Tax Planning – For Website Design Costs

The business use of websites is widespread, but IRS has not yet issued formal guidance on when Internet website costs can be deducted.

Fortunately, established rules that apply to the deductibility of business costs in general, and formal IRS guidance that applies to software costs in particular (the “software guidelines”), provide a taxpayer launching a business website with some guidance as to the proper treatment of the costs. Here is a brief discussion of some relevant principles:

1099-MISC due next Wednesday, 2/29/12

You’ve got until next Wednesday (2/29/12) to file Form 1099-MISC for anyone who you paid $600 or more.

Form 1099-MISC must be filed for each person to whom you, in the course of your trade or business:
(1) made payments of $600 or more for fees, commissions, or other forms of compensation for services rendered as non-employees;
(2) made payments of $600 or more to physicians or other suppliers or providers of health care services in connection with medical assistance programs, or health, accident, and sickness insurance programs;
(3) gave prizes, awards, etc., of $600 or more that were not for services rendered;
(4) made payments of $600 or more for rents;
(5) made payments of $10 or more for royalties (franchisees);
(6) made direct sales of $5,000 or more of consumer products for resale;
(7) and others related to fishermen, brokers and/or backup withholdings (which none of you probably did).

Call me with any questions – 513.703.9763.  God Bless Taxes!

Bob
Robert L. Hesch, CPA
Tax Manager
Flagel, Huber, Flagel & Co, CPAs
9135 Governors Way
Cincinnati, OH  45249-2037
513.583.4044 office | 513.774.7250 fax | 513.703.9763 cell