Prepaying Your Marketing Expenses Just Might Reduce Your Next Tax Bill

By Stewart Gandolf
Chief Executive Officer

1040 tax form surrounded by a calculator, pen and glasses

Every December, we like to remind our clients and readers of a simple way to save taxes in the current tax year, while investing in their business’s growth for the subsequent year. If your business pays taxes on a cash basis, it is likely you could reduce your tax bill(s) by prepaying marketing (and other) expenses. (Please see a CPA or attorney for specific tax advice.)

Take a look at your marketing plan for specific items you could prepay to reduce your next tax bill. Some marketing investments (expenses) might include:

Since media rates often rise over time, it is often especially beneficial to negotiate and pay for media well in advance. Remember, this tax-saving idea only works if you file your taxes on a cash basis. If you file under the accrual method, it will not work for you. Also, make sure you are only prepaying expenses on items you need. It makes zero sense to spend $1,000 meaninglessly to save $300 in taxes.

Remember, there are exceptions to every rule. We are not offering tax or legal advice here. So please consult with your tax attorney or CPA. As a famous person once observed, “I am proud to be paying taxes in the United States. The only thing is I could be just as proud for half of the money.” Let’s legally pay less in current-year taxes when we can.

Stewart Gandolf
Chief Executive Officer at Healthcare Success
Stewart Gandolf, MBA, is Chief Executive Officer of Healthcare Success, one of the nation's leading healthcare and digital marketing agencies. Over the past 20 years, Stewart has marketed and consulted for over 1,000 healthcare clients, ranging from practices and hospitals to multi-billion dollar corporations. A frequent speaker, Stewart has shared his expertise at over 200 venues nationwide. As an author and expert resource, Stewart has also written for many leading industry publications, including the 21,000 subscriber Healthcare Success Insight blog. Stewart also co-authored, "Cash-Pay Healthcare: Start, Grow & Perfect Your Cash-Pay Healthcare Business." Stewart began his career with leading advertising agencies, including J. Walter Thompson, where he marketed Fortune 500 clients such as Wells Fargo and Bally's Total Fitness.



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