So, you decided to become a blogger, and tax season rolls around–now what??
Well, first of all, there is no need to stress. You just need to know a few things…
I have been blogging for several years, and have learned quite a bit about taxes and the business aspect of blogging. I have attended blog sessions about this topic; researched, and researched some more! However, I am not a tax “expert”. So, always make sure that you confer with a tax professional before officially filing. They may be able to help you make more deductions, remind you of expenses, let you know about new laws, help you with any state laws, or things not mentioned in this article.
If you’re a blogger, you are considered “self employed,” and if you are making money with your blog, then you need to file your taxes. You also need to make sure that you claim everything–including gifts, freebies, samples, items to review, etc. If you do not, and the IRS gets wind of it, you will only be causing yourself more stress and possible fines.
Another thing to keep in mind, just because a company does not send you a 1099, does not mean you do not have to claim them. Depending on how your business is filed, the company you worked with, and how much you made from said company–they may not send them to you, but you can be certain they will tell the IRS.
For your own protection and business integrity: It is ALWAYS best to be honest and up front about all income–whether monetary or not.
I would also recommend that you consider (if you have not already) creating an LLC for your blogging business, and look into getting business insurance as well, to protect your personal assets. Legalzoom is a very easy and inexpensive place to get yourself set up with an LLC!
Being a blogger is awesome and fun. However, there are also a lot of important (not so fun) things to be aware of as well. I mean, we are business men and women, and we must keep that in mind throughout the year, and especially when tax time comes around!
The good news is, there are numerous deductions that you can claim for your blogging business. Make sure that you read through the tips below for great deduction ideas, and reminders of what not to forget to claim as income.
14 Important Tax Tips for Bloggers
Important: Don’t forget your paper trail of receipts or other documents that support your claims for any deductions. If you’re unsure of anything, the best way to get the right information is to seek advice from a tax professional. Also, keep in mind, any deductions must be completely business related. You cannot just go crazy with deductions. Too many will send red flags to the IRS.
1. Web Hosting & Domain
This is part of your business so you can deduct web hosting fees and your domain name–and by this, I mean a domain name you paid for. You can also deduct blog design fees, business related plug-ins you paid for, etc.
2. Bank and Processing Fees
You can include banking and merchant processing fees as deductibles– including PayPal, Stripe, Authorize.net, etc. You can also deduct any fees related to having a business bank account.
3. Computer Expenses
You can make a claim for your internet, fax machine, scanner, copier, and printer.
4. Computer and Electronics
Software purchases & upgrades, computer equipment, and devices can be deducted. If you purchase a new computer or electronic item that is used for business purposes, it can be used as a deductible.
5. Business Expenses
These include business letterheads, business cards and pamphlets, and other stationery. For business trips: Hotel costs, mileage on transportation, meals, cleaning and laundering service, and so forth.
6. Home Office Expenses
Smartphone; PDA; office supplies – paper, paper clips, binders, files, postage, office chair, office furniture, etc.; also, a partial deduction of your home office space, water, heating bill, etc.–if you own your home, and have a specific space for it.
7. Home Insurance
You can claim a percentage of your home insurance for your home office if you own your home.
8. Product Reviews and Giveaways
If you spend any out-of-pocket money on a giveaway, you can claim that as well. However, if you receive products to review from a company (at their expense), those products are considered taxable income. Other things considered taxable income are: a paid trip to attend a blog conference. If you are an ambassador or sponsored by a particular company and they give you “free” things, those items are taxable. Make sure that you claim them!
9. Hired Help Wages
Outsourcing your work to a virtual assistant, hiring a babysitter, paying guest bloggers, or paying anyone to design and maintain the technical side of your blog. If you pay someone to do something related to your business, it is deductible. You can also claim any money you spend to file your taxes, business insurance, accountant fees, etc.
10. Business Loss
If being a blogger is not your primary job and you didn’t make a profit, you can deduct a portion of your losses against your main wages.
11. Unpaid Invoices
If you’ve written blog posts for clients, or done any business related “for pay” work, and they are overdue and/or they won’t pay you, you can deduct it as a loss. Just make sure you keep track of emails, invoices and any contact where they made the promise in case they try to dispute it.
12. Classes, eCourses, Misc.
These include webinars, audio books, eBooks, and podcasts related to your blogging business. If sold, they are income; if bought, they are a deductible. Keep in mind that you can also claim any fees you pay for emailing/form/poll services like MailChimp, WuFoo, etc. as business deductions.
13. Business trips, blog conferences, etc.
When you go on a business related trip–even if it is mostly covered–most of the time, you will still spend some out-of-pocket money. Like I said in tip 5, you can claim meals, mileage, etc. You cannot claim souvenirs or non business related expenses, though. Don’t forget about local events! That mileage can really rack up over the course of a year! IMPORTANT: Do not forget to CLAIM trips as income if they were covered by a company–even if they give you the tax money to cover it, you still need to claim the income! Yes, the money they gave you to cover (if you saved it) should take care of what you owe, however, it must still be “officially” claimed.
14. Income Earned from Your Blog or Site
Any income you earn from your blog such as selling advertising space, AdSense, Chikita, BlogHer, Burst, paid posts, etc., and affiliate income is all considered taxable income–whether they send you a 1099 or not.
Again, check with a tax professional for new state and federal laws each year, and any questions that you may have related to income and expenses.
The important thing is to always be open and honest about everything, keep good records, and keep all receipts.
You are not “just a blogger,” you are a person in business! Be savvy!
How about you? Do you have any tax tips to add for bloggers?? Please let me know in a comment below.
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