Tax Info Write Offs

[Touchmint]

Sorry if this has been asked before or is somewhat common sense for some but I didnt see anything in the first 20 or so pages so I figured I would ask.

Now that I am making a small amount of money(just starting this year 2012) I guess I should be thinking about writing some expenses off?

I have been keeping receipts for anything close to business related but I am a little unsure of what counts and what does not.

I understand that direct things such as developer fees and work computers count but I don’t know about much else than that. I have heard people talking about how they write off pretty much everything but is that legal? Also I am a little fuzzy on how it even works to be honest.

So say I take a trip to vegas to play in a baseball tournament and promote my app(baseball app) is that something I could really write off?

How about going to dinner with some friends and getting ideas for new app ideas?

How about buying competitor apps or even other video games and using them as research for my new games or apps.


Now about how it works is this just something that goes in as an expense that I subtract from my earnings? Say I make 5k from the app store and I spend 4k on the above I really only had a 1k profit?

I could go on and on for days but I wont anyways if anyone has some insight or can point me in the right direction that would be great thanks!

[CharlieEvans]

Originally Posted by Touchmint

So say I take a trip to vegas to play in a baseball tournament and promote my app(baseball app) is that something I could really write off?

How about going to dinner with some friends and getting ideas for new app ideas?

How about buying competitor apps or even other video games and using them as research for my new games or apps.

I'd say all three are legitimate business expenses, but of course I'm not a lawyer or an accountant so take that as you will
Basically if you are spending money on anything that is any way associated with running your business you should count it as a business expense. Anything that is a business expense comes out of your business account and you never will pay taxes on it, making these business expenses around 30% cheaper than if you were paying for them out of your own after tax income.

So if you had 100$ in your business that you wanted to spend on advertising, you'd spend that 100$ as a business expense. If you paid that 100$ out to yourself then you'd have to pay taxes on it and would only have 70$ in the end for advertising.

I'm not sure what the specific rules on business expenses are, but I think they are quite flexible. Things like having listing your rent as a business expense if you work out of your home are around where the line is drawn I think. Research and Development, any travel and travel expenses associated with promoting or developing your business, and lots of other things can safely be written off though

[tomtom100]

Originally Posted by Touchmint

How about going to dinner with some friends and getting ideas for new app ideas?

How about buying competitor apps or even other video games and using them as research for my new games or apps.

As you write off very often things that in "borderline", you will surely get "flag" as ideal candidate for tax audit. Tax auditing is fun.

My suggestion, get an accountant even though expensive but will save you headache in the long run.

[dre]

In general it's not a good idea to ask tax related questions in public forums. No serious accountant will be answering them (they may get into legal trouble if something gets screwed up - no free speech here) and you don't want answers from programmers about taxes.

Just record all your revenue, record all your expenses that you believe are related to your business, keep all the receipts, then go to a professional accountant and have your taxes done. The accountant will tell you what can be written off and what cannot in YOUR PARTICULAR SITUATION.

[Profile]

Or . . . . . (OK, time for a shameless plug), you could go to the app store and download my "iDeductible" app which lists hundreds of tax deductible items (For U.S. returns) in various categories. (I was a tax accountant for 25 years before I retired from the business and went into teaching.)

[Touchmint]

thanks for the heads up guys and yea I think I will check out the app thanks. In the end I figure I will need to head to an accountant but it wont hurt to check out the app.