I'm an independent contractor who recently purchased two sites on Sitepoint.com Does anyone know the tax implications? Thank you.
If you are buying the webistes and running them as a business and not a hobby then yes they are tax deductible as is your hosting, content costs, etc. Running an online business is no different than a brick and mortar one. Expenses that are considered "cost for doing business" will be deductible. Gregg
The two sites could be assets which you can depreciate. Then all the subsequent hosting and such will be expensed.
No, purchase of a site is not tax deductible. It is an asset and should be depreciated, though depreciation of the website is a very tricky thing, since depreciation is based on the life time of an asset.. how would you determine life time of a website.. there are so many factors involved here.. also it can be written off.. as eBay has done with Skype for example.. you can write off your assets only in a very extraordinary cases
I found this article at Problogger.net: http://www.problogger.net/archives/2007/09/28/46-tax-deductions-that-bloggers-often-overlook/ Tax Deductions that Bloggers Often Overlook This guest post on Tax Deductions for Bloggers is by Kelly Phillips Erb from Tax Girl. Want to learn more about how to make money blogging? The most popular question in response to my guest post on Problogger last time was invariably some form of “Can I deduct…?†It makes sense. Figuring out what constitutes income in the blogging world is pretty easy. But what constitutes a proper deduction is another story - and bloggers usually err on the side of not deducting enough (and not the other way around). Don’t get caught leaving money on the table. Here’s a list of potential deductions that you might have overlooked. Consider: Monthly Hosting Fees Annual Domain Costs Design/Logo Fees Internet access fees - this clearly includes DSL and dial-up, but don’t forget charges that you might pay away from your home or office such as wi-fi charges in Internet cafes Paid blogging platform charges (such as Typepad monthly charges or “add ons†through WordPress) Cell phone usage Long distance usage related to your blog - remember that the IRS will not allow you to deduct the cost of your primary land line but you may deduct long distance charges Second phone line for business or fax Design or word processing software - this includes Photoshop, Illustrator, Word and similar programs for business use Computers Keyboards, mice and other periphery Web cameras Digital cameras - and memory cards Film processing for traditional cameras Costs paid to use or reproduce images Downloaded music or other audio Blackberry, Treo, iPhone charges Business cards Headshots for web site or promotional materials Letterhead - remember that printed materials not be professionally printed to be deductible! Promotional stickers and items - Frisbees, magnets, etc. Web advertising - text and banner ads SEO services Paid site submissions Prizes for giveaways and contests Postage - it’s impossible to keep track of every single stamp that you use in your business, so buy a sheet or two and keep them in a folder just for business use Post box fees - I recommend this if you’re working from home, it looks professional, it’s inexpensive and it keeps sales people from showing up on your doorstep late at night (trust me, MCI has seen me in my pajamas) Transportation - this includes mileage for car transportation, train and bus fare for public transit, cab fare, airline tickets Dining while away on business Hotel charges for overnight conventions and business travel Entertainment for clients Professional advice (from lawyers, accountants and tax preparers) Tax software Accounting software Copy paper, memo pads, photo paper Office supplies - pens, folders and post-its can add up! Books, magazines and subscriptions Professional affiliation and membership dues Professional informational sites (like imdbPro) Paid research sites (like LEXIS/NEXIS) Trademark fees and related costs Conference fees - such as for BlogHer and BlogExpo Promotional sponsorships - golf holes at tournaments, that sort of thing Charitable donations - limited to the cost of the production, not the FMV of the final product (in other words, if you blog about quilts and you donate a quilt, your deduction is limited to the cost of the quilt materials, not the FMV of the quilt) Backup tapes Zip drives It is by no means an exhaustive list - you make think of more (feel free to add them below). The key is to make sure that the expenses are related to your business. They should also be both “ordinary†and “necessary†(a wide screen TV might feel necessary for your sports blog, but likely isn’t according to the IRS) for your business - if you’re not sure, ask other similar bloggers what they do. You can get some good advice and make great contacts at the same time! Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation. If you have a question, ask the taxgirl.
Hello, Yes you can (I'm not an account) but I hope you can be 100% sure if you contact an account Jakomo
One thing. Be sure to keep good records of all your expenditures and income. This means keeping all receipts for goods and services and recording all forms of payments to you.
this is all mostly true. it is an asset, and normally you would have to depreciate it. With most assets however, you can claim a section 179 deduction, where you get the benefits of expensing it. I think websites count as intangible property however, which cannot claim this deduction http://www.taxguru.org/incometax/Rates/Sec179.htm