July 26th, 2005, 05:47 PM
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ABW Ambassador
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Join Date: January 18th, 2005
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USA Taxes question
I plan on a "how to" page for one of my sites, complete with pictures and step-by-step instructions, for products I promote on the site. This will involve some expense, including the product itself and extra materials available locally.
Is the expense of the product and extra material allowed as a deduction?
Of all the silly ways to convince my wife to let me play in the garage...
Last edited by weisinator : July 26th, 2005 at 05:48 PM.
Reason: typos
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July 26th, 2005, 11:09 PM
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Tree Hugging Liberal Hippy Realist
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Join Date: January 18th, 2005
Posts: 2,914
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It would probably be classed as a fixed asset and thus you would have to depreciate it over it's lifespan. I don't think you could claim the full value of the product immediately as a deduction. Or maybe classed as stock if you propose to on-sell it later.
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July 27th, 2005, 09:37 AM
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Join Date: January 18th, 2005
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Hmm. I might have to talk to a tax accountant.
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July 27th, 2005, 10:16 AM
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Join Date: January 18th, 2005
Location: Mansfield, TX
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In general, any legitimate business expenses are deductible. Those would seem to be legitimate to me.
As for depreciation, if you're a sole proprietor, look into Section 179 deductions. You can write off a significant amount of assets in the year you buy them through this.
Of course, it's always best to get your tax advice from a tax accountant rather than a message board. The IRS won't come after us if we give you bad advice.
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July 27th, 2005, 11:07 AM
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Significant? I'm guessing $80-$100 for the project. I'm not sure how significant it is.
Just gotta show the newbies how easy it is to do, click here to buy this.
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July 27th, 2005, 11:34 AM
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Join Date: January 18th, 2005
Location: Mansfield, TX
Posts: 10,967
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I think the limit for Section 179 deductions was recently increased to $100,000.
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July 27th, 2005, 12:23 PM
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http://www.bankrate.com/brm/itax/Ed...9_deduction.asp
Quote:
The IRS says ineligible property includes:
* Buildings and their structural components
* Income-producing property (investment or rental property)
* Property held by an estate or trust
* Property acquired by gift or inheritance
* Property used in a passive activity
* Property purchased from related parties
* Property used outside of the United States
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I guess I could sell the end product, make a small profit on it.
(Computer hardware and software is eligible for Section 179 according to that link.  )
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July 27th, 2005, 12:32 PM
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Join Date: January 18th, 2005
Location: Mansfield, TX
Posts: 10,967
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You might want to look up the definition of a passive activity. I think you're misunderstanding it.
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July 27th, 2005, 01:03 PM
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Hmm, you're right on the money there. IRS tax rules come up for a google search of passive activity and this certainly does not fit the definition.
Like most things tax-related, I probably won't understand it without reading the IRS publication. Even then, it's sketchy.
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