Is business promotion a legitimate business tax deduction?

Question: Is business promotion a legitimate business tax deduction?

Answer:

Yes, business promotion activites are legitimate tax deductions. You can deduct the cost of flyers and brochures, for example. When you're calculating your business promotion tax deductions, though, there are two caveats to bear in mind.

First, when it comes to advertising as a business promotion activity, not all advertising will qualify as a business tax deduction. Only the cost of advertising in Canadian newspapers and on Canadian television, radio stations and web sites can be deducted. (See this page of More Ways To Maximize Your Business Income Tax Deductions for more information on advertising as a tax deduction.)

Second, not all business promotion activities are created equal when it comes to tax deductions. You can only deduct half of the cost of promotion activities that involve meals and entertainment, such as entertaining prospective clients at business lunches. (For more on entertainment expenses as business tax deductions, see 5 Common Business Tax Myths.)

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