How to Save Over $1,000 on Next April's Tax Bill
The year is almost out, and tax time is just around the corner. Here are some tips for SEOs and web marketers on how to lower your income by increasing your expenses.
- Donate to Charity - want to do some good? Why not donate some cash to a good charity?
- Domain registration - make sure your domains are registered for at least 5 years.
- Buy a better name - does your domain name suck? Now is the perfect time to buy a better one.
- Hosting - have hosting bills coming up soon? Pay them early.
- Directory registration - if any of your good sites are not yet listed in BOTW, Business.com, JoeAnt, or the Yahoo! Directory then submit before the year is out
- Yahoo! Search Marketing - if you are a big user of Yahoo Search Marketing you can pay a few thousand extra in advance
- Affiliates (& other Marketing Costs) - do you have payments that are typically done on the first of the month? Consider paying them early.
- Website design & custom programming - need new features or a fresh look to take your website to the next level? Make that down payment made in the next couple days.
- Software & tools - thinking about trying out a piece of software? Now is a great time to buy.
- Sell loser stocks - did you buy CountryWide at $45 earlier this year? Get the writedown you deserve.
What are your best tax tips?
Published: December 27, 2007 by Aaron Wall in business
Comments
I just looked at countrywides stock and it took a huge hit :-s
Charity donations and directory submission to yahoo are both good tips. AND the jump in traffic is about the same. :)
Bob. I wasn't suggesting to spam. Or was I?
Off to donate... ;)
I am afraid that in case you get audited by IRS these will be not considered as expenses. You can deduct expenses only for the period you pay taxes. If you pre-pay domain name for 5 years in January 2007, you can deduct only 1 year for 2007.
long time reader, but this tax post made me have to registar. I couldn't help myself. Here is some interested info reguarding capalization of computer coding:
GAAP says that purchased computer coding must be amortized on a straight line basis. The issue here is that in computer age, what is the life of computer coding. In other words, Aaron is correct in saying you can expense your costs in 2007 so long as you argue the life of computer coding is less than a year.
Also, an asset is defined as having future economic benefit. With computer programming, you don't know (although you may hope!) that the computer programing will make you money.
Thanks for the informative comments Adam and eastbiz.
You can also argue that the purchase of 5 years of domain life is only valued at one year amor. considering it calculates for higher page rank. Then next renew again for one or two more. Maybe next year you decide 5 years isn't enough. Depends on how you want to look at it.
How about take your wife out to a nice dinner since she helps with work stuff? Thats a business expense. Although I believe only 30% of entertainment can be written off.
50% of entertainment is deductible. But it has to be a legitimate business purpose. (You can bet that an auditor would at least have something to say about deducting a meal with your wife.)
Also, be sure to contribute to your IRA. (Or open one if you haven't yet.)
Nice tips Aaron:)
I do all that you mentioned, plus this year December was an excellent time to:
* Purchase new office computers (great deals from the last-minute Holiday sales)
* Purchase new laptops for travel
* Purchase new cell phones (contracts end in Jan.)
* Hold our annual company meeting at a resort.
and pickup a few other miscellaneous items for the coming new year...
Well, making expenses happen earlier just prevents you making the deductions next year. Those tips like "pay for this earlier" save now but cost later. I suppose if you invest the savings wisely it makes a difference though. The one off purchases and donations are more appropriate for your title though.
Careful with the stock losses. Only $3,000 can be applied each year against regular income.
In terms of best tax tip, if you're a fund investor (i.e. exchange traded funds) you can sell some holdings that have losses to offset others that have had gains while still being able to buy back into the same style of fund and yet avoid the wash sale rule. A quick Google search will explain how.
RE Last minute purchases ... be sure to look into IRS Part 179. many items that normally must be depreciated over years can be exspensed 100% under this rule for small business.
Buy a <$200 personal GPS car tracker ... Travel Eyes or similar brand and track yourself? Yep, track yourself. Every mile for business use is at least a $0.46 deduction as well as some deductions for medical, charity, etc. Un less you really and truly log every mile ... and who does, honestly, you'll miss thousands of business miles per year.
The first year I was an independent consultant I couldn't account for over 4,000 miles ... how many of them were business use? With GPS records and maps of client stops as proof I would have recovered a lot of dollars.
i just got a laptop for my parents and an iPhone for my wife... ;) of course, business expenses!
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