Can complimentary or promotional services be deducted as marketing expenses?
I own a fairly large dog training school that offers dog daycare, grooming, boarding, etc. We offer a complimentary visit to each new client as a type of promotional or marketing tactic. We also give away complimentary baths, nail trims, groomings, etc from time to time to our clients.
So here’s my question; can these complimentary first time visits be considered marketing expenses? And can the other complimentary services be considered gifts?
Thanks in advance for your help!
Hi Ashley, yes the complimentary first time visits can be considered marketing expenses. In addition, the free services that you provide can be considered gifts. However, there is a limit of $25.00 per client that the IRS allows for these type of write-offs. You can find more info on what is deductible for tax purposes in IRS Pub 463, here is the link: https://www.irs.gov/pub/irs-pdf/p463.pdf.
Thanks so much for reading!