As I was reading Yakezie Member posts months ago, I realized that many started off like myself as bloggers looking towards reaching a personal goal. Some of us saw blogging as an opportunity to get more educated on our finances and take responsibility for our futures. Along the way, we noticed that it also became a legitimate and alternative source of income.
With January here and many people thinking about their taxes, I thought it would be a perfect time to go ahead and share some tax tips for bloggers.
Blogging as a Business, Not a Hobby
One of the best thing you can do for yourself financially is develop an alternative income stream. As you know, blogging can be a viable source of income, especially if you treat it like a real business instead of just a hobby.
Keep Your Paperwork Organized
You have a responsibility to report to the IRS all your blogging income. The easiest way to mess that up is by keeping shoddy records for your blogging work. You have to be on top of your paperwork. When I say paperwork, I also mean any digital receipts you may have as well. I use Evernote to help me keep my receipts in order and as a backup to some of my paper records. There is also DropBox if you need a backup for all your business files.
Business Expenses in Blogging
Running a successful website isn’t always cheap, but the good news is that your business expenses can help you come tax time. What can you include as business expenses? Here’s a list to get you started along with some relevant questions and comments.
- Subcontractors – Do have a staff writer on board for your website? Make sure you have an invoice to be able to deduct this expense.
- Depreciation of Office Equipment – If you’re like me you have a devoted business computer which you can take depreciation on.
- Legal and Other Professional Services - Do you have someone handle your bookkeeping or taxes? These important services are legitimate business expenses.
- Office Supplies and Expenses – Do you have a dedicated location where you work? Have you been keeping receipts for the office supplies you’ve needed through out the year?
- Business Travel – If you attended a blogger or industry related conference, make sure you’ve kept all your receipts for lodging, meals, and travel expenses.
- Advertising- Getting the word out on your blog is more than just placing ads on other sites. Did you know that you can count blog contest prizes as an expense? It’s a form of promotion and advertising for your site.
- Website Expenses – Your web hosting, domain costs, and other site fees are considered business expenses. If you pay stock photography fees for pictures on your site, that’s also another expense to track.
- Continuous Education – If you bought books or have subscriptions that you’ve used to improve your blogging business like magazine and education sites, that’s a business expense.
My last piece of advice is have a professional review your taxes to make sure you have it done properly, especially if you’re new to blogging as a business. It may cost money upfront, but it’s well worth the investment.
Be on Top of Estimated Taxes
Don’t wait until April 15th (or the 18th this year) to pay taxes. Your estimated taxes are due through out the year. Staying on top of them is important so set aside a certain percentage of your income to be dedicated to paying your taxes. Here are the general deadlines for estimated taxes through out the year.
- April 15th
- June 15th
- September 15th
- January 15th (of the following year)
Other Tax Tips and Ideas on Blogging
I know there is a wealth of information and personal experience from the blogging community. If you have any tips, stories, or ideas to share, please do. I think it’ll help everyone immensely. Please keep in mind that these are tips and you should check with a financial professional to make sure your business can take certain deduction and expenses.
Note: Congrats to Elle for expecting her first child and her new baby expenses series!