Claiming every penny you spend as a business expense

Anything you buy is potentially "content research"

[MichaelBluejay]

I spent years creating personal content-oriented websites and never considered trying to make money from them, but then along came Adsense and now I'm reaping a late reward for all that time I spent researching and writing. I'd originally set out to make my living by doing web development for others, but these days I'm doing less and less of that and more and more of what I prefer, researching and writing for my own sites. It's profitable enough and provides more satisfaction.

As I've gone in that direction, it occurs to me that potentially anything I spend money on could be considered a business expense if I review the product or service on any website where I make income from advertising. This could apply to any book, movie, restaurant, or household appliance -- or even trips where I could write about the destination. As long as I'm actually generating legitimate content from which I earn legitimate income, it seems fair game.

I suppose many of you have already been doing this for a long time. I'm starting this thread to see if people want to share how far they go (or don't go) with this concept, and to see if anyone knows any caveats or record-keeping concerns that those of us who do this should be aware of.

[kaled]

Check with an accountant. My guess is that you would be expected to sell everything afterwards (except movie tickets, etc.)

Kaled.

[Matt Probert]

Don't ask an accountant, ask the tax office!

Seriously. Here in the UK the tax office are very good at advising what can and can not be claimed as a tax deductable expense, and they don't charge for the advice!

You need to keep receipts, and be aware. Kets say you attend a film "for research purposes". If you attend alone, during "normal busibess hours" you may be able to justify it. However, if you take the children on a saturday evening, the tax office are going to argue that it was personal and not business. The whole area is grey, but you should be able to fathom the basic principle the tax office are coming from.

Matt

[jessejump]

>>>> if I review the product or service on any website where I make income from advertising. This could apply to any book, movie, restaurant, or household appliance -- or even trips where I could write about the destination. As long as I'm actually generating legitimate content from which I earn legitimate income, it seems fair game.

I'd check about that with a tax attorney. That sounds very shady to me.

[wheel]

If you're paying money to get something to be used in a business, then I'd expect that'd be a deductible expense in most places. And attending a movie to later review it for business purposes seems like fair game to me (I'm assuming that you'd only write off your ticket and popcorn, not the kids).

My business accountant (in Canada) has suggested that I make most trips have a business component. So when I went bass fishing last year in North Carolina, I also interviewed someone there for a job (I was actually interviewing them for a job). Then I wrote off part of my trip and expenses - but none of my family's.

The fishing went so well last year that I'm planning on having a business meeting with an SEO'er I know from down around that area. Said business meeting to be surrounded before and after with a couple of days of fishing of course!

That being said, the tax office always has the final say. I'm trusting my accountant to be able to properly assume what's reasonable and what's not in the eyes of the tax office. And I don't push the line and try to deduct stuff I can't make a sound argument (like my family's expenses on such a trip).

[MichaelBluejay]

For the record, I wouldn't try to deduct the popcorn -- unless I were writing an in-depth review of the popcorn, too. Which I wouldn't.

On the other hand, much of my income comes from a website about Las Vegas. Imagine the opportunities there.

[Leosghost]

On the other hand, much of my income comes from a website about Las Vegas. Imagine the opportunities there.

I can here the IRS laughing ..from one continent and an ocean way .."you are chancing your arm" ..bonne chance ..comme même .. ;)

[jdancing]

If your buying something to review it for your business it is a legit expense. I've often thought of doing a gadget review site just to write of the toys. BTW: Do a quick review on the theater and write off the popcorn ;-)

[MichaelBluejay]

I can here the IRS laughing

I don't think so. I'm making significant income from my Vegas site, and I can't create the content unless I go to Vegas periodically and research. Sure I enjoy it, but even if I didn't I would definitely still have to go there and spend some money in order to write about the things I write about competently.

My site isn't a throw-away site, thrown up as an afterthought as a way to claim more deductions. Everything on it is quality. Even deducting most of the money I spend on my Vegas trips, my ratio of expenses to revenue is still quite low.

I just spent an hour with Google but couldn't come up with anything specific. I do remember reading somewhere about a court ruling in which the judge sided with the taxpayer and said something like, "There is nothing in the tax code that says a taxpayer may not enjoy his work."

[rogerd]

The general test is whether you can make a profit on the business. If you keep horses for breeding but lose money every year, the IRS will eventually call that a hobby and disallow your losses as a deduction.

I would think reasonable research costs for a profitable business would be deductible without question, but DO check with an accountant or the proper authorities.