When tax time arrives, there are a range of avenues to explore when claiming business expenses.
Since, the marketing budget for any company is part of necessary operating expenses, it should definitely be included when making tax claims.
Whether your company has invested in something as simple as a new set of business cards or something as far-reaching and effective as a brand new SEO optimised website, those costs can certainly be claimed as business expenses. Keep in mind that sole trader tax-deductible expenses work in the same way as those of businesses.
So here’s how to claim back on your marketing budget.*
Keep clear records of all marketing expenses.
Any operating expenses you plan to claim on must be carefully recorded and filed away for safe keeping.
Try to include the following in your records:
- What the expense was for
- How much it cost (as well as GST)
- When the purchase was made
- Any receipts or invoices connected to the expense
- Bank or credit card statements to show payment
You will need to hold these records for five years, and it’s best to back up your records in a secure location, such as on the Cloud or a hard drive held off-site.
Know what you can claim as a marketing expense.
The Australian Tax Office (ATO) includes a huge range of business expenses as eligible costs for reducing overall income.
However, it’s vital to know what counts as a legitimate marketing expense to ensure you’re minimising your tax bill, while not cheating the system by claiming for expenses that don’t count.
For example, marketing expenses and advertising costs can include:
- Social media costs (such as Twitter and Facebook paid campaigns)
- Paying for a marketing consultant
- Investing in organic search strategies – Search Engine Optimisation – and paid search campaigns – Search Engine Marketing
- Newspaper, television, magazine, and radio ads (both creation and placement)
- Digital display advertising
- Website maintenance fees
Work-related car expenses.
One common mistake to look out for is that of signage on a car. While you can claim the cost of having the signage made and applied to your vehicle – even though your car is acting like a mini billboard as you drive around town – you cannot claim the cost of the vehicle itself, or running fees, as a marketing cost. Note that company vehicle expenses may fall under other expenses – be sure to speak to your accountant to determine what and how much you can claim.
How to claim marketing expenses as deductibles.
First up, gather your paperwork so you have a list of all your marketing expenses for the past tax year.
If you have a certified accountant managing your tax returns, you should simply be able to hand over these documents and let them do the rest (and don’t forget that you can also claim their fees as the cost of managing tax affairs).
If you’re a sole trader you can lodge your tax with the ATO’s myTax online portal, which is the same route for individual tax lodging.
Remember, the very reason marketing expenses are eligible for tax deductions is because these costs are associated with growing your business. So if you’re already working with Yellow to boost your business online, don’t forget to include this detail in your tax return. Or if you’re thinking about getting some expert digital marketing help from our team, the fact that it’s tax deductible is another reason to test the waters!
*We endeavour to provide accurate material for Australian businesses consistent with Australian laws; however, this material is for reference only and is not designed to be, nor should it be regarded as professional advice.