Can You Write Off Business Signs and Vehicle Wraps on Your Taxes?
Your business made an investment in business signs and vehicle wraps this year. Now, you’re wondering if those are considered part of the building or vehicle as a depreciable asset or if you can write them off as a regular business expense. We’ve got good news: business signs and vehicle wraps are almost always deductible expenses! Read on to find out how to make sure you can write them off at the end of the year – and make the most of those deductions!
Business Signs and Vehicle Wraps as Business Expenses
Just like regular advertising expenses, business signs and vehicle wraps are eligible for miscellaneous expense tax deductions as long as they are “ordinary and reasonable”. Ensure that your business signs, graphics, and vehicle wraps are purchased and used for business purposes, and voila! You can include them as regular business expenses in one of two ways:
- Miscellaneous Advertising Expenses. Include vehicle wraps and advertising signs (like banners and other non-capital expense signage) with other advertising efforts. These might include newspaper or magazine ads, television commercials, outdoor advertising, and other regular advertising expenses.
- Regular Office Expenses or Non-Capital Equipment. Include business signs for the interior of your building – like those meant to guide customers through your space or communicate to your team – with other office expenses. These might include whiteboards, paper, markers, pens, and other regular office expenses.
Ordinary and Reasonable?
The IRS uses the terms “ordinary and reasonable expenses” or “ordinary and necessary expenses” almost interchangeably. These terms mean that expenses are allowed (and generally deductible) if they are undertaken as a regular part of a business’s operations and/or if they are considered regular or ordinary expenses for a business’s industry. Because advertising one’s business is common practice across industries, business signs and vehicle wraps are almost always tax-deductible.
Make sure these expenses are directly related to your business! Wrapping a personal vehicle not used for business purposes or creating signs and banners for your personal use – or buying signs to support your favorite sports team or political candidate – doesn’t qualify as a business expense.
But just because the IRS uses the “ordinary and reasonable” or “ordinary and necessary” tests for tax deductions doesn’t mean you have to create boring graphics for business signs and vehicle wraps! Our team at Pinnacle Signs and Graphics can help you create the perfect designs to turn heads and catch customers’ attention!
Other Benefits of Business Signs and Vehicle Wraps
Tax deductions aren’t the only benefits to business signs and vehicle wraps! Certain expenses in these categories sometimes qualify for special small business grant and loan programs.
If, for example, you invested in wayfinding signs or other notification signs to inform your customers of special rules or safety precautions during the novel coronavirus health and economic crisis, those expenses have been approved for reimbursement through special grant programs across the country. Similarly, if you invested in vinyl wraps or decals for delivery vehicles during the same period, those expenses may qualify, too!
Keep Your Receipts!
Small business owners know the importance of keeping detailed expense documentation – even if it’s sometimes an imperfect practice! Make sure you get an itemized receipt or invoice for your business signs and vehicle wraps and keep them readily available. That way, they’re ready for tax time or for unexpected small business reimbursement and aid programs through places like the Small Business Administration or state agencies.
Get More Info From Your Tax Professional – Get Great Business Signs and Vehicle Wraps from Pinnacle Signs and Graphics!
We’re not tax professionals – we’re just small business owners like you, working hard to stretch every dollar to serve our customers. At Pinnacle Signs and Graphics, we provide excellent service from start to finish. We can help you design head-turning, eye-catching business signs and vehicle wraps. Our team takes pride in quality products and professional installation. Contact us today to learn how business signs and vehicle wraps can drive traffic to your business!