Wife wants to start a blog. She is planning to buy a computer and will incur monthly hosting expense, hoping to make some affiliate revenue. What's the best way to get tax deduction for expenses? Thinking of home office deduction. Is there a way to get deduction on computer equipment and hosting cost? When making purchases, should it be via business account or credit card or personal card is fine? Any advice is appreciated. In Seattle, if that simplifies/complicates things.
OP can't you claim those as your expenses?
And it’s just a blog, wouldn’t be more than $20 a month. Can’t you afford it? If you go with GoDaddy it will be much cheaper like $50/yr.
It's not about affordability. It's about treating it like a business from get go. If it's successful, there will be income. When income has to be reported, why not take deduction on expenses?
I’m referring to the hosting cost.
I’m referring to the hosting cost.
Bro, there’s edit in the bottom right corner...
The most important thing is to show income if you’re taking expenses. Expenses without some meaningful income is an audit red flag.
Yup, the income is via affiliate revenue, say sending traffic to Amazon. It's going to take an year or two to see meaningful number there, if things work out.
Maybe worry about this once she's started making an income and it can be reasonably seen as a business. Right now it's just a hobby.
Yup, makes sense.
Open LLC or similar if you want your deduction so bad. But as already mentioned, consider if it’s worth it. Home office deduction and non-profitable (over years) small business are favorite IRS red flags.
Looks like the cost of LLC outweighs the benefits now. Is she is super successful with it, that's the right thing.
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This seems like an attempt to fund a hobby via a business expense. It won’t pass IRS scrutiny. If she wants to blog, then blog. When people get cutesy with deductions is when the tax man cometh.
Hopefully she makes some income out of it. Let's say she buys a laptop to make videos and edit pictures, is that not a valid expense? Or when does a hobby become a real business? Just suck it up until there is enough income?
Read this. https://www.bankrate.com/finance/taxes/tax-breaks-turn-hobby-into-business.aspx Don’t get yourself into tax trouble to save a few pennies. IRS doesn’t play around. Also, home office deduction is an area designated for exclusive use.