A lot of marketing costs are tax deductible but there are some marketing expense tax pits to evade. There are a lot of questions begging for answers and one prevalent one is – is every expense on marketing tax deductible? The answer is yes but it is not without exceptions.

Here are some basic laws for writing off marketing and advertising costs. It also includes the marketing expense pits you should avoid.

Basic marketing expenses

Most of the basic marketing services like the cost incurred in printed and online advertisements are deductible. The truth is that there is no special rule or law that guides how marketing costs should be deducted.

Some other examples of basic advertising costs that are fully deductible includes billboard rentals, business cards, package design costs etc.

Promotions and prizes

Small businesses often incur various costs – attempting to promote their businesses. The accumulation of these costs has a way of benefitting your company in the long run and they are currently deductible. These includes prizes, awards, sponsorship of teams and events.

One trap you should avoid is coupons and discounts for customers because they are not deductible. Rather, they are simply a reduction in the proceeds from the sales they generate.

Social Media

Social media like Facebook, Twitter and LinkedIn are often viewed by small business owners as a low budget or absolutely free marketing scheme, but they could rank as deductible costs. This includes amounts paid to freelance bloggers, amounts spent on Google ad-words, and subscriptions to premium social media sites like the professional version of LinkedIn etc.

The costs incurred in financing the people who are in charge of managing your social media is not deductible as a marketing expense. They are rather deducted as wages hence, pay roll taxes apply.

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