How Can I Maximize Advertising and Gift Deductions?

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Did you know that there are many tax deductions available that can help you save money? In this episode of the Small Business Tax Savings Podcast, Mike discusses maximizing advertising and gift deductions, which is part of a bigger series on business deductions and write-offs.

Mike talks about advertising expenses, these refer to costs associated with promoting a company or brand through media buys, social media, website creation, and influencer marketing, among others. The key is finding a business purpose for everyday spending to turn into pre-tax spending.

Mike explores the different ways to maximize tax deductions through charitable contributions, advertising expenses, and gift expenses. He delves into ways to categorize gifts as advertising expenses, such as placing logos on items or using them for training.

Tune in now and check out Mike’s guide for more in-depth information on maximizing deductions while growing your small business! 

[00:00] Maximizing Advertising And Gift Deductions For Small Business Owners

• Today’s episode is about Maximizing  Advertising and Gift Deductions
• Advertising expenses include promoting your business through various channels such as TV, Radio, Social Media, websites, etc.
• Gift expenses can be deductible if they are ordinary and necessary business expenses

[00:50] Planning Opportunities For Business Owners

• The goal is to turn after-tax spending into pre-tax spending by finding a business purpose for everyday spending
• Swag items with company logos are considered advertising expenses
• Advertising expenses include promoting the brand at conventions or through contests
• Planning opportunities exist to move spending from channels

[09:33] Turning Charitable Contributions Into Advertising Expenses

• Sponsoring a charity event or doing a charity drive can be considered an advertising expense if it leads to business growth
• Review-based donation system
• Planning opportunities for gift expenses include different categorizations and gifting to married couples or families
• Branding and logo can turn gifts into advertising expenses 

[14:17] Closing Segment

• Mike advises listeners that any items that cost $4 or less with your name on it are not considered gifts by the IRS  
• Final Words

Key Quotes

“With the Tax Cuts and Job Act, the new standard deduction is increased. So many people actually lose out on getting a tax advantage of giving to charity if their itemized deduction is lower than what the standard is. So, if you can find a way to tie this type of spending to advertising, you can take it as an advertising expense, which is going to be more beneficial to you than a charitable contribution.” – Mike Jesowshek

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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