Solved: Deductible business expense (website fees)
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mercurynfo
Level 2

Deductible business expense (website fees)

My wife has a SP business (Zumbini and Zumba franchise).  One of the ways she get's clientele is through another franchisee's website.  She receives income only after pre-paying franchise licenses, music codes for franchise IP, transaction/payment fees, rent (pre-pandemic).  Question is this: if she uses another franchisee's website to capture business, and has to pay a peer a fee for using the other person's website, what category is this expense?  It's not technically advertising though the other person's website does cover a wider client base.  Is this a miscellaneous fee?  

 

Just trying be as circumspect as possible with our taxes binning each business expense as the IRS would like them to be.  IRS Pub 535 is woefully lacks the ability to address some the more esoteric deductible business expenses.

 

Please no guesses; only answer if you really know or feel confident about the answer.  Thanks much.

1 Best answer

Accepted Solutions
ToddL99
Employee Tax Expert

Deductible business expense (website fees)

You can categorize these expenses - fees for using another website - in a number of ways. My recommendation would be "Advertising" (web ads) (see screenshot, below).

 

The IRS won't have a problem with how you describe these costs, as long as you are consistent from year to year.

 

If you want to provide additional detail (e.g. "3rd party Web Referrals"), you can enter them in the "Other Miscellaneous Expenses" interview of Business Expenses > Other Common Business Expenses. (see other screenshot, below)

View solution in original post

1 Reply
ToddL99
Employee Tax Expert

Deductible business expense (website fees)

You can categorize these expenses - fees for using another website - in a number of ways. My recommendation would be "Advertising" (web ads) (see screenshot, below).

 

The IRS won't have a problem with how you describe these costs, as long as you are consistent from year to year.

 

If you want to provide additional detail (e.g. "3rd party Web Referrals"), you can enter them in the "Other Miscellaneous Expenses" interview of Business Expenses > Other Common Business Expenses. (see other screenshot, below)

View solution in original post

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