As a small business owner, you are most likely going to incur some expenses related to the promotion of your business. Generally, most of the expenses you incur are deductible either as advertising expense or as some other expense. Some expenses are not deductible. In any case, the Internal Revenue Service requires that your expenses be ordinary and necessary to the operation of your business in order to be deductible.
There are typically three types of expenses that are considered advertising for tax purposes: ordinary advertising expenses, public relations expenses, and promotional activities.
Ordinary advertising expenses include a wide range of items including, but not limited to, business cards, print advertisements, radio or television advertisements, yellow page advertisements, Internet advertising and billboards. The cost of maintaining your website is most likely fully tax deductible but whether or not it falls under advertising expense for tax purposes will depend on your individual website. Some websites are designed to promote the business while others are essentially the operations of the business (for example, Amazon.com).
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