So, you know all those restaurant marketing expenses you put towards keeping your seats filled and your tables turning? Things like ads, events, and social media posts? Well, we’ve got some good news for you! You can usually deduct those bad boys from your business taxes!
That’s because the IRS considers marketing expenses to be “ordinary and necessary” for businesses to bring in more moolah.
The IRS defines ordinary expenses as common and accepted in the business industry, while necessary expenses are those that are helpful and appropriate for the business’s operations.
Today we’re digging into some of the most common marketing and advertising expenses you can potentially write off (as well as a few – let’s just say creative ones – that might just surprise you!
Before we dive any deeper into the world of tax deductions for your restaurant’s marketing expenses, we need to set some ground rules. First things first, we here at MenuLabs are not tax professionals. We’re just your friendly neighborhood restaurant growth partner, here to help you out.
While we’d love to give you all the answers, it’s important to remember that everyone’s tax situation is different. So, before you start writing off every expense as a “marketing expense,” we highly recommend that you consult with your favorite tax pro.
Not only will they have the most up-to-date information, but they’ll also be able to give you personalized advice that’s tailored to your specific situation. Trust me, it’s better to be safe than sorry when it comes to taxes.
Can I seriously write off marketing expenses?
Yes, you seriously can. And it can make a BIG difference in your tax liability when it’s time to pay up. Deducting marketing expenses on your business’ tax return has been a thing for a good while now – we’re talking several decades.
But, as always, tax laws are constantly changing and evolving. In 2017, the Tax Cuts and Jobs Act (TCJA) came in and made some big changes to how you can deduct certain expenses, including all those marketing expenses.
One of the most significant changes was the elimination of the deduction for entertainment expenses, which included expenses for activities like sporting events and concerts that were previously deductible up to 50%.
Bummer, right? Additionally, the TCJA modified the rules for deducting meals provided to employees, customers, and clients.
Prior to the TCJA, businesses could deduct 50% of the cost of meals provided for the convenience of the employer. Under the TCJA, this deduction was expanded to include meals provided to employees for the employer’s convenience as well as meals provided for the employer’s business needs. However, the deduction was reduced to 50% of the cost of the meal.
Finally, the TCJA also introduced a new limitation on the deduction for business interest expenses, which could potentially impact the amount of deductions a business could take for their marketing expenses.
Overall, while the TCJA did not make any significant changes to the ability to deduct marketing expenses directly, it did impact some of the rules around related expenses like entertainment and meals. So, while you’ve been able to deduct these expenses for a while, it’s important to stay in the loop with any new tax law changes that might impact your ability to take deductions on your marketing expenses. Trust me, you don’t want to mess around with the IRS.
50 Marketing Expenses to Deduct from Your Restaurant’s Taxes in 2023
The list of marketing expenses you might be able to deduct from your taxes will vary depending on your unique situation. Still, here are 50 of the top marketing expenses restaurants may be able to deduct this year.
- Advertising costs, such as online ads, print ads, and billboards.
- Costs associated with social media, such as paid social media ads and promotions.
- Costs associated with creating and distributing promotional materials, such as menus, flyers, and brochures.
- Costs associated with hosting events to promote the restaurant, such as tastings and cooking classes
- Restaurant website development and maintenance costs, such as hosting fees and content creation costs.
- Costs associated with public relations, such as hiring a PR firm or sending out press releases.
- Fees associated with hiring a marketing consultant or agency.
- Photography costs for marketing materials.
- Costs associated with creating and distributing email newsletters and other promotional emails.
- Costs associated with creating and distributing direct mail campaigns.
- Costs associated with sponsoring local events or sports teams.
- Promotional items and merchandise costs, such as t-shirts, hats, and branded items.
- Costs associated with developing and executing loyalty programs and referral campaigns.
- Costs associated with creating and managing online review platforms, such as Yelp and TripAdvisor.
- Fees associated with hiring a digital marketing agency for SEO or PPC.
- Costs associated with creating and running radio or TV commercials.
- Costs associated with conducting market research or customer surveys.
- Costs associated with creating and distributing gift cards or certificates.
- Costs associated with creating and distributing press releases or media kits.
- Costs associated with creating and managing a mobile app for the restaurant.
- Costs associated with creating and running digital display ads on websites or mobile apps.
- Costs associated with creating and distributing promotional videos, such as on YouTube or Vimeo.
- Fees associated with hiring a social media manager or agency to manage your social media accounts.
- Costs associated with creating and distributing newsletters, magazines, or other print publications.
- Costs associated with sponsoring or hosting food competitions or festivals.
- Costs associated with creating and running a podcast or web series.
- Fees associated with hiring a public speaking coach or training to improve your presentation skills.
- Costs associated with creating and distributing surveys to your customers to gather feedback.
- Costs associated with creating and distributing print or digital coupons.
- Costs associated with creating and running a blog on your restaurant’s website.
- Costs associated with creating and running influencer marketing campaigns on social media platforms like Instagram and TikTok.
- Fees associated with hiring a branding or design agency to create your restaurant’s logo or branding materials.
- Costs associated with creating and distributing customer reviews and testimonials on your website or social media.
- Fees associated with hiring a copywriter to create compelling copy for your website or advertising materials.
- Costs associated with creating and running a virtual event or webinar to promote your restaurant.
- Costs associated with creating and running a referral program or customer loyalty program.
- Fees associated with hiring a marketing automation platform or CRM to manage your marketing campaigns and customer data.
- Costs associated with creating and managing an online menu for your restaurant
- Fees associated with hiring a marketing coach or consultant to help guide your marketing strategy.
- Fees associated with hiring a videographer or production company to create videos for social media, YouTube, or other platforms.
- Costs associated with creating and running a podcast or web series to promote your restaurant.
- Costs associated with creating and printing custom merchandise such as t-shirts, hats, or other branded items.
- Fees associated with hiring a graphic designer to create custom graphics or infographics for your website or social media.
- The cost of creating and hosting a “pop-up” dining experience to showcase your restaurant’s cuisine and atmosphere in a unique setting.
- Costs associated with creating and running a social media contest or giveaway.
- Costs associated with creating and operating a branded mobile app for your restaurant.
- Costs associated with creating and running an affiliate marketing program to promote your restaurant.
- Costs associated with creating and printing brochures or menus.
- Costs associated with sponsoring or hosting an industry conference or event.
- Fees associated with hiring a search engine optimization (SEO) specialist to improve your restaurant’s search engine rankings.
7 Really Weird Restaurant Marketing Expenses You Might Be Able to Deduct
Just because we want to make an otherwise stressful time of year just a little more fun, here are 7 really weird restaurant marketing expenses that you might be able to deduct.
Let’s be real, number 7 is a little out there.
- The cost of hiring a virtual reality or augmented reality developer to create a virtual dining experience for customers to promote your restaurant.
- The cost of hiring a mural artist to create a custom mural that promotes your restaurant’s brand or cuisine on an exterior wall.
- The cost of hiring a celebrity to make a guest appearance at your restaurant or to endorse your restaurant on social media.
- The cost of creating and printing custom temporary tattoos or stickers to promote your restaurant.
- The cost of hiring a handwriting expert to create a custom font for your restaurant’s branding and advertising materials.
- The cost of hiring a custom fragrance designer to create a signature scent for your restaurant that promotes a unique atmosphere and memorable experience for customers.
- The cost of hiring a psychic or astrologer to provide insights on which marketing strategies may be most effective for your restaurant.
Okay, so while we know someone who did number 7 – yes, really – you’ll definitely want to check with your tax pro first!
How to Write Off Restaurant Marketing Expenses on Your Taxes
If you want to write off your restaurant marketing expenses on your tax return, you need to keep good records of all the expenses you’re claiming as deductions. This means holding onto receipts, invoices, and bank statements that show what you spent, when you spent it, and why you spent it.
You also need to make sure that you can prove that the expense was related to promoting your business and making some dough – the proverbial kind.
Now, as we mentioned before, the IRS has some rules about what kind of expenses are allowed to be written off. They have to be “ordinary and necessary” expenses that are common and accepted in your business industry, and they have to be helpful and appropriate for your business operations.
But don’t sweat it too much! Just make sure you’re keeping good records and working with a tax professional to make sure you’re doing everything by the book.
Handle Tax Season Like a Boss
So there you have it, folks! You can actually write off a ton of your marketing expenses on your restaurant’s tax return.
From advertising costs and social media promotions to sponsoring events and creating loyalty programs, the possibilities are endless.
And while you might not think about it, there are even some weird and wacky restaurant marketing expenses you could potentially deduct.
Just remember, before you go wild with writing everything off, it’s always best to check with your trusty tax professional first. They’ll be able to help you navigate any tax law changes and make sure you’re doing everything by the book.
So keep those receipts and keep on promoting your restaurant like a boss!