Tax Write Off's and Deductions

Can services used off BHW be used as deductions for any income made off my sites?

I would say yes. write off as much as you can. hosting costs, domain costs (even renewal fees)

You need to discuss this with your accountant, but yes, any business expense can normally be set off against tax. You need to keep receipts though obviously so you can show to your accountant.

If its legal then you can easily write it off for your business. Just make sure to keep receipts, most payment gateways provided detailed receipts for you.

If they are wholly and necessarily used for your business then yes.

Most definitely yes. Phone time regarding your activity, paper magazines you use to stay up-to-date in your job are also viable but often overlooked potential writeoffs. Better discuss it with a professional accountant though: the BEST money you'll ever spend.

sirgold said:

Most definitely yes. Phone time regarding your activity, paper magazines you use to stay up-to-date in your job are also viable but often overlooked potential writeoffs. Better discuss it with a professional accountant though: the BEST money you'll ever spend.

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I have to agree with getting a good cpa, they end up paying for themselves with the extra tax write offs they find for you.

snapattack said:

If its legal then you can easily write it off for your business.

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I don't believe legality has anything to do with the writeoff being allowed or not, at least not in North America. For example, if your income is from spam, and you pay someone else to send the spam, you should be able to write off yours costs as long as you have a receipt. In that case, the payment for the spam is 100% necessary in order for you to earn your income so it should be deductible. There really isn't a whole lot of cases to go off, because most criminals don't declare all of their illegally gained income or try to deduct against it.

volund said:

I have to agree with getting a good cpa, they end up paying for themselves with the extra tax write offs they find for you.

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They do pay for themselves.

Also think about other "business" expenses; computer, printer, ink, digital camera, phone bill, internet....

All are legitimate costs

If you guys do use a CPA, remind them of their ethics training when you drop off your papers. It doesn't take a CPA to find lots of special deductions, just most people encourage their accountants to do creative bookkeeping to save them money. There are certain limits you can stay under to avoid setting off most manual reviews/requests for supporting documents when claiming deductions, and most CPAs know this. They also know which types of deductions the IRS will be auditing extra hard for that tax year (lower limits then usual.)

Remember, the IRS is very similar to Google. You can blackhat your own taxes, but if you get caught for a manual review, its not going to end well most times. If you want to be honest and legitimate, tell your CPA straight up. Some of them do creative bookkeeping on their own to try to keep you as a long term client. If your tax return is much different than previous years, ask the CPA to explain to you WHY it was that way. Then do research on your own to make sure it looks legit to you.

If something goes wrong, the CPA knows what to tell the IRS to remove all blame from himself and place it on you. Many CPAs have it set up where it basically says they take no responsibility for the accuracy of the return as they just used information given by you and took you at your word. I forget exactly how its worded, but it basically says the CPA was not required to see supporting documents regarding your claims and therefore all responsibility for the accuracy falls on you.

Just be careful guys. There are whitehat and blackhat CPAs. Make it clear you have a lot of expenses you hope are legal deductions, but you only want to claim them if they are 100% legit.

If your accountant doesn't demand to see every receipt or ask what exactly you used something for in detail, and doesn't ask to see your previous years return if you are a new client, start getting suspicious. Hopefully some others can chime in with what I missed.