Thursday, January 21, 2016

Tax Tips for Bloggers

Well, it's really the new year.  The holidays are over and hopefully we're all past the point of changing 5s to 6s every time we try and write 2016.  I've loved seeing everyone's blogging goals and resolutions this year.  Last year, one of my new year's resolutions was to grow my blog.  I wanted to create better content, start working with brands, and improve my photography.  Creativity and sharing (as well as bringing in a little extra income) were the fun parts.  Now that it's a new year, it's time to start thinking about the tax ramifications of my new business: my blog.  Luckily, my husband is an independent contractor in the software development world, so we've been able to learn about all this tax stuff together.  While I am, by no means, a tax expert or professional, here are five tips that have helped me understand the world of blogging in the eyes of the IRS.
1. Open a separate bank account: Especially for collectives and sponsored posts that pay via direct deposit, this is so helpful.  I keep all of my money earned and spent for Borrowed Heaven in one place, making it easier to track later.

2. Report all income, no matter how small:  Some people think that unless you received a 1099-MISC (a statement of payments to an individual from a company), you do not need to report that income on your taxes.  Typically 1099s are only sent when payments are more than $600, but all income must be reported, no matter the amount.

3. Don't forget to count that "free stuff:" As much as we hate to hear it, anything received with an expectation of something in return needs to be reported as income.  Conference swag, products received to review, giveaway prizes, and any trips you are "given" so you can share your experiences on social media should be monetized and listed as income.

4. Make estimated tax payments: Running your own business, you might need to make payments throughout the year due April 15, July 15, October 15, and January 15 to the IRS.  These payments comprise: both halves of the payroll tax (employer and employee taxes for Social Security and Medicare) and federal income tax.  You're probably used to working at a job where these are taken out of your paycheck before you receive the money (so you never see it), but since you are the employer and employee, you need to take the money out yourself.  The only cases when you do not need to make estimated tax payments are if you did not owe last year or if you expect to earn under $1000 total for your business the year.  Obviously, if you fall into one of those two categories and decide not to make the estimated payments throughout the year, you still need to declare all your income on your tax return at the end of the year and pay then, or you may face penalties.  I like making the estimated tax payments so I don't have to worry about setting aside money all year (and potentially spending it).

5. Deduct your expenses: As bloggers, we have a lot things we can deduct.  Most of us work out of our homes and pay for way more than we think to help grow our blogs.  Ideas for deductions include...
  • Website expenses: domain hosting, web page design, search engine optimization services
  • Advertising: sidebar ads, participation in giveaways, business cards
  • Blogger education: webinars, podcasts, books, one-on-one counseling with other bloggers or PR professionals
  • Travel expenses: airfare or mileage (in 2016, this is 54 cents per mile) to conferences and events, class costs, hotels, food while on business trips
  • Membership dues: Charleston Blog Society for me!
  • Supplies: pens, calendars, post-its, white marble contact paper (you know you bought some last year), photo shoot props, even that Erin Condren planner!
  • Electronics: external hard drive, SD cards, anti-virus software, camera lenses, computer repairs, telephone bill (your personal portion if in a family plan), internet bill (approximate how much of your total internet time is spent blogging), public internet fees (on airplanes or in cafes) 
  • Post office or safe deposit box fees
  • Home office square footage: 9% of our apartment is our home office so 9% of our rent, renter's insurance, and utilities are deductible
There you have it!  Please remember to always consult your accountant or tax advisor with questions before filing your taxes this year.  Do you have any other suggestions that have helped to make your blogger taxes easier?

19 comments:

kerri @ cheshire kat said...

this is super handy chica! love it!

xoxo cheshire kat

Meghan @ Me as Meghan said...

This is so interesting! I had no clue about estimated tax payments. Thanks for sharing!

Amanda Elizabeth - Meet @ the Barre said...

Having the blog has been so helpful for me especially since I got my LLC for it and now it's my business!

B @ The Sequin Notebook said...

Very, very helpful! Thanks for sharing these tips!

Emily Ballard said...

Very helpful!! Thank you (:

BLovedBoston said...

This is seriously amazing especially the deduction for the office and supplies - I totally forgot about that!! xo, Biana -BlovedBoston

Kelsey @ The Peacock Roost said...

Great tips!! Thanks so much for sharing!
Kelsey
www.thepeacockroost.com

Kate at Green Fashionista said...

This is amazing! I never knew we could deduct blog expenses, such a huge help! And I love the idea of having a separate account for money earned on campaigns :)
Green Fashionista

Jen said...

These are definitely great tips!!

Chesson {A Southern Twenty-Five} said...

These are great tips :) Thanks for sharing!

Macy V said...

This is super helpful! Thank you for sharing. I really need to get with my accountant about this.

Rebecca Jo said...

I have been blogging for nearly 9 years & never made one cent off my blog so I'm good to not have this worry added onto my taxes - whew! I'll take any little less worry I can get :)

Missy said...

I don't have to worry about this now, but pinning for when I hopefully do! Thanks for this helpful information!

Liz Jo said...

Can you really deduct the cost of a domain off your taxes? How is that allowable without getting in trouble? Wouldn't a blog be considered more personal than professional? I had no idea, wish I would have known for last year's taxes, every penny counts!

Also wouldn't for travel expenses it would have been for last year so you could use last year's federal rate of .575 to save more money!

liz @ j for joiner

Emily said...

Had no clue we are supposed to report freebies as income...I haven't been keeping tracking of most of this stuff! #badblogger Great tips girl!

Amanda {Kids and Cabernet} said...

This is so great! I totally have a deer in the headlights look on my face right now. I had no idea I had to report half of what's on here lol

Christina Lea Loves said...

So helpful! Thanks for sharing these, lady!

Kait said...

Great tips! I remember the first year I itemized for taxes, it was CRAZY! I felt so lost -- these is such a useful post :)

aki! said...

I am a tax professional, and I agree. These are great tips!

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