Clarence - 7:46 pm on Dec 10, 2012 (gmt 0)
@LifeinAsia A lot of things can trigger an audit!
To prove the claim the OP has to show expenses "Domain Receipt, Hosting Receipts, Internet Receipts, etc" and expenses are easy to prove.
If the OP goal is to earn money online "business", then these expenses are able to be deducted.
If you want to be paranoid, you can, but if you want to follow the law, get in contact with an accountant.
Matter of fact the only response I would have given the OP is: "Talk to an Accountant, and Review your local Tax regulations".
The first thing an Accountant would have done is determine the source of the income "Online Business", and started to total all expense directly related to the business, and then total revenue.
Fear of an audit << An audit only verifies your claims against your proof.
If you want to give the Tax man free money out of fear, then that's your personal choice.
FYI: I've been audited about certain expense, sent the proof "receipt and reasoning", and the deduction were found valid! All of this was handled through mail with the US IRS.
So, I say all that, to say this:
Ethan_j: NO BODY ON THIS FORUM IS QUALIFIED TO GIVE TAX ADVISE! PLEASE CONSULT WITH AN CERTIFIED ACCOUNTANT IN YOUR LOCAL JURISDICTION.