3 ms·
> If you spent $1,000 on servers and your website made $10,000, then you’ll only pay taxes on the $9,000 in profit. I wonder if this is correct. Many places re
by hellofunk 6y ago
> If you spent $1,000 on servers and your website made $10,000, then you’ll only pay taxes on the $9,000 in profit.
I wonder if this is correct. Many places require you to deprecate assets such as computers over many years, so the deductions are not all taken out of your profit the year you buy them.
Sounds like this article is conflating the legalities of setting up a business with the accounting of operating one, two different things.
- bennylope 6y ago> Many places require you to deprecate assets such as computers over many years, so the deductions are not all taken out of your profit the year you buy them It's likely that in some accounting regimes you have to to this, but in my own experience with a small business in the US, multiple accountants have simply depreciated assets like our computers immediately. When I originally questioned this our CPA said we could depreciate it over several years but it wasn't necessary in our case (small enough [asset] value and lifetime) and not worth it. As it stands I imagine if someone is spending $1,000 per year on "servers" these are non-depreciable cloud service expenses.
- jeltz 6y agoDepends on your jurisdiction but in many places you are allowed to instantly depreciate small assets, but not allowed to do so with more expensive ones.
- coolgeek 6y agoIt depends on what "spent $1,000 on servers" means If you bought (and own) servers, you must depreciate and amortize them. These are capital expenditures, aka capex If you rented servers (e.g. AWS, GCP), you deduct the entire cost when it is incurred (or realized, depending on the details). This is an operational expense, aka opex