TAXES - Questions about deductions/promotional items

[scribbleprints]

For tax purposes, I know advertising counts as business expenses, and that giveaways can count as advertising.

Tell me if this is right...

Things you bought specifically for advertising, like business cards and flyers, are counted as business explence in the year you bought them (since they can't be used for anything else).

If you giveaway items that you sell you should count them as business expenses only in the year you give them away, since you could do other things with them (sell them or use them yourself). You can also count shipping expenses on the giveaways, right?

Is that right?

Thanks!

'Gale

[jiminic2]

Giveaways are usually considered either samples or advertising. After all, you're giving items away in an attempt to sell items. Shipping on giveaways is a deductible business expense. The amount of your giveaways is your cost, not what you would have sold it for. And yes, they're deductible in the year you give them away. If you're keeping inventory, then you have to reduce your inventory by the amount you give away in the year you give it away, even though you bought it in a prior year.

[scribbleprints]

Thanks! That was really helpful!

[valg]

I believe they could also be counted as a charitable contribution, especially say if you give an item for a raffle to a non-profit organization.

[jiminic2]

And the great thing is that all these costs are tax deductible, as are any ebooks or articles you purchase to resell. You must keep track of all these expenses, but it's worth the effort.