I own a few sites and make a little money on them and I dont have a business license. When I claim them on my taxes, can I still write off things like the hosting, domains, and such? Thanks a bunch Jason
Yes, as long as your expense are related to your business. A business license isn't a requirement for tax deductions.
Ok thanks, What if I have spent a lot more than I have made so far? Will that affect me or say i only make 100 can you only have deductions to 100?
There are 2 ways you can file the income. To be considered a business under IRS rules you must show a profit two out of every 5 years (or something close to that). Until you fail to meet that standard business losses may be used to reduce regular income. BUT that opens up a lot of AMT cauculations and it gets really hairy to file. The second choice and the one I would use if this is your first year is to file it as a "hobby". Your expenses reduce all the income to zero but you are not allowed to deduct the remaining expenses. I think you are allowed to deduct prior excess hobby expense from future earnings. I will look this up for you if you like. The second is a way to write off all the income without getting involved in a major ordeal. At any time you consistently make money you can convert your hobby to a business. Edit: I mis-spoke above. You must make money 3 out of the last 5 years in order to qualify as a business. Of course that means you could lose money the first 2 years and write it all off. Not sure if there is a recapture factor or not. Also hobby expenses can only reduce hobby income. There is no carry forward. Here are a copuple of links if you want to read more. http://www.irs.gov/businesses/small/article/0,,id=99239,00.html http://www.irs.gov/publications/p535/ch01.html#d0e883