What You May Deduct
You may deduct expenses for Advertising your business. Acceptable advertising expenses that can be deducted include:
- "Reasonable" expenses for advertising. Some examples would be printing of business cards, Yellow Pages ads, newspaper advertisements, TV and Radio ads costs (including production costs), and costs for setting up your business website.
- Expenses for promotion activities, like sponsoring local events, special events to bring people to your business, publicity costs.
What You May NOT Deduct as Advertising Expenses
- You may not deduct costs that are primarily personal, even though they may have some promotion value. For example, if your daughter is getting married and you invite some of your best customers to the wedding, you can't deduct the wedding costs.
- You may not deduct costs of personal hobbies carried on with business associates. For example, if you and a customer like to go to NASCAR events, you can't deduct these costs as "advertising."
- If you use your web site for advertising, you may deduct web maintenance costs as an advertising expense. If you use your website for selling (having a shopping cart, for example), this is a cost of selling and is considered separately.
- Costs for temporary signs are considered advertising. Costs for permanent signs (that last more than a year) are not advertising, but signs may be depreciated as long-term assets.
- Costs for help-wanted ads are a deductible business expense, but they are not considered 'advertising.'
Where to Deduct
- For sole proprietorships and single-member LLCs, this expense is recorded on Line 8 in Part II- Expenses.
- For Partnerships and multi-member LLCs, this expense is recorded in Line 20, Other Deductions.
- For corporations filing a Corporate Tax Return on Form 1120, this expense is recorded on Line 22.