AdWords - Tax deductible?

Using Adwords for aff marketing, claim as expense?

[madmatt69]

Hi everyone,

I'm just wondering - Can I claim the money I spend on Adwords as an advertising expense (in Canada)?

I use adwords for mostly affiliate marketing though, so I'm not sure if that makes a difference.

Thanks for any info!

[vanderbolt]

I am a canadian affiliate marketer and do deduct any marketing expenses that generate revenue, including Adword. Happy New Year

[JayC]

Sure. As long as you're reporting the income, you can claim any expenses you incurred in creating it.

[madmatt69]

Right on : )That's what I figured.

How much of a percent can you claim on that? I'm totally new to this.

Thanks guys

[FromRocky]

Sure, you can treat it as a small business and claim all adwords expenses and others (bank fee, portion of your computer cost, server fee...) against all revenues generated from it as a loss or a gain. This gain (or loss) can be added to (or deducted from)your total income for the year.

[rogerd]

In the US, you can generally deduct all expenses - there aren't percentage limits (again, speaking in general). If you deduct so much that you create losses year after year, though, the IRS may say you have a hobby rather than a business and disallow your claimed losses. There's judgment involved in this - if you are making a serious attempt to be profitable, they will let losses continue without reclassifying your business.

[buckworks]

Adwords expenses, other PPC costs, paid directory listings, private ad deals, offline advertising ... all are expenses that can be claimed against the income that results from your activity.

You can also deduct a portion of your computer costs (both hardware and software), office supplies, reference books, possibly even a deduction for home office expenses, depending on how your home is set up and how many hours you work.

Most important advice: Keep a good paper trail and DOCUMENT EVERYTHING. To claim a deduction you must be able to prove that you incurred the expense. Even if you're the type who shoves all your papers into a drawer for your accountant to sort out later, be sure to save every single receipt and invoice!

Someone I know who used to work for Revenue Canada said that more expenses are disallowed because they aren't adequately documented than because there's actually a problem with the item being claimed as an expense.

[madmatt69]

That's good to know...To be honest I'm terrible at keeping track of things :) I'm getting better though.

Thanks guys!