Marketing Costs: Small Business Tax Deductions

Most who are self-employed or small business owners use tax deductions and write offs to relieve the effects of tax time on their bottom line. What’s odd is that of all the deductions they claim, not many think to deduct their marketing expenses. Sure, you’ll hear about auto maintenance and mileage, deducting your home office, business-related supplies or expenses, and other tax deductions for self-employed and small business, but somehow marketing expenses may slip your mind.

According to the IRS, your advertising marketing expenses must be reasonable and directly related to your business activities to be tax deductible.

Here are some real-world examples of marketing expenses that are deductible:

Marketing Flyers

As an ordinary business expense, the cost for the creation and production is typically deductible. Similar to business cards, brochures, newspaper ads, holiday cards, etc. – ordinary marketing expenses are tax deductions come tax time. You’ll want details and receipts for these purchases, with clear, documented use for each expense in the event the IRS wants to look more closely. 

A New Website

Launching a new website and the accompanying related costs could be fully-deductible. Here’s a look at what’s tax deductible:

Cost for the design if you hired someone to do it

Cost for the template if you purchased the design pre-made

Cost for hosting the site and the domain fee

Cost for any premium services (like add-ons or plug-ins for your site)

Cost for maintenance

Even if you didn’t have a new website created this year, your hosting and fees associated with the maintenance and upkeep may be deductible.

If you created a new blog and are using freelance bloggers for your content, be sure to keep records of your related expenses because they can often be tax deductions as well.

Search or Social Marketing Campaign

If you ran a search campaign or any kind of social marketing campaign, your costs may be tax deductible. Similar to traditional forms of advertising on paper, marketing campaign-related costs through digital channels can also be deductible. Here are some examples:

Google AdWords or Search Pay-per-click (PPC) campaigns

Facebook ad campaigns

Twitter ad campaigns

Display banner ad campaigns

Costs for hiring an agency to conduct any of the campaigns above

Again, you’ll want detailed records and receipts for these marketing expenses.

It’s important to remember however: you should always consult with a tax professional  about what is and is not deductible for your tax situation. Keep documentation and detailed records of how things were used.

Liberty Tax Service
<p> Founded in 1997 by CEO John T. Hewitt, Liberty Tax, Inc. (NASDAQ: TAX) is the parent company of Liberty Tax Service. Liberty Tax’s online services are available through eSmart Tax, Liberty Online and DIY Tax, and are all backed by the tax professionals at Liberty Tax locations and its nationwide network of approximately 35,000 seasonal tax preparers. <br /> <a href="" rel="nofollow" target="_blank" title="LibertyTax">Liberty</a> | <a href="" target="_blank" title="Liberty Tax on Twitter">@LibertyTax</a> | <a href="" target="_blank" title="Liberty Tax on Facebook">Facebook</a> | <a href="/author/liberty-tax-service/all-posts" title="Liberty Tax Service blogs">More from Liberty Tax</a></p>


Post new comment

The content of this field is kept private and will not be shown publicly.
This question ensures you are a human visitor to prevent automated spam submissions.
Enter the characters shown in the image.