Time To Think About Taxes

Any webmaster tax tips before the end of the year?

[TheGuyAboveYou]

Greetings

I assume most of us are in the same boat? Income
and hardly any expenses from running an online business. Any ideas, besides setting up overseas,
for not paying out so much income tax this year?
Its not looking to good when I look at the books :(.

I was talking to a tax laywer and he was talking about contingent speculative investments. Buy options on the Dollar verse Euro etc. I am trying to find some simpler ideas.

Re-investing is ideal if you can somehow defer the income. For webmasters it is difficult to expense income.

[edited by: TheGuyAboveYou at 9:47 pm (utc) on Dec. 6, 2004]

[buckworks]

Planning major tax strategies will probably do you more good for next year than this year, but with a bit of thought there are likely to be some last-minute expenses you could claim. A few ideas come to mind that might be useful for small or medium folks, although these would be peanuts if you're raking in zillions:

Register domain names far into the future
Prepay advertising accounts, PPC or other
Prepay hosting
Office supplies
Office furniture - that ergonomic chair you've been wanting?
Software
Books, relevant magazines
Computer stuff - major hardware
Computer stuff - useful doodads
A dial-up account to use when travelling

Etc etc.

[TheGuyAboveYou]

Thanks

Maybe I can prepay some advertising? I will have
to look into that.

[vkaryl]

Buy some new equipment before 12/31 and take the whole deduction next year instead of prorating over 5 years or whatever. [Check with your tax accountant - mine okayed this, but it may depend on your personal situation....]

I never really have a problem, since my travel expenses are always so high - living in the back of beyond definitely has some hidden benefits. A trip to one of my "local" clients is either 80 miles or 140 miles round trip....

And I'm set up now so that a home office deduction raises NO eyebrows at all. Plus there's retirement accounts, savings accounts for my granddaughters' college funds, various charities, etc. I usually come out fine, even considering that my husband's retirement income is all no-tax-deducted.

You really SHOULD follow your financial planner/tax accountant advice though.

[dataguy]

I've seen this mentioned but not really explained: is there a real tax benefit to being an LLC instead of a sole proprietorship? With sales at a level of a pretty nice income for one person, is there a real tax advantage? (I'm not looking for legal advice, I would just like to hear if it's worked for others in the same situation.)

[vkaryl]

In the US, an LLC gives you some protection from a lawsuit taking everything you PERSONALLY own, as well as business assets. I don't know if there's any other real benefit.... but that one thing is why I do it.