The best website design companies for small businesses are ones that take into account industry trends, target audiences, and business goals to create an engaging, comprehensive website loaded with interesting content. Maintaining an aesthetically pleasing, engaging website takes time, effort, and money – all of which can add up over time. So, can companies write off their website design costs?
Are Website Design Costs Tax Deductible?
The answer? It depends. The costs of creating, developing, designing, and programming a website are considered a capital asset. This means that they cannot be expensed or deducted immediately; rather, they must be depreciated over time. However, some expenses can be deductible the year they were paid:
Deductible:
- If a third party sets up and runs your website, payments to those parties are deductible as ordinary and necessary business expenses. If the the total cost of the website and other equipment purchased is less than $25,000, you can expense 100% of the cost in the year it was paid.
- If your website is primarily an advertising tool, the IRS states that you can “deduct reasonable advertising expenses that are directly related to your business activities“ and that put your business in front of potential customers. This is considered an ordinary and essential business cost.
Non-Deductible:
- Non-deductible costs include the purchase of a domain name. Domain names are not deductible as advertising expenses because they do not put your business in front of potential customers, and instead just give you a place to have information about your company online.
- Expenses for updating or modifying content on a website may also be non-deductible, because they are considered maintenance costs.
Average Cost of Website Design for Small Businesses
For competent, experienced web designer, the going rate in 2021 to build a modern, professional small business website was typically $4,000-$10,000 but could be as much as $20,000 (or more) depending on the number of pages on the site and the amount of customization required. These costs include website design and hosting services as well as marketing costs, such as PPC ads or social media advertising campaigns. The benefits of using an experienced third party to design your small business’s website include:
- Being able to write off 100% of your website design costs in the year it was paid
- A professional and modern website
- Generating new leads, customers, and growing revenue
Doing research and finding a reputable web designer or design agency is the best way to get your business online. A professional website will cost you money, but can also boost sales and generate new revenue for your small business. At the end of the day it’s worth every penny!
Talk to a Website Developer Today
Whether you need help with online marketing, or mobile app development, D-Kode Technology is here for you. When you have a digital marketing team on your side, you can outsource everything from SEO to social media management, and more! Give us a call at (925) 420-8320 today to get started. Or, better yet, easily schedule a free marketing consultation right now by clicking this link and filling out a short form.
