Domain investors may be able to deduct these expenses associated with their business.
U.S. tax returns are due April 15 this year, which means it’s crunch time.
If you’re like me and are still waiting for K-1s from investments, you can extend your tax filing deadline to October 15, 2019. Just be sure to make an estimated payment with your extension request.
Hopefully you had a great year with your domain investments. While working on your taxes, here are some business expenses to consider. Please note that I’m not an accountant and you should always check with a qualified tax professional before filing your taxes.
- Domain conferences – Did you go to Namescon last year? Perhaps an ICANN meeting or Merge? Add up the cost of admission, hotel, airfare, and ground transportation to report on your expenses.
- Annual domain registrations – These add up! Get all of your domain registration receipts together.
- Internet access – Whether at home or an office, consider if your internet access bills should be deducted as an expense.
- Home office – Have a room (or area) in your house that you use exclusively for your business? Talk to your accountant about taking a home office deduction (which may include a portion of your utilities and house maintenance, too). This deduction applies to both homeowners and renters.
- Mobile phone – A lot of domain transactions take place on the phone. If you use your mobile phone for business, you may be able to expense a portion or all of it.
- Domain services and software – Subscribe to DomainTools, Efty, keyword finders, or other recurring services? Don’t forget to tally these expenses.
- Web hosting – Especially for domainer-developers, your AWS or hosting bill is an expense.
- Meals and Entertainment – Did you go to a business lunch with someone? 50% of these expenses can be deducted.
- Legal expenses – It sucks if you faced a UDRP in 2018. The good news is you can deduct these expenses.
- Office supplies – Even if you don’t have an “office” per se, you may use various supplies in running your domain business. Think paper, printer ink, etc.
- The cost of tax preparation – You might have read that people can no longer deduct tax prep fees on their taxes. My understanding is that this does not apply to businesses that pay an accountant to prepare their taxes.
- Business taxes – While state and local tax deductions are now limited to $10,000, this doesn’t apply to taxes certain businesses pay. Double check with your accountant to see how this applies to you.