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Tax Deductions
for Web Businesses
Below is a list
of potential tax deductions you may be able to take
for your web business. (Consult
your tax preparer to see which deductions apply to your
specific business.)
The
Most Intriguing Deductions for Small Businesses
1. Travel
costs related to your business - conferences, training,
seminars, etc. If you like to travel, this can be a big
advantage.
2. If your children
are older, you may be able to hire
your children as employees and deduct their salaries
as a business expense. The income to them would most
likely be taxed at a lower rate than yours. To make it even
more financially advantageous, your children can contribute
to a Roth IRA, which allows money to compound tax free and
then be withdrawn (taxed, but without the normal 10% penalty)
to pay for college expenses.
3. Contributions
to your own retirement fund. This may be an especially
important provision for work at home moms since they are
out of the traditional work force -- not accruing Social
Security credits and not enrolled in any traditional employer
designed retirement programs.
There are a variety
of different ways a retirement program can be set up for
small business owners. The tax deductions can be huge. If
you are middle aged and have a successful business, in 2005
you may be able to deduct your entire income, as
much as $170,000 (adjusted for inflation) to be placed into
a solo defined benefit program.
See the IRS pamphlet
Choosing
a Retirement Solution for Your Small Business for more
information.
4. Classes,
seminars, workshops related to your business. If your
seminar is in a place like Disneyworld or Hawaii, all the
better!
5. Home office
- if your office is used exclusively for business.
6. Furniture
for your office - chairs, desk lamps, book cases, rugs,
paintings, etc.
7. Software
programs used in your business - word processing programs,
HTML editors such as Dreamweaver, virus protection programs,
etc.
8. Hardware
you need to run your business, PCs, notebooks, scanners,
and printers.
Other
Deductions That May Be Deductable
1.
Office supplies - stamps, printer ink cartridges, paper,
pens, pencils, etc.
2.
Dial-up, DSL or cable fees for your Internet connection.
3. Web hosting
fees.
4. Domain registration
fees.
5. Advertising
fees.
6. Directory
listings.
7. Books and
magazine subscriptions related to your business.
8. Attorney and
accountant fees.
9. Your business
phone and long distance calls related to your business.
10. Insurance
for your business.
11. Business
lunches.
Topics
In This Section
Work at Home
by Developing an Internet Business
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