What Types Of Advertising/Marketing Expenses Can Small Businesses Deduct?

Jan. 11, 2023

Introduction

Small businesses in North America spend billions of dollars per year on advertising, marketing, and promotion. That’s a lot of money! To help keep some of that money in your business’s pocket, let’s look at what types of advertising expenses can be deducted from your business income on your taxes.

Does your small business deduct advertising or marketing expenses?

If you have a small business, you may be able to deduct some of the expenses associated with advertising and marketing.

Advertising and marketing can be expensive for a company of any size. It’s important to know what types of expenses are deductible so you can get the most out of your budget as possible.

You can deduct the cost of advertising to promote the sale of products or services, including advertising on TV or on social media, print media, such as newspapers and magazines, and direct/email mailouts.

What kinds of advertising expenses can a small business deduct?

A small business owner can deduct many of the costs associated with selling their product or service, in particular, if they relate to making sales directly. These items include:

  • Print and online advertising, including newspapers, magazines, trade journals or other publications (but not direct mail)
  • Radio and TV advertising
  • Direct mail, such as flyers or brochures that you mail to customers to promote your products or services
  • Promotional items like pens, hats & T-shirts for employees to wear when promoting your business
  • Travel expenses for salespeople who visit potential customers in their offices (if these travel costs are directly related to selling your product). If they arrive early or stay late at each appointment to talk with current customers before starting their next meeting scheduled on this trip, report those hours as well.

Conclusion

This can be a confusing subject, but hopefully, we’ve helped clear things up by outlining the basics of advertising and marketing expenses. If you’re still unsure, contact a tax expert or financial advisor who can help you with any questions. Faber LLP is here to help you get organized with your small business accounting and put you on the right track. Reach out to us today!