online video course as advertising for self-employed life coach

[ddsobolev]

My wife is self-employed as the personal coach since very beginning of 2021.

In the second half of 2021 she started to scale her business by creating online video course using foreign contractor assistance (video recording, etc.)

Payment for video course is comparable to her total self-employment income for 2021.

Is it correct to claim video course payment as an advertising? 

We were also thinking to claim this expense as a startup cost.

But even though it looks like the startup cost for the expansion of her business, it's not the startup for the business as the whole. So what are the best practices for our case?

[LeonardS · Accepted solution]

No, the fee for creating the video recording, used for advertising, is not an advertising expense.  It would be more appropriate to report the expense as video production expenses on Schedule C Part V Other Expenses. This will provide detailed information about the expense if you are ever questioned on it by the IRS.

The video course expense is not a startup expense as it was incurred after the business was in operation.  Startup costs are the expenses incurred during the process of creating a new business.

[ddsobolev]

@LeonardS ,

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@LeonardS wrote:

No, the fee for creating the video recording, used for advertising, is not an advertising expense.  It would be more appropriate to report the expense as video production expenses on Schedule C Part V Other Expenses. This will provide detailed information about the expense if you are ever questioned on it by the IRS.

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Thank you for the answer.

But why isn't it advertising?

Even though the course is supposed to be paid via subscription, its other purpose was to engage clients for the personal sessions.

And this "Schedule C Part V Other Expenses" is called "Other miscellaneous expenses" in Turbotax UI, isn't it?

[LeonardS · Accepted solution]

My reply that it is not advertising was based on the fact that you paid a contractor for his services to develop your video.  You may report this expense as advertising if you want to rather than where I suggested.  The result will be the same, the cost will be deducted on Schedule C as an expense.  Either option is valid, one shows the expense as advertising while the other allows more detail as to what the advertising expense was. Yes, the full description for Part V is as you stated.