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Taxes: what category of expenses Web hosting is in?

Discussion in 'General Business' started by 1-script.com, Jan 14, 2007.

  1. #1
    What category do you (U.S. based) guys use to add your Web hosting expenses to the Schedule C?
    I used to put it into Supply Expenses but this year it's been especially large chunk, stands out very much from my Post-it notes purchases if you know what I mean ;)

    Is it Equipement Rent? Other Rent? Utility? or still a Supply?

    What would you recommend?

    Thanks!
    D~
     
    1-script.com, Jan 14, 2007 IP
  2. drhfinegifts

    drhfinegifts Peon

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    #2
    An expense is an expense is an expense.

    You can call it "website expenses" or "internet expenses" or whatever you want.

    To the IRS, it doesn't matter. I prefer to tell clients not to use "misc. expenses" if at all possible.
     
    drhfinegifts, Jan 14, 2007 IP
  3. Colbyt

    Colbyt Notable Member

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    #3
    If the site promotes a "brick and mortar" business then it is advertising.

    If it is an "online only business" then rent is closest pre-defined term but I might still call it advetising expense or list it as website expense.
     
    Colbyt, Jan 14, 2007 IP
  4. 1-script.com

    1-script.com Well-Known Member

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    #4
    Thanks for your input, guys.

    I decided to move it into misc. category. Hope Mr. TaxMan will be happy. I agree with you that expense is an expense but they should have created those categories for a reason. ;)
     
    1-script.com, Jan 14, 2007 IP
  5. drhfinegifts

    drhfinegifts Peon

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    #5
    That is why there are write in spaces on the form.

    Please remember that I mentioned to AVOID using a misc. expense category. I have been in the accounting field for over 20 years and every CPA firm I ever worked at always tried to avoid the "misc. expense" category if at all possible.
     
    drhfinegifts, Jan 14, 2007 IP
  6. soccerfriend

    soccerfriend Well-Known Member

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    #6
    You must create a separate expense account called "Hosting" on type of expense account - Operating for Income Statement purposes.. PM me if you have more questions would be happy to help
     
    soccerfriend, Jan 15, 2007 IP
  7. 1-script.com

    1-script.com Well-Known Member

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    #7
    Thanks, soccerfriend.

    I was thinking in TurboTax terms just for the tax preparation for 2006. However, going forward in 2007 I'm going to set a separate account in Quicken to track the expenses separately 'cause they've become a particularly considerable chunk of money.

    Thanks again.
    D~
     
    1-script.com, Jan 16, 2007 IP
  8. slava

    slava Peon

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    #8
    I call it rent, because the state revenue service in Indiana does not charge sales tax on rent, and I save 6% in taxes.
     
    slava, Jan 16, 2007 IP
  9. soccerfriend

    soccerfriend Well-Known Member

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    #9
    you are lucky you did not get audited :D
     
    soccerfriend, Jan 16, 2007 IP