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  1. #1
    ABW Ambassador
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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

  2. #2
    I like traffic lights
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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.

  3. #3
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    Hmm. I might have to talk to a tax accountant.

  4. #4
    Moderator MichaelColey's Avatar
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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.
    Michael Coley
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  5. #5
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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.

  6. #6
    Moderator MichaelColey's Avatar
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    I think the limit for Section 179 deductions was recently increased to $100,000.
    Michael Coley
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  7. #7
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    http://www.bankrate.com/brm/itax/Edi..._deduction.asp

    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
    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. )

  8. #8
    Moderator MichaelColey's Avatar
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    You might want to look up the definition of a passive activity. I think you're misunderstanding it.
    Michael Coley
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  9. #9
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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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