If you own a business, you probably know what a business write-off is and how it works. But if you’re new to owning a business or are looking for ways to save within your business, it pays to review. Basically, a business write-off is the cost of doing business. If you sell a service for $5 but it costs $3 to make, your taxable income will be the $2 difference. Of course, it’s not always that simple – there are some things that are not deductible. With that said, tax-deductible business expenses are a great way to grow your business while saving on overall tax liability. One of the prime places where you should consider concentrating business write-offs is in marketing. Marketing and advertising lower your cost of doing business through write-offs of the overall expenses and operations, while the advertising drives sales, hopefully, sparking high returns on investments (ROIs).

Is Marketing Tax Deductible?

Know what is deductible in the eyes of the IRS. And who better to determine that than the IRS itself? Direct from the IRS site:

To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.

Is marketing ordinary and necessary? In today’s world of stiff and ruthless competition, YES. Your business needs to be actively participating in the marketing environment in order to attract and keep customers. That means marketing is essential to meeting your business goals. Even if your goal is to simply keep a consistent sales level, marketing helps you retain your current customers. In fact, most businesses include marketing expenses as part of their deductibles. It’s important to note that marketing expenditures should be integrated in a vital and meaningful way. Advertising tax write-offs can and should be included in your business write-offs.

What Are Some Deductible Marketing Investments?

From traditional marketing strategies to integrating a digital strategy, your marketing ventures are all fair game. Here are some deductible marketing expenses:

  • Marketing Flyers Creation & Production
  • Website & Logo Design
  • Google Ads & PPC Campaigns
  • Social Media Ad Campaigns
  • Hiring an External Ad Agency

The key thing to writing off your marketing investments as business write-offs are to keep your receipts. Be sure to consult a tax professional to ensure that all your tax write-offs are appropriate.

In Conclusion

Owning a business is tough. In order to ensure a consistently high performance each quarter, you must save whenever you can. Incorporating marketing efforts into your business write-offs is key to saving on the financial bottom-line while simultaneously investing in future return on your investments.