What you can write off, what changed for new website builds in 2025, and what’s worth paying for before December 31. Written by a web agency, not an accountant.
Every November and December, a few clients call us with the same question. They’ve had a good year, their accountant told them to spend some money before December 31, and they want to know if the website counts.
For most businesses, it does. Hosting, your domain, maintenance, plugin licenses and the marketing tools around your site are ordinary business expenses, and they come off in the year you pay them. A new website build is more complicated, and that part of the rules changed in 2025.
I’m not an accountant, and nothing here is tax advice. We build and look after websites for more than 400 small businesses, and this is what we’ve learned from our clients’ CPAs and from the IRS’s own guidance. Take it to your CPA before you spend anything.
Is website design tax deductible?
Yes, in almost every case. The question your accountant will care about is when. Some website costs come off this year’s taxes. Others used to be spread across several years, and that changed recently.
Here’s the rough split.
| Website cost | How it’s usually treated | When it comes off |
|---|---|---|
| Hosting and domain | Ordinary business expense | The year you pay it |
| Maintenance and support plans | Ordinary business expense | The year you pay it |
| Plugin licenses, software subscriptions and marketing tools | Ordinary business expense, often booked as marketing | The year you pay it |
| SEO, content and ads | Advertising and marketing | The year you pay it |
| A new website design and build, or a full redesign | Depends on how your accountant classifies it | Often the year you pay it, for US work under the 2025 rules |
Websites show up on most lists of small business tax write offs as a single line. The table above is why that line deserves a second look.
The ongoing costs are the easy part
Anything you pay to keep the site running counts as a normal cost of doing business. That covers hosting, the domain renewal, security, backups, the monthly maintenance plan and the hours someone spends making changes for you. If your books are on a cash basis, and most small businesses’ are, it comes off in the year the money leaves your account.
Subscriptions and online tools count too. Our own accountant books them as marketing, which is usually where they belong. Your email platform, scheduling software, review tools and premium plugins all exist to bring in customers.
Our Partnership Plan rolls hosting, maintenance and a monthly support hour into one invoice, starting at $175 a month. Come tax time, that’s one line for your accountant instead of four vendors. If you want to compare what plans like ours cost across the industry, our breakdown of website maintenance costs covers it.
What changed for new websites in 2025
This is the part most articles on the topic haven’t caught up with.
From 2022 through 2024, many accountants treated custom website development as software development. Under the rules at the time, software development costs had to be spread over five years. A business could pay $12,000 for a new site in 2023 and deduct only a small piece of it on that year’s return.
The One Big Beautiful Bill Act, signed July 4, 2025, added Section 174A to the tax code. For tax years starting in 2025, businesses can once again deduct domestic research and software development costs in the year they pay them. Development work done outside the US still has to be spread over 15 years.
For a website, that means this. If your accountant treats your build as software development, and the work was done in the US, the full cost may come off this year’s taxes. That’s a different answer than you’d have gotten two years ago.
Not every accountant classifies a website the same way, and the answer can depend on what you bought and who built it. Ask whoever builds your site where the development work happens. It changes the math.
If you paid for a website between 2022 and 2024 and your accountant has been spreading the cost out, there may be a balance left. The new law lets businesses deduct what’s left in full on their 2025 return, or split it across 2025 and 2026. The IRS explains the options in Revenue Procedure 2025-28. That one is worth a question at your next appointment.
Can you prepay website costs before December 31?
Often, yes. If you’re doing year-end tax planning with your accountant, this is where website costs come in handy.
The IRS has what accountants call the 12-month rule. If you pay in advance for a service, and the benefit doesn’t run more than 12 months past when it starts or past the end of next year, you can usually deduct it in the year you pay. You don’t have to spread it out.
For a website, that usually means a year of hosting, a year of your domain or a year of a maintenance plan, paid in December. Our clients can prepay the Partnership Plan for the year ahead if that’s what their accountant recommends.
Your CPA will know whether the 12-month rule fits your books. Businesses that keep accrual-basis books have a few more rules to clear.
Should you buy a website for the tax write-off?
Probably not, if the write-off is the only reason.
A deduction lowers your taxable income. It doesn’t make the purchase free. Say you’re in the 24% federal bracket and you spend $6,000 on a website. The deduction saves you about $1,440 in federal tax, and you’ve still spent the other $4,560. State taxes change the numbers a little, but not the idea.
Year-end timing helps when you already need the work. Maybe the site is slow, it’s hard to update, or it doesn’t show up when people search for you. Maybe it’s running on plugins nobody has touched since 2021. If you were going to fix it in March anyway, paying in December can move the deduction into the year where it helps more.
That’s the honest version of the year-end write-off. You spend money you were already going to spend, a few months sooner, on something that will still be working for you next December.
If budget is tight, tell us. We love finding creative ways to work within smaller budgets, and our affordable web design projects start at $6,000. Our guide to small business website costs covers what drives the price.
What to ask your accountant before you spend
Bring these to your next conversation.
- Will you treat a new website build as software development under Section 174A, or some other way?
- Does it matter that the development work was done in the US?
- Can we prepay hosting or a support plan this year under the 12-month rule?
- Should our website tools and subscriptions go under marketing or software?
- We paid for a website between 2022 and 2024. Is there a balance we can deduct now?
- Would this deduction help us more this year or next year?
Whoever builds your site should be able to give you an invoice that breaks out design, development, hosting and support as separate lines. That makes every one of those questions easier to answer.
Common questions
Is website design tax deductible?
For most businesses, yes. Ongoing costs like hosting, maintenance and design updates are ordinary business expenses, deducted in the year you pay them. A new website build may be fully deductible in the year you pay for it under Section 174A, for tax years starting in 2025, if your accountant treats it as software development done in the US. Check with your accountant before you count on it.
Is web hosting tax deductible?
Yes. Hosting and domain fees for a business website are ordinary business expenses. Most small businesses deduct them in the year they pay, and a prepaid year of hosting can often be deducted in the year you pay for it under the 12-month rule.
Can I prepay website maintenance to lower this year’s taxes?
Often, yes. Under the IRS 12-month rule, a prepaid service whose benefit lasts no more than 12 months, and doesn’t run past the end of the following tax year, can usually be deducted in the year you pay. A year of a maintenance plan paid in December usually qualifies. Your accountant should confirm it fits your books.
Can I still deduct a website I paid for in 2022, 2023 or 2024?
Possibly. If your accountant spread the cost over five years under the old rules, the 2025 tax law lets businesses deduct the remaining balance in full on their 2025 return, or split it across 2025 and 2026. The IRS covers the options in Revenue Procedure 2025-28.
Are website subscriptions and tools tax deductible?
Yes. Email marketing platforms, scheduling software, review tools and premium plugins used for your business are ordinary business expenses. Many accountants book them as marketing.
Planning a website project and want a number before the end of the year? Tell us what you need, and we’ll give you a straight answer after a short conversation. Your accountant can take it from there.
