List of Tax Deductions for Online Biz Owners

by kamckinley on February 29, 2008

Q:  What are the main deductions common to home based/online/ebay businesses?

A:  You are allowed to deduct expenses against your business income as long as they are ordinary and necessary for your business.  This basically means that if it’s a common expense for your type of business and it’s necessary in order for you to run the business, it’s probably deductible.

If in doubt, write it down, and let your accountant decide if it’s deductible.

Here is a list of the most common deductions that online business owners typically will have:

* Inventory
* eBay fees
* Web hosting
* Domain names
* PayPal fees or shopping cart fees
* Shipping fees and supplies
* Postage
* Office supplies – pen, paper, toner, folders, etc.
* Advertising – Google Adwords, ezine ads, website
* Mileage – use your car for business purposes
* Phone – cell phone or second line
* Bank charges – business checking account
* Accounting and legal fees
* Computer and software
* Internet, website and faxing services
* Contract labor – VA, coaches, web designer
* Furniture and office equipment
* Membership fees – Mom Masterminds, Client Abundancing Coaching Cafe, Jimmy Brown’s List and Traffic, etc.
* Continuing education – ebay classes, accounting classes, marketing classes
* Home office expenses – will discuss in detail later

This list is not all inclusive, there are a lot more expenses you could incur, but these are the most common deductions that online and home based business owners will have.

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{ 3 comments }

james vasquez January 21, 2009 at 11:20 pm

yes im a lineman who works on a 1099 and i was wondering what all i can deduct on my 1099 also this year i have w-2s coming too.

Heather January 15, 2011 at 2:30 am

Do you have an article on categorizing those expenses? Thanks for the excellent info! Found you via your Squidoo Lens of the Day. :-)
.-= Heather´s last blog ..My Latest Literary Obsession- The Hunger Games Trilogy =-.

Patricia Williams September 5, 2011 at 6:04 pm

What deductions do you have if you are an independent contractor or a Sales person working on commission only? I will also be receiving a 1099 Misc form along with W2s.

Should I be making estimated tax payments? Also, should I be paying for the regular deductions (ie social security, etc.) that normally are taken when you work as an “employee”.

Your site has been very helpful. Thank you!!!!

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