Duducting invention cost from your taxes

[Contextion]

Duducting invention cost from your taxes

by Contextion » Mon Apr 09, 2007 12:28 pm

Contextion

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Im saving all the receipts I can to deduct them from my next year taxes if I can. I dont know if I need to have a business to do that or not. Anyone have any advice writing off invention cost from your taxes?

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[Road Show]

by Road Show » Mon Apr 09, 2007 7:19 pm

Road Show

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Keep saving your reciepts...they are only deductible as a business expense, but you must have a business. They can be deducted as startup costs if you eventually open a business as an independent product development company or something of the like.

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[Roger Brown]

taxes

by Roger Brown » Wed Apr 11, 2007 7:17 pm

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• Website

One thing I do is scan in some of the receipts. Because a lot of places use that cheap paper and ink that fades after a couple of months. ATM machines are horrible for doing that. You are lucky if you can still read them after 2 months.
You can deduct the cost of a website and any domain names you have registered that go along with your business. Also, any materials you buy to test out your invention idea or tools needed to build them.

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[Work2XL]

I do believe they are deductable

by Work2XL » Wed Apr 25, 2007 8:37 pm

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I am not a CPA, and can not say for sure, but I do know that in some instances Hobbies are deductible. If you can prove that it is meant for economic gain. IE. photography equipment and classes if you are trying to be a freelance photographer.

So, if you can show that your hobby is inventing, and you are planning to sell an invention, then theoretically it should be deductible.

It shouldn't be too hard to call a tax adviser, or even look it up online to verify my information. As a matter of fact I absolutely would verify it before I tried to use it as a deduction.

Randy

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[DannyB]

by DannyB » Thu Apr 26, 2007 7:02 am

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I’m no tax expert, but I do most of my own tax prep work before giving it to a CPA for review and preparation for filing. I absolutely hate the IRS and have bought publications, books, etc. to learn every way legally possible to keep as much of my income as I can. I deduct just about everything but my underwear. If my underwear had my business name embroidered on it I would deduct that.

I don’t think you have to actually have a “businessâ€

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[Contextion]

by Contextion » Tue May 01, 2007 3:27 pm

Contextion

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Location: San Rafael CA

I plan on starting an invention company so I can invent stuff for other people's money and make a profit after buying all the equipment I need. Ill have a whole room dedicated to inventing rather it be music, ideas, gadgets or whatever. Then I can take the footage ratio - room/house - and apply it to all house bills to save for my start up cost. I will also record my hours worked and miles traveled along with any other cost I may occur related to my inventing.

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[kevio]

Re: taxes

by kevio » Thu Dec 27, 2007 10:24 pm

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You can deduct the cost of a website and any domain names you have registered that go along with your business. Also, any materials you buy to test out your invention idea or tools needed to build them.

I don't think you can claim a deduction on something you haven't paid tax on, ie: Website registration. So unless you happen to live in the same state as the registration company you used, you probably didn't pay tax. Same goes for purchasing business items online and out of state. I always pass that stuff on to my accountant anyway. But as far as I know, you can't get taxes back on items you didn't pay tax on.

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[Road Show]

Re: taxes

by Road Show » Fri Dec 28, 2007 8:43 am

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You can deduct the cost of a website and any domain names you have registered that go along with your business. Also, any materials you buy to test out your invention idea or tools needed to build them.

I don't think you can claim a deduction on something you haven't paid tax on, ie: Website registration. So unless you happen to live in the same state as the registration company you used, you probably didn't pay tax. Same goes for purchasing business items online and out of state. I always pass that stuff on to my accountant anyway. But as far as I know, you can't get taxes back on items you didn't pay tax on.

FYI, kevio, this topic is about NOT paying Federal income tax on money spent to develop a product, and not about recovering taxes paid on items purchased to develop a product.

RSG

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