Disclaimer: I am not a tax professional. I have written this guide not to educate you on what you should be claiming on your taxes (as every blog and blogger is different), but rather some deductions that you may not know about. This post contains affiliate links, but is in no way sponsored or otherwise compensated.
One of the most bittersweet times of the year are upon us: Tax Time! On the one hand, I love getting that money back – don’t we all? On the other, adulting is hard and preparing your taxes can be complicated – especially if you are a blogger. What kind of expenses should you be claiming? What earnings do you need to report? I’m going to give you some helpful tips that have really helped me get the most on my return the last couple of years as a blogger.
Did you know that you can claim all sorts of things on your taxes from a percentage of the depreciated value of your computer, to a percentage of your utilities if you have a room of your house dedicated to home office use? I just bet that like me, there are plenty of deductions that you might have missed!
As a reminder, I am not a tax professional. I am just your average, every day blogger who was fortunate to come across the information I am going to share with you. I feel confident that my experience with preparing my taxes for myself will help you with your taxes and get you more credits and deductions this year.
Your Blog May Be a Business
It’s true. Your blog may be a business and you are the CEO, the writer, photographer… down to the coffee retriever. If you are a blogger, you can consider yourself self-employed if you have made a net income of $400 or more from your blog and thus, must report your earnings on your taxes.
The IRS has rules about what constitutes a business versus what is a hobby. There is a great list on the IRS website to help you determine which one your blog falls under.
For example, if you make $1,000 from ad sales and affiliate earnings and you have $600 in expenses on website maintenance, your net income is $400 and has to be claimed. If you earn $1,000 and spend $700 or more, you aren’t required to report it – although I personally do so because I find keeping a record from year to year with the IRS helps in addition to offsetting the money I earned from my “day job”. I get back more money for having a business that took a loss or made very little net income.
It’s worth noting that unless it’s your first year preparing your taxes as a blogger, your expenses shouldn’t greatly outweigh your income. It’s normal if it’s your first year of business due to start up costs, but otherwise the IRS gets a little fussy if you didn’t break even or you are writing off a $3,000 piece of equipment when you only made $500. It may trigger a flag and they might question it.
But what is taxable income? What earnings need to be reported? Here are some examples:
- Affiliate sales
- Ad spot sales
- Sponsored posts
- Paid reviews
The good news is that while you may have to report that income, you also get to tell the IRS about all of the money you spent. These blog expenses can really add up and can increase the amount of deductions you get to claim. Some examples of blog expenses would be things like:
- Advertisement – Paying for an ad spot in a sidebar
- Contracted Labor – Paying someone to design your blog, do graphics, be a virtual assistant for you, etc.
- Depreciation Expenses – A portion of the cost of an item used in your business over a period of time, such as a laptop or camera.
- Sponsored Posts – Paying others to post content
- Giveaways – Spending money on items raffled off in a promotional effort and shipping them
- Website – Hosting, themes, maintenance, domain
Tax Prep Can be Easy!
I know that it’s scary to prepare your taxes, but it really doesn’t have to be. There’s great software these days that was designed to understand nearly every type of tax payer – including bloggers! I like to use H & R Block’s Tax Preparer. I just used it for my third year in a row and it’s been invaluable to me as someone who honestly doesn’t always understand the mumbo jumbo involved with taxes. In fact, I think without the help of this software, I wouldn’t be getting back anywhere near as much as I am this year.
My favorite part is that it’s grown with me as a person. When I started using the software, I was filing as “Married, Filing Separately”. My husband passed away in February 2014 and that’s hard enough without worrying about what I’m going to do come tax time. We were estranged and although we remained friends, I didn’t have all of the information on hand that a wife usually would. This software remembered all of his information for me from a previous filing and helped ease the process of filing my taxes as “Widow”, and again this year when I switched to filing “Single”.
Deductions You Might Have Missed
There are so many great deductions to consider and you probably never even thought about them. These are real deductions you can make and as long as you have the proof you purchased something (even if it’s just through PayPal), you can claim it so long as it’s related specifically for your business. Here are some amazing deductions specific to bloggers:
- Web Hosting Fees
- Website Themes & Design
- Plugins & Other Website related software
- Domain Purchase & Renewal
- Stock Photography
- Business Logos & Graphic Design fees
OFFICE SUPPLIES | % Based on Amount Used for Business
- Computers, Tablets, Printers, etc & Upgrades
- Office Furniture like desks or chairs
- Printer Ink & Paper
- Flash Drive / Memory Sticks
- Photography Supplies
- Facebook,Twitter, Other Social Media Boosts
- PassionFruit.com Subscription (or similar)
- Buying ads space on websites
- Google Adwords
- Flyers, Business Cards & Other Printables
BLOG RELATED TRAVEL | % Based on Amount Used for Business
- Transportation: Car mileage, Airline, Taxi, Bus, Train, etc.
- Highway Tolls
- Parking Fees
- Cleaning & Laundering while traveling
- Conference Costs
- Food & Drink during travel
POSTAGE & STORAGE | Specific to your Blog & Business
- Stamps & Shipping
- Post Office Box Fees
- PayPal and Western Union fees
- Storage Units
There may be other deductions specific to you. If you are unsure, you can always contact a tax professional. In fact, I strongly suggest that if you are unsure of what you can deduct, you go to your local H & R Block (or similar) to have them go through the process with you.
There are amazing books available on the very subject of taxes for bloggers and the self-employed, but this one by Nikki Hughes has been repeatedly recommend across the blogosphere and after reading it, I know why! It’s easy to understand, straightforward, and written by a tax accountant. I mean, if I can read it and understand it… chances are, you can too! This is my personal recommendation.
But if you want more information, here are some other helpful books that cover tax information for the self-employed, small business owners, and bloggers:
- The Tax and Legal Playbook: Game-Changing Solutions to Your Small-Business Questions
- Small Business Tax Deductions Revealed: 29 Tax-Saving Tips You Wish You Knew
- Small Business Taxes for Dummies
- The Confident Indie: A Simple Guide to Deductions, Income and Taxes
- 475 Tax Deductions for Businesses and Self-Employed Individuals: An A-to-Z Guide
Download This FREE Resource!
This year, I wanted to keep a much better record of my earnings and expenses. I found myself combing my PayPal and bank accounts at the end of 2015 to try to figure out what was a blog expense and what was purchases for my blog. I found a great idea for a spreadsheet that is already helping me keep tabs on my net income. I designed my own to reflect my needs and I wanted to share it with you!
This spreadsheet is able to be modified. I am using it via Google Docs, so you don’t even need fancy software to utilize it. It’s very simple to use. After downloading, go to Google Docs, select File >> Open >> Upload and you will be able to use the form!
What Have You Missed?
What deductions did you not know about? What did you miss on your taxes? I know that I might have missed a couple of opportunities myself this year after doing further research for this post. Still, I know that I am getting back a lot more this year because I found a lot of these legitimate claims for my blog.
What is this?
This page is part of the Blogging Like a Boss Series – posts dedicated to sharing real information to bloggers in an affordable way in hopes that we can all learn and grow together! This series was designed to teach bloggers of every niche and level of advancement.
Most of this series is completely FREE, while some posts are considered to be premium content which may require you to log in and purchase for a small fee.