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lc03
New Member

Can I deduct expense a client pays me to cover?

I own a website design agency and pay for monthly hosting for websites for my clients. I then charge them a fee for hosting and maintenance and they pay me monthly. Can I deduct the cost that I pay to host all the websites as a business expense under something like software expense?

 

And would that mean all of what they pay me is monthly income and I deduct the cost I pay to the website hosting service?

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1 Reply
JohnB5677
Expert Alumni

Can I deduct expense a client pays me to cover?

Yes, you should be filing your taxes with a Schedule C that provides for Self-Employment.  You're correct that the fees the clients are paying you will be included as revenue on the Schedule C.

 

Yes, you can deduct the cost I pay to the website hosting service, and if the deductions qualify, there may be other expenses that you can use as business.

Some may include:

Also remember that you will not only be subject to income tax.  You will also owe self-employment tax.

The self-employment tax rate is 15.3%. That rate is the sum of 12.4% for Social Security and 2.9% for Medicare.

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