesterFX

    JesterFX New Member

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    don't forget a percentage of your OT sub since part of your time is spent in here, for business reasons :mamoru:
     
  22. Pepsi1975

    Pepsi1975 Mod of the Year

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    mod son, free sub ftw
     
  23. biawokauns

    biawokauns New Member

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    i'm going to guess, most of OT is a SP, LLC, or partnership. in those cases, they're likely not retaining the necessary paperwork to qualify for any of those deductions. there is no reason to be intimidate by the IRS, but do you really want to get audited? are you really going to go to court?
     
  24. Pepsi1975

    Pepsi1975 Mod of the Year

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    i keep all my paper work, just in case
     
  25. uneek

    uneek OT Supporter

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    IRS won't go to court up front, they will propose an adjustment and if you disagree, then it goes to court. I'm not suggesting that people take deductions for which they don't have records to substantiate the deduction. But my bank statements tell me where my debit card is used- if the IRS were to challenge me for taking $50 worth of lunches each week, I could print out a bank statement and highlight all of the lunches I bought. if you pay cash, then you can note the amount of cash you withdraw each week to cover your weekly lunches. probably not the best way, but it's worth something I think. If you're self employed, you're looking at SE taxes on top of everything else. That could be 40+% when all is said and done.
     

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