Deduct the Cost of your Website on Your TAXES!

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A Business Website is an important asset for any small business, but 50% of all small business don’t even have one.  This first thing they will tell you if you take a class on starting a small business is the need to develop a website to help promote your new business, so where is the DISCONNECT?


 

The price and better yet, the diversity of price seems to be the major factor for small business website development.  How can one developer give me a price for $5,000 and another developer gives me a price for $15,000.00 for the same exact functions and features.  Just like a local Attorney can charge what they determine their services are worth, so can a web developer charge a fair price for their skill level.  The higher the skill level and experience the Attorney offers is directly related to what they charge for their services. It is no different from a skilled and experienced Web Developer charging more because they have the experience, and that experience in the long run saves you MONEY!  Like any Specialized Service you get better with experience it’s the finished product that counts and today that is fully quantifiable.

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One thing a skilled web developer can offer is assistant in how you can best approach your tax strategy when it comes to your web development costs. Since your a Website is considered a Necessary Business Expense, you have 3 tax strategies you can employ. The first we will discuss is Amortization, followed by deducting it as a startup cost and third as an Advertising cost.

 


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Your can depreciate the cost of your Website Development as Equipment, and then depreciate it over 3 years.


If you have an e-commerce, membership or technology service website your site would have more than likely have custom programing to make the site operate. The tax deduction would apply just like buying a custom software program.  The cost can be treated as software or physical equipment such as a copier or a computer and can be depreciated over a period of 3 years.


 We Suggest you check with your Accountant about what technique works best for your technology investment, you can even use a combination of them depending on your business circumstances. 


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Another great way you can deduct the cost of a Business Website is by submitting them as startup costs.   


In 2015 you could deduct up to $25,000.00 worth of startup costs and you can and should include all of your web development expenses if you are not going to be reaching that threshold. If you do have $25,000.00 worth of startup expenses to deduct you can still deduct them by the other 2 methods.


 We Suggest you check with your Accountant about what technique works best for your technology investment, you can even use a combination of them depending on your business circumstances. 

 


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If your site  is serving as an digital brochure you can deduct the full cost of your website as a straight Advertising Expense.


Deducting your website development cost as an Advertising expense is by far the most common, but even today these costs deductions are rarely taken by small business. Since around 50% of all small businesses don’t even have a web site this is not surprising but it is frustrating. If your business still doesn’t have a website what do you have to lose, you can take the deduction and invest in your small business’s future or just save the money. Just remember the next tax year you will be paying in the money you saved in the form of higher taxes, so either way you still pay it’s your choice.


 We Suggest you check with your Accountant about what technique works best for your technology investment, you can even use a combination of them depending on your business circumstances.

 


Websites technology is by far the best innovation for small business in terms of level the playing field.  It is at heart a true democratizing technology that is evolving and radically changing our business models.  So you owe it to yourself and your business to educate yourself on how a web presence can help your business. 

 


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