Yes, you can potentially write off products you review if they are directly related to your business or income-generating activity, such as running a blog, YouTube channel, or a business centered around product reviews. However, this comes with a few important conditions and guidelines to follow.
When You Can Write Off Products You Review:
The key to deducting products you review lies in proving that the purchase of these items is a legitimate business expense and that they are used exclusively or primarily for business purposes.
Here’s when and how you can write off review products:
1. Business-Related Expenses:
If you buy a product solely to review it as part of your business operations (e.g., blogging, vlogging, or being a social media influencer), the cost of the product can be considered a business expense. For example:
- Tech Review Blog: If you buy a new smartphone or gadget specifically to review it on your tech blog or YouTube channel, the cost of the phone can be deductible as a business expense.
- Beauty/Fashion Review Channel: Purchasing makeup, clothing, or skincare items to review for your audience may also qualify as a deductible expense, as these purchases are necessary for the operation of your review business.
2. Product Giveaway or Disposal:
If after reviewing the product, you no longer use it personally (e.g., you give it away as part of a promotional campaign, donate it, or sell it), you can fully deduct it since it was not retained for personal use.
3. Home Office or Business Use:
If the product you review is later used in your business (such as a camera for your photography business or software for your design work), the cost may still be deductible. This falls under the category of business equipment.
When You Can’t Deduct Products:
Not every purchase you review can be written off. Here are the limitations:
1. Personal Use:
If you keep the product for personal enjoyment or use after reviewing it, you generally can’t deduct the full purchase price. The IRS may view this as a personal expense with no business benefit. For example:
- If you review a new gaming console and then use it personally, the IRS could disallow the deduction because the product served a personal, non-business purpose.
2. Partial Use:
If the product is used for both personal and business reasons, only the portion of time the product is used for business can be deducted. For example:
- If you review a laptop but then use it 50% for personal tasks and 50% for your business, you could potentially deduct 50% of the cost.
Documentation is Crucial:
To justify these deductions, you must maintain detailed records of:
- Why the product was purchased (document that it was intended for review or business purposes).
- How it was used (for example, screenshots or links to the review post, or receipts from giveaways or donations).
- Receipts and Invoices to back up the expense.
How to Deduct Product Review Expenses:
- Schedule C (Form 1040): If you’re self-employed (as a freelancer or sole proprietor), you would report the cost of products purchased for review as a business expense on Schedule C (Profit or Loss From Business).
- Depreciation: For high-ticket items, such as electronics or equipment that you continue to use in your business after the review, you may need to depreciate the cost over time rather than deduct it all at once.
Summary Table
| Scenario | Deductible? |
|---|---|
| Purchased solely to review, then discarded | Yes – Fully deductible |
| Purchased for review and used for business | Yes – Deductible as business equipment |
| Purchased for review and used personally | No – Not deductible |
| Mixed business and personal use | Partially deductible, based on % of business use |
| Giveaway or promotional item after review | Yes – Fully deductible (depending on promotional use) |
Final Tip:
Be clear about your business purpose, keep meticulous records, and document everything, especially when reviewing higher-priced items or mixing personal and business use. This will help ensure your deductions are valid and protect you if the IRS ever asks for proof.