Tax Tips for Bloggers
When I started blogging about 5 years ago, my motivation for writing was to have a record of my progress towards becoming debt free and building up some savings. I was having a great time and I occasionally got some feedback from readers who discovered my site. My husband and I used the information gathered to build our budding family’s finances – we paid off the car loan and we started saving for a down payment on the house.
As I continued writing I noticed opportunities came up to earn some extra money. - advertisers paying for small banner ads on my blog, offers to write on other sites, and even assisting others on getting their sites up and running.
When I quit my office job a couple of years ago, I used the income I received from helping a friend with his website business and the blog to take care of my portion of the bills. Over time I realized I could be self-employed if I got a bit more organized and so I decided to go out on my own.
Decide How You’re Going to Do Business
Before you can take care of your taxes you need to make sure your business is correctly registered. For many starting out, sole proprietorship is easiest and cheapest option. However you need to see what makes the best sense for your particular work. Possible ways to run your business include a partnership, a limited liability company, or a corporation.
Look at the legal and tax requirement of each type of entity to determine what the best option for you. I’ve found the limited liability company to work well for my circumstances.
Pay Your Quarterly Taxes
As a business that earns income, you’re expected to pay your taxes regularly in the form of estimated taxes. General quarterly taxes are due:
- April 15th - 1st quarter of the current year
- June 15th - 2nd quarter of the current year
- September 15th- 3rd quarter of the current year
- January 15th - 4th quarter of the previous year
Please keep in mind the dates may be slightly off if the 15th due date falls on the weekend or federal holiday.
The good news is that there are several ways you can pay your quarterly taxes.
- Online -Electronic Federal Tax Payment System
- Phone – Please choose the option applicable to your business:
- 1-800-555-4477 (businesses)
- Mail - Check the IRS to see which location is appropriate for you.
Personally I prefer using the online option – it’s quick and easy and I can immediately print out a receipt for my records. However I should point out you need to register first which takes a couple of weeks, so sign up BEFORE you need to pay your taxes.
Please also check your specific state’s requirements on taxes as it can vary.
Blog Related Business Expenses
Running and earning income from a blog does take work and keeping documents on the related expenses can help you come tax time. The good news to keeping good records is that you can deduct your qualifying business expenses from blogging when you file your taxes.
While not a complete list, here are a few business expenses I’ve had over the years:
- Office Equipment: Office equipment like the computer and printer depreciate, which you can include on your taxes (provided they are devoted to business use).
- Office Supplies: While most of my work is done online, I do have to replenish my office supplies like copy/print paper, printer ink, and pens.
- Subcontractors: I have a staff writer for one of my sites that I pay monthly. We both keep records of the invoices and the payments.
- Website Expenses: Running a website often means paying for hosting, the domain name, and possibly privacy services.
As your business grows, you’ll probably have more expenses, but I wanted to list a few that I started off with when I made blogging my business instead of a hobby.
I use tools like Evernote and DropBox to keep records and backups of my files. They’ve been reliable and very affordable options for me. For the last few years we’ve used TurboTax Home and Business to take care of our family’s taxes and have been pleased by the ease of use of the program.
More Blogging Tax Tips?
If you’re a blogger and have been doing business for a while, what tax tips would you like to add? What tools do you use to keep everything organized?