Marketing Costs: Small Business Tax Deductions

Here’s everything you need to know about marketing costs and small business tax deductions:

How Much Should You Budget for Marketing

The amount of money you should budget for marketing will depend on the size and type of business you own. Experts recommend that small businesses should budget between 5-10% of their gross revenue for marketing expenses. This amount should include the cost of advertising, website creation and maintenance, lead generation, and any other marketing-related costs. This can help ensure that your marketing efforts are successful. It’s also important to consider the average cost-per-click (CPC) of each platform you choose to advertise on, as well as the return on investment (ROI). This will help you determine whether the money you’re spending on marketing is worth it.

What Are Some Common Marketing Expenses?

The cost of marketing can vary greatly. This depends on what type of marketing you do. Common marketing expenses may include:

Website design
Website hosting
Search engine optimization (SEO) services
Paid advertising
Website maintenance
Printing, graphic design, email marketing and more…

You may also incur costs related to your business’s presence on social media. It is wise to keep a detailed log of all your marketing expenses to help you stay on top of your budget.

Make sure to include every cost associated with marketing, including the cost of employees and contractors, software subscriptions, events, webinars, and any other expenses incurred for marketing purposes.

Taking the time to track all marketing expenses will help you better understand where your money is going and make it easier to accurately forecast your costs in the future

Common Small Business Tax Deductions

If you’re a small business owner in the United States, you may be eligible to take advantage of certain small business tax deductions. These deductions are added to your taxable income and help offset the cost of marketing your business. One of the most common deductions is the self-employed health insurance deduction. If you are self-employed, you can deduct 100% of the cost of your health insurance premiums from your taxes.

You can also deduct marketing expenses such as

Advertising
Website design and hosting
Website maintenance
Equipment purchases
Travel expenses
Office supplies, and subscriptions to business services such as website monitoring.
Employees-If you hire employees, you can deduct a portion of their wages, as well as the cost of health insurance premiums, meal allowances, and other benefits.

Having a thorough understanding of your marketing costs and available small business tax deductions is important if you want to run a successful business. Knowing the average cost of services and platforms you use to advertise, and tracking all marketing-related expenses can help you create a budget you can stick to.

Closing Statement

Our Tax Professionals can assist you in taking advantage of available tax deductions that can help reduce your costs and make your advertising budget go further. Call us on (817) 238 0100 or taxprep@andreawardcpa.com to book your appointment today.

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Andrea Ward, CPA

Andrea officially began her accounting career in 1987. But it all began much earlier than that as a kid when she meticulously budgeted her allowance to buy really cool toys. Since then, she has earned Cum Laude honors with a Bachelor in Business Administration, with equivalent minors in Finance and Economics from Texas A&M University. A CPA and Registered Investment Advisor, Andrea loves helping people accumulate wealth.