Today TaxMama hears from Floyd in Northridge, CA. He tells us “I need to know how you handle logo design and website design expenses for a new company.”
You have a few ways to go:
1) If the costs aren’t much in relation to total income, just expense them as advertising costs.
2) If there is income, but perhaps not that much yet, you can opt for treating them as Start-Up
costs and expense the first $5,000, amortize the rest over 15 years.
3) Or you can treat them as intangible expenses – and expense them over 15 years.
Be sure to break out maintenance costs as current expenses, rather than design costs.
Note: Remember, websites are advertising and need to be updated and revised regularly.
The logo, on the other hand, will have long-term use.
And remember, you can find answers to all kinds of questions about websites and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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