Following the budget discussions in Washington has revealed at least one theme. Congress seems to be anxious to find ways to reduce the tax deductions that are available to individual taxpayers. The latest discussion is focused on taking away or limiting the deductibility of chartable contributions and home mortgage interest. Fortunately the deductions available for business owners have not been touched.

Last week I introduced the subject of using websites to help increase your tax deductions. This week I would like to expound on that idea. The tax code says you are allowed to deduct anything that is ordinary and necessary for the production of income.   Now what does this have to do with beaches or fly fishing?

Let’s say you have a website that rates beaches. It could judge them based on various criteria such softness of the sand, number of days of sunshine, privacy or anything else that might be useful. If you operated this type of business wouldn’t it be an “ordinary and necessary” business expense to go to beaches all over the world in order to study them?  Of course it would! We certainly would not want to provide our website visitors with inaccurate information. 

But what about the second part of the deductibility test? We see that the expense of traveling to the world’s greatest beaches would certainly be ordinary and necessary but how about the “for the production of income” part?

Up until now, the production of income from this type of website has been something we have had to allow our clients to figure out for themselves. Adam O’Conner has spent his career creating and maintaining “niche” websites that generate advertising and affiliate income.  Could that niche be the world’s greatest beaches, or fly fishing, or even traveling with a pet?  Sure it could!

Adam has agreed to do a free webinar for us called

Websites for Income and Tax Savings
 

April 1 at 3:00 pacific time

In this webinar Adam and I will explain how to create a website around something you love to do while, at the same time generating revenue from advertisers and affiliate programs and being able to deduct the expenses.

This webinar will also introduce you to a second strategy that will help you take advantage of the passive losses you have been accumulating year after year possibly generating my favorite type of income – Tax Free Income!

Don’t miss this free webinar where you can learn to generate income and tax savings at the same time!