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Website business expenses

business expenses, cost of operation

3:59 pm on Apr 16, 2006 (gmt 0)

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Hi I feel this might be a good topic here for a lot of us.

I'm sure some of us claim the minium and others push the limits on deductions...

but what have you heard or do you use as website deductions... i know hosting, computer parts, and common business expenses but has anyone heard of other ways to get the best deductions?

2:48 pm on May 3, 2006 (gmt 0)

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What's allowed depends on what country you're in.

best, a.

3:40 pm on May 3, 2006 (gmt 0)

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The best way is to consult with a tax professional who knows about your business. He/she can evaluate your particular situation and match it with your local tax laws. (My comments are related to U.S. tax laws.)

If the expense is related to your business, you can generally deduct it. If it is only partially related, you can generally deduct the business part of it (this is a grayer area and many items require 50%+ business usage).

Also, "operating a website" is very general. Some people pay other people to write content or programs (an obvious deduction, but also make sure you're in compliance with proper reporting requirements). Some people with travel related sites expense their trips to other places to write content.

If you travel to meet with a client, you can deduct the mileage (or actual expenses, but then you have to keep track of all your non-business related auto expenses, so it's usually easier to just track mileage). If you take a client to lunch, you can deduct the cost (50%). If you send a client a thank you gift at the end of the year, you can deduct that (up to $25/person).

The fees charged by your business checking account and business credit cards (you DO have separate ones for personal and business, don't you?) are deductable.

If you're making good profit, have your business open and contribute to a retirement account for you. Contributions are deductible even into the next year (before you file the business tax return) and are not taxable to the employee until taken out.

Again, consult with a professional tax adviser who understands your business. Yes, it will probably cost you a few hundred dollars for the consult. But it's a small price to pay for potentially being able to save thousands of dollars in taxes. Year after year.

4:16 pm on May 3, 2006 (gmt 0)

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My Questions are more in the Type of Biz... LLC, C-corp, S-corp...

Every accountant I talk to says LLc without hearing my situation...

Just after reading a few books on the topic... you learn why some people go with different biz types....

The problem I have with going llc is that it would be a single member... which I was told could be taken if I was sued personaly up to the amount I'm a member....

I really want to find out how to
a) protect my website from me
b) protect me from my website
c) lower tax responseabilty Legally...

and each biz type has perks and disadvantages... Just must find the right accountant with that open mind, like us websters.

5:42 pm on May 3, 2006 (gmt 0)

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An s-corp protects your personal assets from your business provided that you don't sign any personal guarantees. The profits from the s-corp are not taxed at the company level, they roll down to your personal tax return.