J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line

Social Media

Increasingly, small businesses are relying on social media, such as LinkedIn, Facebook, and Twitter, to market their products and services. Many are using blogs and e-newsletters to reach customers and prospects. Much of social media is free (other than the cost of your own or your staff’s time spent working on these sites). However, some social media-related services can cost money, and they are fully tax deductible. Examples:

• E-mail distribution costs (such as Constant Contact)
• Google Adwords
• LinkedIn Pro, which is a premium service
• Paid blogging platforms (such as Typepad monthly charges or Blogspot add-ons)
• Surveys (using sites such as Survey Money or Constant Contact)

Note: Deducting the cost of software related to social media, such as offline blogging software, may not necessarily be fully deductible in the year you buy it. How to deduct the cost of software is discussed in Chapter 14.

Where to Deduct Expenses

Employees

An employee generally will not have any advertising expenses. He or she is only in the business of being an employee and need not promote that activity. When an employee takes out an ad in a newspaper or trade journal expressing availability for a new position, this expense may be deductible as a job-hunting expense, which is treated as a miscellaneous itemized deduction subject to the 2%, of AGI rule explained in Chapter 1.

Self-Employed

Advertising costs are deductible on Schedule C. There is a specific line for this type of expense. ...