US Taxes: Does Money Paid Toward Advertising Reduce Taxable Income 1:1?

As I sit here spending more and more on Adwords, I wonder...

Using easy numbers, let's say my business made $100,000 last year. If I spent $10,000 on Advertising, is my taxable income now $90,000?

 

That is correct. You pay taxes on what your total is after all business expenses, you of course need to check with an accountant first to see what you can write off as a business expense.

 

yes.

and don't forget any interest or other fees on the card.

 

You are taxed on profit:

Profit = Revenue - Cost

Capture all costs and include that in your income from business calculation.

 

Don't forget webhosting fees, domain name registration fees, etc. It is all deductible as long as it is a cost of running your business.