Small Businesses and Digital Marketing Tax Deductions: What You Need to Know

Published On: March 22nd, 2021Categories: UncategorizedBy


As a small business owner, you are likely familiar with tax deductions like mileage and business supplies, but did you know that there are essential digital marketing expenses that qualify too?

Marketing your brand online is critical for your success, and we know that having a great website, a strong social media presence, and investing in continuing education can get expensive. It’s important to understand what your options are when it comes to your taxes.

Keep reading for all the expenses you can use for tax deductions.


1. Website costs and fees 

Yes, your website expenses are deductible on your tax return! Having a functioning website where you are consistently driving traffic from social media, email campaigns, etc., is crucial to getting new business opportunities. Be sure to deduct your domain registration and hosting fees, as well as the costs associated with design, development, and maintenance.

2. Paid ad placements

Ads run through Google or social media platforms like Facebook and Instagram are tax-deductible, as they are costs associated with growing a business. Keep this in mind next time you are planning a campaign across channels!

3. Content development and outsourced services 

Handling every aspect of digital marketing alone is challenging, which is why we exist! Many small business owners choose to hire outside professionals to own their marketing efforts, which saves time but also costs a lot of money. The good news? Hiring agencies, web developers, content writers, and social media managers gives you another tax deduction.

4. Tools

No digital marketing plan is complete without a suite of tools that help get the job done. From social media management tools to CRM software to analytics programs, there are subscription costs that add up quickly. These costs are luckily considered a necessary business expense!

5. Training and education 

Learning new skills in the digital marketing space is vital in order to stay relevant and to be able to keep up with your competitors. Technology is constantly changing and so are online trends –  your business needs to stay on top of each and every update to stay on top of your game. The costs of attending conferences and taking online courses qualify as deductible expenses and even include entry fees and travel expenses.

Overall, it is important to be mindful of your deductions. The IRS has an automated system that checks your expense category to sales ratios, so you don’t want to be too high or too low in a given category. We recommend writing down a full list of your potential deductions and working with a tax professional to ensure that you have included the right items.

Looking for assistance with your digital marketing efforts? Call, DM, or email us at to get started. We would love to help you create a successful online strategy!


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