Advertising and Promotion

Some examples of deductions:

  • Cost of brochures purchased (either of your product or of your services).
  • Cost of Business Cards
  • Cost of newspaper advertisements
  • Cost of┬ápromotional items with your business name imprinted on them (i.e., pens, calendars, Christmas cards, magnets, etc.)
  • Costs involved in website development used only for advertising or marketing purposes. This is only if the website design is developed (designed in-house by the individual or company launching the website). (If an expense is incurred to acquire, develop or construct a website used for the purpose of earning assess-able income it may be considered an expenditure on custom software and therefore required to be capitalized and written off as a depreciable expense over a period of there years. The website development expense is highly controversial and the IRS has not yet issued formal guidance on when Internet website costs can be deducted.)

For tax purposes, Advertising & Promotion is recorded on IRS Form 1040 Schedule C if you operate as sole proprietor or as a single member of an LLC.

This article provides general information and may not apply to your particular situation. In addition, this article does not offer legal or tax advice.

The Internal Revenue Service recently issued regulations that require written advice regarding tax matters to meet very detailed and comprehensive requirements before it can be relied upon by a taxpayer to avoid penalties that might apply if the tax benefits or results discussed in this article are disallowed. Compliance with these rigorous standards and requirements exceeds the scope of this article. Consequently, the analysis and advice contained in this article regarding federal tax matters is not intended to be used, and may not be relied upon by you or anyone else, for the purpose of avoiding any federal tax penalty.