Heads up: this article is only relevant for U.S. businesses.
Internet services
Having a fast and reliable internet connection is a requirement for almost every business. The cost of an internet service is fully deductible as either an office expense or utility expense. However, if you run the business out of your home, you’ll need to factor in the square footage of your home used for business versus the entire square footage of your home. Calculate the percentage of your home dedicated to business use and apply that number to the internet provider fees. This new number is the amount you can claim.
Domain registration and web hosting
Your business website plays an integral role in your brand image, whether it’s a full storefront, or a simple landing page. Fortunately, you can generally deduct internet related expenses, including domain registration fees. These expenses are deducted on Schedule C, as other expenses. Note that if the business is new, you may need to amortize these expenses as start-up costs.
Online tools and apps
Tools that are used in the everyday running of your business are deducted as either office expenses or other expenses depending on the specific purchase. These tools often become integral parts of your business and although many of them come with accessible price tags, expensing these costs still provides a significant benefit. For example, if you pay for tools like Evernote, SEM Rush, MOZ, Hootsuite, Buffer, or Skype, and you use them solely to support the operation of your business, you’re able to deduct 100% of the subscription cost on your tax return.
