How to Classify Content Articles as a Tax Deduction?

[Amy Bass]

I am in the USA and am trying to get my finances organized. I order a LOT of content articles from websites where there are multiple writers (not just going through an individual.)

How would I classify this as a tax deduction? Advertising? Contract Labor? Office Expenses?

I don't think I could give the website/business (not an individual) a 1099 right? Would I even need to do that?

The articles are used both for marketing and for content on my blogs. Any insights would be helpful.

[Dan C. Rinnert]

Originally Posted by Amy Bass

I don't think I could give the website/business (not an individual) a 1099 right? Would I even need to do that?

If they are not incorporated, yes. But, it depends upon how it works.

If I remember right, Elance, for example, is just a contact source. As a buyer, you don't pay Elance at all; the payment may go through Elance, but you're actually paying the seller direct. Kind of like eBay.

So, in that case, the service provider is the one you need to worry about. If you pay a single service provider $600 or more, you'll need to do a 1099.

If the sites you deal with are the service provider, then it would be different. For example, if you order articles through XYZ Article Company and you pay XYZ Article Company, you probably need only worry about them. If they outsource the articles to multiple writers or have multiple writers on staff, that's their business.

If XYZ Article Company is a non-incorporated business owned by John Smith, then you may need to do a 1099 for John Smith if you paid XYZ Article Company more than $600.

It can be confusing, so it's important that you know (and can document) how each site works, so that you can do the proper forms and reporting for each of them.

The best thing to do, though, is discuss it with an accountant.

[BradCarroll]

I second the accountant move. It seems like an expense, but if you pay a good one, you'll save a lot more than you pay them.

[Amy Bass]

Does anyone have personal experience with tax deducting articles?

[TheWealthSquad]

You can take a deduction for anything that is a normal part of doing your business.

In this case it appears you may have hired contract labor to create the articles. If that is the case you would need to issue 1099Misc for anyone you individually paid more than $600.

If you brought pre -existing PLR material then it would be a supply cost.

If you bought them all through one company and paid that one company it would easily fall into outside services. You would not need to issue a 1099Misc.

This does not constitute legal tax advice Check with your local tax prep person. If you want me to help you with them, PM me and I will give you a quote