Under tax law, businesses can generally deduct advertising and marketing expenses that help keep existing customers and bring in new ones. This valuable tax deduction can help businesses cut their taxes. However, in order to be deductible, advertising and marketing expenses must be “ordinary and necessary.” As one taxpayer recently learned in U.S. Tax Court, not all expenses are eligible. An ordinary expense is one that’s common and accepted in the industry. And a necessary expense is one that’s helpful and appropriate for the business. According to the IRS, here are some advertising expenses that are usually deductible: Reasonable advertising expenses that are directly related to the business activities. An expense for the cost of institutional or goodwill advertising to keep the business name before the public...
