Are Marketing Costs Tax Deductible?

Apr 1, 2022 | Business Basics, Deductions

Your business might be the bee’s knees, but unless potential customers know you exist, you won’t get much traction.

As a business owner, you naturally want to make sure your financial investments produce results. So when money spent on marketing doesn’t pay off in the way you’d hoped, it can feel…frustrating.

But there IS a silver lining! U.S. tax law allows most business marketing costs to be written off on your yearly taxes.

Does this mean all marketing costs are deductible? Not exactly. But keep reading to find out what is and isn’t considered a legitimate marketing write-off. Plus you’ll learn about some bonus expenses you may not have considered!

Popular Marketing Strategies

Marketing philosophy + strategy can get extremely complicated, but for the sake of simplicity, we’re going to break it down into the 2 main categories that most small businesses utilize: online marketing and offline marketing. Here’s the breakdown:

Online Marketing

  • social media ads
  • website
  • blog posts
  • PPC (pay-per-click) advertising
  • email campaigns
  • SEO

Offline Marketing

  • TV commercials
  • print advertising (newspaper, magazines)
  • billboards
  • direct mail

If your business marketing is intended to bring in new customers and/or retain existing ones, the IRS considers it an eligible deductible expense. Keep in mind that your marketing expenses must be considered both ordinary and necessary – i.e. the expense has to pass the sniff test with the IRS. So if you’re in the Rent-A-Chicken industry (yes – that’s a thing) and you’re trying to write off that bougie retinol serum you picked up from Ulta last week (because looking great is part of marketing your brand, amiright?), you may want to reconsider…unless you want Uncle Sam knocking on your door.

Bonus Deductions for Tax Savings

Other marketing expenses you may not have realized are deductible include:

  • social media expenses
  • technology and marketing software expenses
  • money used to pay marketing consultants or agencies
  • SEO services
  • influencer marketing

So what isn’t tax deductible?

While most reasonable marketing dollars spent are deductible, there are a few items that are no-go’s.

  • Advertising in any publication that’s being used by or for a political candidate or party.
  • The cost of driving a vehicle around that serves as a marketing tool. But the cost of placing the ad on the vehicle itself is deductible.
  • Costs that are primarily personal, even if they have nominal business promoting value.

Work With Us to Maximize Your Marketing Budget & Tax Savings

Here at Tax Savvy Jessica, we have years of experience finding ways to save our clients money while helping them build financially thriving businesses.

If you’re ready for a Taxpert to take the stress of managing deductions off your plate, contact us today to discuss your options!

You May Also Like

Clean Vehicle Tax Credit

Clean Vehicle Tax Credit

As the public interest in climate-friendly investments grows, we will continue to see developments set by global and local governments to incentivize individuals and businesses towards more climate-friendly choices and operations. One such development can be found as...

What’s The Deal with Depreciation?

What’s The Deal with Depreciation?

Whether your business is young or well-established, you've probably spent a lot on necessary tools and services. Payment platforms, computer equipment, dedicated phone lines, and office supplies are just a few items you need when operating a small business. Although...