Are your marketing expenses tax deductible? Here are some basic rules for writing off advertising and your other marketing costs.
Ordinary Marketing Expenses Tax Deductible
Most ordinary business expenses for marketing, such as the cost of ads in print and online, are tax deductible. There is no dollar limit or other special rules for determining deductibility of your business’s marketing costs.
Marketing is intended to place your business in a positive light so that you attract more clientele. Most small business owners are intuitively aware of what constitutes tax deductible marketing expenses, which include (but are not necessarily limited to) the costs of the following:
- Any sort of traditional advertising, such as newspaper ads, radio ads, brochures, etc.
- Branding and logo design.
- Your website, including hosting, SEO services, design, creation, and maintenance.
- Outside marketing providers, such as bloggers, videographers, optimization, reputation management, etc.
- Press release creation and distribution fees.
- Sponsorships, such as having your logo printed for sports teams or local races.
- Holiday and thank you cards.
- Your business cards and letterhead.
- Direct mail campaigns.
- Market research and surveys.
- Product samples.
- Seminars, webinars, and workshops provided by your business personnel/
- Gifts to clients, but only up to $25 in value.
Non-Deductible Marketing Expenses
Some expenses often attributed to marketing may not be deductible. For example, if you entertain a client or potential customer at a restaurant or give gifts to clients or prospects, you may not be able to deduct the full amount of those expenses. If you take a client to dinner, you can deduct the client’s meal cost, but not your own. You may only deduct $25 per gift. If you purchase a skybox at a sports arena to entertain customers and potential clients, you may not deduct the entire expense if you purchase the box for more than one event at the same arena. You may only deduct the cost of a regular box seat at the same event.
Be thoughtful to carefully and document track all of your marketing and advertising costs. These are usually reported as a separate, deductible item within your tax return. When in doubt, work with your tax adviser to ensure that you are following the tax codes accurately. Also, here is an additional resource from the IRS.gov on deductibles and expenses.