Once i get my biz registered as an LLC i will probably go to my local HSBC bank and get a biz account.

Then i think the next step is to get a merchant acct and buy stuff for my biz website such as demo demo tutorials,cerberus help desk( the one that costs $35/mont/12months) possibley Vbulletin etc --


Question:

I have set aside approx ~ $1000 for initial expenses and an other 1 yr worth of monthly expenses ~ 150 for maintaining monthly reseller account and for other expenses around it.

The cerberus etc i was planning to use my BUSINESS credit card to buy also monthly reseller acct and other such things.

Can i show these as my EXPENSES for my business ?

Thanks

If it's something you need to provide your business, then yes it's a business expense. Go talk to your accountant.

Absolutely. Of everything you mentioned, expense it. Anything you need to purchase to run your business is a business expense. Some are tax deductible, some are not and it depends on your specific country/province/state.

You can even count your gas milage, your computer hardware, your internet connection, etc as business expenses if you use them for your business.

But I reccomend you talk to a CPA

As axe9 said, anything that is used for business can be justified as business expenses. If you drive your car to the store to buy an ink cartridge so you can print an invoice, you can write off the ink cartridge and the gas to drive to the store as a business expense. I suggest you contact your CPA and make sure.

~ nick

A question to ask you: why do you think it isn't a business expense?

Yeah, when you do taxes you can say how many miles you drove on your car were personal and how many were business. Just a hint - as a business you want to write off as much as possible in expenses so there's less to be taxed on ;)

(minimizing taxes, not tax fraud)

Can you give me a rough idea what a CPA will cost?

Also do i need to look for a specific CPA that are oriented towards the webhosting biz ?(supid question i think -- just wanted to make sure anyway :-))

Can you give me a rough idea what a CPA will cost?
Pick up your local phone book.
Also do i need to look for a specific CPA that are oriented towards the webhosting biz ?(supid question i think -- just wanted to make sure anyway :-))
You wouldn't find a CPA that just does hosting businesses. Most CPAs will do.

Absolutely. Of everything you mentioned, expense it. Anything you need to purchase to run your business is a business expense. Some are tax deductible, some are not and it depends on your specific country/province/state.


Not everything can be expensed for tax purposes - somethings that you might think can be expensed cannot be. Canadian and American federal taxation requires Capital assets (which includes software and website development cost) to be capitalized and then amortized.

Start up costs for your business (such as cost of forming your LLC etc) are definately not expensed immediately for federal income taxation purposes.

Depending on your knowledge of accounting and taxation, you might want to start your research on income tax laws by visiting the IRS (http://www.irs.gov/) (since you are in the US) website before you start expensing purchases that should not be. Do note that state/county/city tax may differ from the Federal taxation legislation depending on where and how you operate your business.

If you find the information overwhelming or complex and require the assistance of an accountant, you might want to consider speaking with a CPA. Most CPAs charge by the hour - as such fees are almost certain to be dependent on the size and complexity of your question/business. Most CPAs would provide you with a quote on how much the fees would be prior to rendering their services.

I would recommend getting in touch with a local CPA. To start your search, try visiting the NYS Society of CPAs (http://www.nysscpa.org/) or the American Institute of Certified Public Accountants (http://www.aicpa.org/)

You should try and keep a log of the miles you drive relating to your business. Perhaps fill up before you leave, then fill up afterwards. The second fill up is all of your business related expenses.

One other thing you might be able to deduct... if you rent/own your place, you can deduct part of your rent/mortgage. It is only part of it though. You need to get the square footage of your "office area" as well as the total square footage. If you sleep and use the computer in the same room, you can only use the area where stuff is pertaining to work... so like 1/2 of the bedroom's area.

Think it is something like: (sq ft of office / overall sq ft) * monthly rent or mortgage = amount you can deduct

Also important to track any purchases like a fax machine and what not.

I wouldn't go buck wild on purchases... you don't get fully reimbersed. If you spend $100 on expenses, you won't get $100 bad for it. You subtract $100 from your total income so you have less taxable income (ie, taxed on $49,900 instead of $50,000).

Not everything can be expensed for tax purposes - somethings that you might think can be expensed cannot be. Canadian and American federal taxation requires Capital assets (which includes software and website development cost) to be capitalized and then amortized.

You'll note that I said "of everything mentioned", not "everything". I also went on to state that laws vary from state to state, country to country.