In order to advance your own company as an entrepreneur, it is sometimes essential to make various investments. In some places, these can take on quite considerable proportions, which is why it has long been clear to the tax office that compensation must be created here in some way. In this context, as an entrepreneur, you can include the so-called income – related expenses in your annual tax return claim for tax purposes. After all, it is a question of expenses that are necessary in order to generate income. In this regard, the field of deductible items is quite broad and only very few see through the jungle of different expenses that they can claim. Typical examples here are business trips, work equipment, specialist literature or further training and further education.
What are advertising expenses?
Advertising costs do not necessarily have anything to do with classic advertising in the marketing sense. Rather, they are costs that all people who have a job have in some form.
This term summarizes all costs incurred for generating your income. Specifically, these can be very different costs. When looking for a job, be it the travel costs for traveling to an interview, costs for professional application photos or costs for further training.
What are the requirements for the deduction of advertising costs?
In order to be clear about the prerequisites for the tax deductibility of advertising costs, one must first realize once again that advertising costs and advertising costs are by no means the same. Business expenses are expenses that employees can claim in their tax return. In the case of self-employed people, one generally speaks of business expenses.
The item “advertising costs” (not to be confused with advertising costs) is only part of these operating expenses. In this case, as the name suggests, advertising costs relate to all expenses related to advertising for your own company. The prerequisites are already hidden in this sentence. In order to be able to claim advertising costs as a deductible item, basically two requirements must be observed. On the one hand, the advertising must of course be related to the company. On the other hand, the deduction is only possible if all invoices and receipts can be meticulously saved and presented. However, this affects all deductible expenses and should therefore be mandatory as a general rule.
Employees (including mini-jobbers) must include this information on their tax return in Appendix N (income from non-self-employed work). It is important to ensure that each spouse completes and submits their own Appendix N.
Advertising expenses for self-employed & small business owners
Since so-called advertising expenses are expenses from non-self-employed activity , this term has no relevance for self-employed and small business owners. However, most of the expenses that employees can claim as income-related expenses are also deductible for the self-employed. How does it work? Well, this seems a little confusing at first glance. If you take a closer look at the topic, you quickly realize that self-employed is just a different term.
The business expenses are to the self-employed what the employee has to pay for their income-related expenses . In terms of income from self-employed work, we do not speak of business expenses in the tax sense, but of business expenses . This basically includes all expenses that are necessary for the company. This can be personnel costs, but also expenses for insurance, materials, computers, telephones and the like.
Tax tips for self-employed & small business owners
There are many tax deductibility options, especially for entrepreneurs. In the following section we have listed the typical deductible items.
It is important to note what percentage of your own car is used for business purposes. If the occupational use of the car is over 90%, it is a piece of work equipment. This means that all expenses (depreciation, interest, fuel, insurance, etc.) are deductible as business expenses.
If you want to get a new car, leasing it is cheaper than buying it. Leasing results in a liquidity advantage, because special payments and monthly installments are deductible as business expenses. All vehicle costs such as gasoline, taxes, insurance and repairs are deductible. However, private trips are not recognized. Therefore, you have to keep an exact logbook . There are numerous logbook templates on the Internet that will make this work easier for you. If it can be proven that the operational use of the car is over 50%, one percent of the list price can be deducted monthly. It also plays a role here whether you have a private vehicle or a company car uses.
If you use domestic premises as the center of your professional activity, you can deduct the costs for it as business expenses or advertising expenses. For other employees, this is a limit of € 1,250. In addition to the room costs, you can also deduct expenses for furnishing and equipping your study .