Q: Can I count product samples or digital products I give away for review as an expense?
A: Yes. But there are some qualifying factors you’ll need to meet to do so.
1. If it relates to business you reasonably expect to gain in the future, you can usually deduct the cost of institutional or “good will” advertising that is meant to keep your name before the public.
If you gave away digital product so it could be reviewed and your product and/or name will be kept in front of potential customers, then you meet the requirement.
Examples of good will or institutional advertising include:
- advertisements that encourage people to contribute to charities, such as the Red Cross or similar causes
- having your own business sponsor a Little League baseball team, bowling team, or golf tournament
- giving away product samples
- holding contests and giving away prizes
2. The amount you expense has to be actual dollars. Time and labor that you give away as an advertising expense doesn’t count – so the time you spend reviewing other people’s product can’t be a deduction, nor can the time you spent in creating the digital product. Only the cost in dollars, or the price of the actual product, can be deducted.
Looking for more tax tips for bloggers? You’ve come to the right place. Check out our FREE Taxes & Accounting for Bloggers 101. You’ll find useful tips and ideas on making your blog finances a breeze. Still have questions or want to hire an expert? We can help with that too.
Check out our other Tax & Accounting FAQs for bloggers here:
What is the biggest tax mistake bloggers make?
How do I figure out if I deduct all or part of my new computer?
If I have an LLC, must I pay for all my business expenses with my business account?
Can I count digital products I give away for review as expenses?
What can I deduct for this blog conference? Are clothes deductible?
What is the best way to keep track of the little expenses that add up over the year?
What potential business expenses might I have as a blogger?
What do you suggest bloggers do when given free stuff as compensation?
What percentage of my work time do you recommend I spend on accounting?
