J.K. Lasser's Small Business Taxes 2015: Your Complete Guide to a Better Bottom Line

CHAPTER 15 Advertising Expenses

1. Ordinary Advertising Expenses
2. Promotion of Goodwill
3. Prizes, Contests, and Other Promotional Activities
4. Help-Wanted Ads
5. Websites
6. Social Media

 

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2014 that had expired at the end of 2013. Check the online supplement in February 2015 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2014 returns.

You may run advertisements in newspapers, on the radio or television, or in magazines or trade journals to sell your products or services. You can deduct these costs, as well as the costs of other promotional activities. At the same time, you will discover that some costs cannot be deducted or that certain costs need to be deducted as another type of business expense.

Ordinary Advertising Expenses

Like all other business expenses, advertising costs must be ordinary and necessary business expenses in order to be deductible. They must have a reasonable relationship to your business activities, and they must be reasonable in amount. However, there are no guidelines on what is “reasonable” in amount.

Deductible advertising expenses include the costs of:

• Business cards
• Ads in print or the media (such as newspaper or magazine advertisements, charitable organization publications, radio or television spots, or online and mobile messages)
• Ads in telephone directories (such as Yellow Pages listings)
• Package design costs that are part ...