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Here are their responses: Peter Pappas, Attorney and CPA, Managing Partner Pappas & Associates, P. Costs for designing your businesses website and maintaining it are ordinary and necessary business expenses and, therefore, tax deductible.
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Most of the previous answers are very right that “ordinary and necessary” expenses are generally tax deductible.
This is the typical excuse for deducting anything a business owner wants.
However, the IRS allows a business to deduct up to 0,000 of captial expenditure (including website development) in 2008 under section 179 (increased from the 5,000 available in 2007 by the Economic Stimulus Act of 2008, see = making 2008 an extremely good year to invest in website development from a tax strategy standpoint.
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Then, to compound the complexity, even if your client follows all the rules and correctly capitalizes the intangible assets from part of your services, then then we run into the fact that the IRS also allows the deduction of a large amount of captial expenditure for business each year under section 179 (up to $125,000 in 2007).