If you pay for a website for your business, here are some things to remember about claiming the costs. If you spend the money:
- before your business starts – then you claim the cost over five years once you start up
- after your business starts, and you pay:
- more than $1,000 you must claim the cost over four years
- less than $1,000 you can claim that cost as an outright deduction.
You can also claim an outright deduction for some ongoing expenses associated with running and maintaining your website, such as domain name registration fees and server hosting costs.
Let's look at three examples
1. You’re getting ready to start a business and you spend $2,000 for a website design. The $2,000 you spent before your business started can still be claimed against your business income over five years.
2. You’re in business and choose a business website hosting package that costs you $4,000 to set up. You also have to pay $350 a month, plus $50 a year for the domain name. The $4,000 should be claimed over four years. The monthly and yearly fees can be claimed as a deduction in the year you incur the expense.
3. You run a small business and have decided to promote your services online. You buy an $800 static website and pay $100 a month for hosting. The $800 can be claimed as an outright deduction, and you can also claim the monthly hosting fees as a deduction against your business income.