Here’s Everything You Need to Know About Marketing Tax Deductions

According to a recent study, the average American spends 6 hours and 42 minutes online. What does that mean to a business owner? It means if you want to find your ideal customer, chances are pretty good that you will find them through a screen. Digital marketing [done right] is the key to reaching your target audience when the moment is just right, but what about digital marketing costs?

Digital marketing will not only help you find your target market and get your message out quicker and more effectively, but come April 15th, you’ll be able to deduct the costs of your digital marketing expenses!! Anything from website fees to content writers to online ad placements all qualify as marketing tax deductions for your company. 

With that in mind, not all sales and marketing expenses can lower your tax obligation. Let us help you navigate how to turn your average marketing expense for your small business into a tax break that can help you save money!

In this age of technology, it has never been more vital to the success of a small business to use the internet to get your brand out there. It’s also crucial to create a plan for your marketing expenses when it comes to your business.

What is Considered 100% Tax-deductible?

According to the IRS, in order to qualify as an advertising expense tax deduction, the expense must be “ordinary and necessary,” a term that certainly applies to digital marketing as well. An expense is considered “ordinary” if it’s a common and accepted practice for advertising, and it is “necessary” if it’s vital to the success of your business. 

With our changing times come changes in how businesses reach their audience. Digital marketing creates engagement between your business and your audience in ways traditional marketing doesn’t. You can create an immersive experience for your audience that makes them feel engaged with the product and with other consumers. 

Therefore, as an example, a website for your business would be considered “ordinary” in that most companies, no matter the size, have a web presence, and a website would also be necessary in order to compete with other businesses.

Because of this, your website (and the software, training, and licenses you buy for it) would count as an advertising tax deduction for your small business, making digital marketing an investment that will pay off instead of a money-eating expense.

Common Digital Marketing Expenses to use for Tax Deductions

  • Website Costs and Fees

    While a website is crucial to getting your name and message out to a modern audience, the expenses of software and website hosting can add up. Deducting them on your tax returns is 100% allowable.

  • Content Creation & Digital Marketing Services

    Many business owners choose to outsource some of the work that comes with establishing a digital media presence for their company. Hiring digital marketing agencies, web designers, content writers, developers, and marketers not only saves time for the company, but it provides another tax deduction. And, if you hire the right marketing agency to manage your entire marketing strategy, content marketing, pay per click campaigns and organic search for instance, you should count on more profits for your bottom line. I mean, that’s what they’re there for, to ensure you get results, save you time and help your business thrive!

  • Social Media Subscriptions and Memberships

    Social media has changed the way the average consumer interacts with products, services, and other consumers. Subscriptions to tools like social media dashboards will help you stay organized as you Instagram, Facebook, Tweet, or all of the above. Springing for that premium membership on social media platforms like LinkedIn, which come with more exposure for your business might also be a wise investment. Also, don’t forget about the outside people you hire to manage your social media marketing. Their monthly retainers are likely to be tax deductible as well!

  • Continuing Education and Training

    In the immortal words of Ferris Bueller, life moves pretty fast. But nothing moves faster in this day and age than technology. Changing software and programs means more efficiency for your company, but it also means needing additional training and education for your team to know how to use these technologies to the max. Luckily, these expenses can also be written off come tax time.

In Conclusion…

While certain advertising and marketing expenses such as roadside billboards and television ads are tax-deductible, don’t forget about looking at some of the ways you can use digital marketing activities to grow your company. You can start deducting advertising expenses that are done online too! 

You can start saving on tax obligations and grow your company at the same time if you know how to create and carry out an effective digital marketing plan. Not sure where to start with this? AE Design Co. makes it easy for our clients to create a plan for success. We offer a variety of marketing services from helping build your marketing infrastructure to managing your digital marketing campaigns for a higher ROI.

Schedule a free, no-obligation consultation today to learn how our proven 3-step Marketing Success Framework will yield more return on your marketing investment!  It’s never been more vital to have an effective marketing plan so you can be sure you’re getting the most juice out of the squeeze!

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Did You Know Digital Marketing Costs are 100% Tax-Deductible?
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Did You Know Digital Marketing Costs are 100% Tax-Deductible?
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Save on digital marketing costs while you invest in the growth of your business. Learn how to save some $$$ with theses marketing tax deductions.
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AE Design Co.
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About April Edwards

Hello! I'm AE Design Co's lead Digital Strategist & Creative Director. For over 15 years, I've been helping busy businesses get a grip on their marketing to increase profits year-over-year.

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