Marketing income classification
Digital marketing services — SEO, PPC management, social media marketing, email marketing — are uniformly classified as service income. The work is performed where you sit, regardless of where the ads run or where the client's customers are located.
Ad spend pass-through
A critical accounting issue: if clients give you money to spend on ads (Google Ads, Meta Ads), that ad spend is NOT your income. Only your management fee is income. Keep ad spend in a separate account or use the client's ad accounts directly to avoid inflating your taxable revenue.
Performance-based compensation
Revenue share, commission-based, or performance bonus arrangements are common in marketing. These are still service income but may be earned over time. Recognize income when earned (or received, depending on your accounting method), not when the campaign runs.
Affiliate and referral income
If you also earn affiliate commissions from tools you recommend to clients, this is separate income that may originate from different countries. Amazon Associates, software affiliate programs, and referral fees each have their own withholding rules.
Marketing-specific deductions
Deduct: SEO tools (Ahrefs, SEMrush, Moz), social media management tools, email marketing platforms, analytics tools, ad accounts for testing, training and certifications, and industry conference attendance.