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J.K. Lasser's Small Business Taxes 2017 by Barbara Weltman

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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

You may run advertisements on websites, 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 printed or online telephone directories (such as YP listings)

  • Package design costs that are part of an advertising campaign

  • Billboards (rental fees are an advertising expense)

  • Signs with a useful life of not more than one year. (Signs expected to last longer than a year can be depreciated, as explained in Chapter 14.)

In the case of signs placed on the sides ...

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