Many online business owners hesitate to do Internet marketing because of the cost.  Many people have the idea in their heads that running an online business is easy and costs next to nothing, but can make you rich overnight.  The good news is that while this isn’t true, any Internet marketing you do is at least deductible from your gross income as a business expense.

There are many different kinds of business expenses, some of them pretty complicated.  For instance, business equipment and property requires Form 4562, Amortization and Depreciation.  Since classifying property is a tricky thing and can change how much you are paying in taxes, you may have to look into cost segregation services to make sure you’ve done it right.  You can use this net present value calculator to determine whether cost segmentation is right for your business.

Internet marketing is a little different.  It’s a pretty straightforward expense, and goes under the “Advertising” category on your Form 1040 Schedule C.  The full cost is deductible in the year that you spend the money (since advertising is kind of an ongoing thing, rather than a one-time expense that covers you for many years), which makes it much easier to manage.

Technorati Tags: business equipment, business expense, cost segmentation, cost segregation services, Form 1040 Schedule C, Internet marketing, net present value