The NFIB Small Business Economic Trends December 2014 (PDF) shows that business optimism reached the highest level since 2007. And that many business owners expect to expand and anticipate increased revenues.
To do this, it goes without saying (but I’ll say it anyway) that you need to retain existing customers and bring in new ones. If you’re working on this challenge, the tax law can help defray some of your costs.
1. Deduct the Cost of Email Marketing Campaigns
Ask yourself how many posts do you read each day on Twitter or other social media sites versus how many of your emails you read? If you’re like me, you read some postings (there are just too many to read them all). But you read 100% of non-junk email.
So concentrating on email marketing makes sense. If you use paid email campaigns to send communications to your prospect/customer list, the cost is modest and you can deduct all of it. There’s no dollar limit on this write-off.
2. Deduct the Cost of Wining and Dining
One of the most common business expenses is entertainment. While technology helps us stay connected virtually, there’s no substitute for “pressing the flesh.” Meeting a prospect or customer for breakfast or lunch, taking the person out to dinner, or just getting together for coffee is tax deductible as long as it’s a legitimate business meeting.
You must keep specific records of the meeting (when, where, with whom, and what you talked about). However, even if you do all this, you can only deduct 50% of the bill, including tips.
3. Claim a Tax Credit for Making Your Facilities More Friendly to the Disabled
The U.S. Census Bureau reports that nearly one in five individuals in the U.S. has a disability. To be able to tap into this vast pool of customers, your facilities must be disability-friendly. In addition to this common sense reason for becoming disability-friendly, the Americans With Disabilities Act may require you to take action to comply with the law and avoid penalties.
As a small business, you can take a federal income tax credit of up to $5,000 annually (50% of costs between $250 and $10,250) to improve your facilities or make other improvements that make your business more accessible to the disabled. Find more here. (New instructions aren’t available but the rules haven’t changed for 2015.)
4. Deduct Your Goodwill Advertising
Your business may not have the big bucks to advertise in print or traditional media. But there are many ways to keep your name before the public and garner goodwill.
Sponsoring a Little League team, participating in a local charity event, and doing giveaways are some strategies for promoting your business to attract new customers. Your efforts are deductible as advertising costs. There’s no limit on this deduction or a charitable contribution. There’s no deduction for the value of your time and effort. But you can write off donations of cash, inventory, etc. within limits, depending on the nature of your activities.
5. Write Off Networking Costs
One of the most effective marketing activities for small businesses is networking – in person or online. Networking enables you to build relationships that eventually lead to referrals of new customers.
The costs of networking activities are deductible. For example, membership fees for joining your local chamber of commerce or service organization (e.g., Rotary, Lions, Kiwanis) are fully deductible.
No business can afford to take customers for granted. All must continually cater to existing customers and court new ones. Use tax incentives and breaks to help underwrite the cost of your efforts.
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