Tax deductions for your eBay business: internet and computer costs

Can you deduct your internet and computer costs on your income tax return if you use your computer for both your eBay business and for personal use?

Yes, you can deduct a portion of your computer and internet costs on your tax return.  Your tax deduction is based on the percentage of time you use your computer and internet for your eBay business. Technically, you should keep a log of your internet usage to determine how much is for your eBay business and how much is personal, but that isn’t very practical for most people.

My best advice is to just use common sense and good judgment when determining how much to deduct on your tax return. Try keeping a log for a week or a month to see how much you really use your computer for your eBay business vs. personal use. 

Whatever method you choose, make sure that your tax deduction is reasonable for your eBay business in case you ever get audited.  For example, if you only have one computer, but you have children and a spouse who uses the internet, don’t try to deduct 90 or 100% of your internet charges – the IRS will not believe you and you will lose the deduction.

For more tax deductions that you may be able to deduct for your eBay business, please read our free special report, Tax Tips for eBay Sellers.

Tags: ebay tax deductions, ebay tax, income tax on ebay profits

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