Hi Wayne,
I’ve had 3 CPAs all give me different answers, and a forth one flatly refuses to believe that any internet business is a “real” business; she’s strictly ‘Brick-n-mortar’.
I sadly found this out ‘after’ she did my taxes, and cost me thousands in deductions.
SO! The question is where are ISP Fees /Web hosting fees/ SEO services/ Banner & Newsletter advertising/ in short; all internet related expenses placed on the P&L sheet of the forms.
Bill Oertel Jr.
Welfab Marketing
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Hi Bill:
Do me a favor and tell the Brick-n-mortar accountant to take a hike. She’s never been to cyberspace and so has her head in the sand.
The answer to your question depends on what type of entity your business is. Here’s a list of the 5 most common entity types and where to report Internet-related expenses for each entity type:
Sole Proprietorship — Schedule C, line 27: “Other expenses”
Partnership — Form 1065, line 20: “Other deductions”
Limited Liability Company — Form 1065, line 20: “Other deductions”
“S” Corporation — Form 1120S, line 19: “Other deductions”
“C” Corporation — Form 1120, line 26: “Other deductions”
Do you see the pattern here? It doesn’t matter what type of entity you own. All business tax forms have a few “standard” expense categories. Then, the last line is simply good ‘ol “miscellaneous” — i.e. anything else that doesn’t fit one of the standard expense categories can still be listed, you just attach a schedule which shows all your other legitimate business expenses. Makes sense, doesn’t it? The IRS can’t be revising the forms every year to add the latest descriptive phrases that might have come on the business scene. Instead, just give businesses a place to list “everything else.”
Sincerely,
Wayne
Wayne M. Davies is author of 3 tax-slashing
eBooks for small business owners and the self-employed. For a
free copy of Wayne’s 25-page report, “How To Instantly Double
Your Deductions” visit http://www.YouSaveOnTaxes.com
