Are your marketing expenses tax deductible?
The money you invest in marketing can lead to amazing results when you use an agency like OxDesign. Marketing expenditures can also lead to significant tax benefits. The following are some basic rules for writing off advertising and your other marketing costs.
Standard Marketing Expenses
The most basic 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.
The intention of marketing is to place your business in a positive light so that you attract more customers. Tax deductible marketing expenses, which include 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, contact us with any questions on what’s deductible.