Business Tax Question

[elitebiz]

I am going to be doing a promotion which will cost around $1500. I estimate that I will make $3000 back from this promotion. However, here is my problem. Even if I make $3000, won't I really only be breaking even? I will be paying taxes soon and isn't that essentially like taking that $3000 and then cutting it in half to $1500 again? Is there any way I can use the $1500 (its for rental space) as a write off on my taxes?

[vangogh]

You should be able to deduct what you spend on the advertising for your earnings for the year. So you'd only be paying taxes on the $1500 above the $1500 you spent and not the full $3000. The money you spend is a business expense and you should be deducting that from Profit.

I'm not sure how you fill out taxes, but the 1040 schedule C is a net profit or loss form. The very first expense listed is advertising. I would think you fill in $1500 right there, which ultimately reduces what profit and income you show.

[nealrm]

as vangogh stated you can deduct advertising. Your accountant can give you more details. Or if you use a tax program, it should prompt you directly for advertising expenses.

[Business Attorney]

Yes, expenses which are incurred to produce income are generally deductible. Advertising certainly falls in that category.

[Evan]

Who owns the rental? You personally (or a disregarded single-member LLC)? If so, rentals would flow through onto Schedule E. More often than not, rentals create losses.

Though I have a feeling you are not talking about rental property in the same context I am. But if you are, perhaps this information will provide you good use.