Taxes

[MTLLodge]

How is the website deducted for taxes? Over 3 years, then time for a overhaul? Just getting an ideal.

 

[swirt]

It is advertizing, you could ovehaul and deduct it every year if you wanted to.
You could probably ammortize it over a few years to spread out the initial cost if you wanted to. Not sure how that works for something that isn't an actual "thing".

 

[EmptyNest]

I would claim it all as advertising. That's what my accountant did. Nothing to really amortize there.

 

[Innkeeper To Go]

Advertising.

 

[Samster]

Agreed...advertising. And don't forget the hosting costs.

 

[MTLLodge]

Do you take all the year you paid for it or spread it out and if spread out for how many years?

 

[Copperhead]

Do you take all the year you paid for it or spread it out and if spread out for how many years?.

It is an advertising expense. You deduct it ALL the year you paid for the work. The hosting, domain payments and any other work will be deducted each year as you spend it.

 

[Morticia]

Do you take all the year you paid for it or spread it out and if spread out for how many years?.

Do you take all the year you paid for it or spread it out and if spread out for how many years?

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.
Example...let's say that new site cost you $3k, but you've also got the expenditures for linens, and your listings on the different websites, and the mortgage, utilities, etc totaling up to $25k (all examples). Again let's say your income for this year is $10k (and let's hope it's a lot more!) you can only deduct $10k in expenses but you can 'hold onto' that $15k for a better year.
BUT, you need an acct to do this the correct way.

 

[vbwebsites]

Most of my clients use the write off as a business expense : Advertising

 

[muirford]

Do you take all the year you paid for it or spread it out and if spread out for how many years?.

Do you take all the year you paid for it or spread it out and if spread out for how many years?

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.
Example...let's say that new site cost you $3k, but you've also got the expenditures for linens, and your listings on the different websites, and the mortgage, utilities, etc totaling up to $25k (all examples). Again let's say your income for this year is $10k (and let's hope it's a lot more!) you can only deduct $10k in expenses but you can 'hold onto' that $15k for a better year.
BUT, you need an acct to do this the correct way.
.

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.

You can deduct more expenses than you have income in each year, and if you do, you can 'carryover' a loss from one year to the next. Alternatively, if you have other income (like if you or your partner have a job during the tax year, have rental income, or investment income) you can offset some of your income against the business loss to reduce your taxes. You don't want to do it for too long - a business that only ever generates a tax loss starts to look like a 'hobby' business to the IRS. Also, some things are not deductible (like health-care costs) against your business if your business doesn't generate a positive income.
But, Mort is right - consult an accountant. I happen to have one in my family but there is a company in Virginia that includes specific B&B tax consulting. When I called them before we bought (Raetz & Hankins) they sent me a set of guidelines for the business which were very helpful. Setting up your accounting correctly from the start will save you a lot of headaches later.

 

[Morticia]

Do you take all the year you paid for it or spread it out and if spread out for how many years?.

Do you take all the year you paid for it or spread it out and if spread out for how many years?

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.
Example...let's say that new site cost you $3k, but you've also got the expenditures for linens, and your listings on the different websites, and the mortgage, utilities, etc totaling up to $25k (all examples). Again let's say your income for this year is $10k (and let's hope it's a lot more!) you can only deduct $10k in expenses but you can 'hold onto' that $15k for a better year.
BUT, you need an acct to do this the correct way.
.

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.

You can deduct more expenses than you have income in each year, and if you do, you can 'carryover' a loss from one year to the next. Alternatively, if you have other income (like if you or your partner have a job during the tax year, have rental income, or investment income) you can offset some of your income against the business loss to reduce your taxes. You don't want to do it for too long - a business that only ever generates a tax loss starts to look like a 'hobby' business to the IRS. Also, some things are not deductible (like health-care costs) against your business if your business doesn't generate a positive income.
But, Mort is right - consult an accountant. I happen to have one in my family but there is a company in Virginia that includes specific B&B tax consulting. When I called them before we bought (Raetz & Hankins) they sent me a set of guidelines for the business which were very helpful. Setting up your accounting correctly from the start will save you a lot of headaches later.
.

See, that's why I said they need an acct...our guy says we can't go below 0.

 

[muirford]

Do you take all the year you paid for it or spread it out and if spread out for how many years?.

Do you take all the year you paid for it or spread it out and if spread out for how many years?

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.
Example...let's say that new site cost you $3k, but you've also got the expenditures for linens, and your listings on the different websites, and the mortgage, utilities, etc totaling up to $25k (all examples). Again let's say your income for this year is $10k (and let's hope it's a lot more!) you can only deduct $10k in expenses but you can 'hold onto' that $15k for a better year.
BUT, you need an acct to do this the correct way.
.

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.

You can deduct more expenses than you have income in each year, and if you do, you can 'carryover' a loss from one year to the next. Alternatively, if you have other income (like if you or your partner have a job during the tax year, have rental income, or investment income) you can offset some of your income against the business loss to reduce your taxes. You don't want to do it for too long - a business that only ever generates a tax loss starts to look like a 'hobby' business to the IRS. Also, some things are not deductible (like health-care costs) against your business if your business doesn't generate a positive income.
But, Mort is right - consult an accountant. I happen to have one in my family but there is a company in Virginia that includes specific B&B tax consulting. When I called them before we bought (Raetz & Hankins) they sent me a set of guidelines for the business which were very helpful. Setting up your accounting correctly from the start will save you a lot of headaches later.
.

See, that's why I said they need an acct...our guy says we can't go below 0.
.

See, that's why I said they need an acct...our guy says we can't go below 0.

I think it's true that you can't file a negative income number on your income taxes. But we had negative income from the business our first two years (while we were investing in long-deferred maintenance and marketing to increase our revenue) - so our Schedule C for the business had a negative number which offset our income from our old jobs. But we couldn't deduct our health insurance costs; the business had to have a positive income for that.
Losses to offset other income is what tax shelters are all about, and why the IRS gets interested if you say you are running a real business but it never makes you any money. So you can't do it forever, but we did it for our first two fiscal years of owning our inn.

 

[Morticia]

Do you take all the year you paid for it or spread it out and if spread out for how many years?.

Do you take all the year you paid for it or spread it out and if spread out for how many years?

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.
Example...let's say that new site cost you $3k, but you've also got the expenditures for linens, and your listings on the different websites, and the mortgage, utilities, etc totaling up to $25k (all examples). Again let's say your income for this year is $10k (and let's hope it's a lot more!) you can only deduct $10k in expenses but you can 'hold onto' that $15k for a better year.
BUT, you need an acct to do this the correct way.
.

First off, you need an acct. I say this because we're telling you to deduct the expense in the year you spent the money BUT you cannot deduct more expenses than you had in income. Soooo, if things are slow and they don't pick up, you can only deduct up to the revenue you made.

You can deduct more expenses than you have income in each year, and if you do, you can 'carryover' a loss from one year to the next. Alternatively, if you have other income (like if you or your partner have a job during the tax year, have rental income, or investment income) you can offset some of your income against the business loss to reduce your taxes. You don't want to do it for too long - a business that only ever generates a tax loss starts to look like a 'hobby' business to the IRS. Also, some things are not deductible (like health-care costs) against your business if your business doesn't generate a positive income.
But, Mort is right - consult an accountant. I happen to have one in my family but there is a company in Virginia that includes specific B&B tax consulting. When I called them before we bought (Raetz & Hankins) they sent me a set of guidelines for the business which were very helpful. Setting up your accounting correctly from the start will save you a lot of headaches later.
.

See, that's why I said they need an acct...our guy says we can't go below 0.
.

See, that's why I said they need an acct...our guy says we can't go below 0.

I think it's true that you can't file a negative income number on your income taxes. But we had negative income from the business our first two years (while we were investing in long-deferred maintenance and marketing to increase our revenue) - so our Schedule C for the business had a negative number which offset our income from our old jobs. But we couldn't deduct our health insurance costs; the business had to have a positive income for that.
Losses to offset other income is what tax shelters are all about, and why the IRS gets interested if you say you are running a real business but it never makes you any money. So you can't do it forever, but we did it for our first two fiscal years of owning our inn.
.

Ah, that must be it.