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:
* eBay fees
* Web hosting
* Domain names
* PayPal fees or shopping cart fees
* Shipping fees and supplies
* 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.