How to file taxes as a blogger.
Finally making some money as a blogger is super exciting. But figuring out the taxes that come from it can be a bit trickier.
If you have never filed your taxes as a small business owner or have never had hobby income before, you might not be sure what to do about your tax situation, especially in the first years. Whether you are looking for tips for filing taxes for the first time as a blogger, or just want to make sure you are doing things right these tax tips will help.
Here is the step by step guideline of what to do about your taxes as a blogger making money.
How To File Taxes as a Blogger
Filing a tax return as a blogger is not very different than filing as a small business owner. Blogging works on the same ideas as you are running a business. There are a few areas that digress as blogging is completely online. But overall it follows the same procedures.
If you are in approaching your first tax time with a blog though, you might be wondering what the general procedure is. This post is just the main steps you will want to follow to prepare yourself to pay taxes. It is meant for information purposes. As always, if you have questions about taxes and your personal situation talk to your financial professional.
1. Determine Your Blog Income
You will want to gather information on all the money you made this tax year. Did you have ads? Affiliate links? Sponsored posts? There are lots of ways to make money as a blogger and they all need to be accounted for. (Learn the most common ways for bloggers to make money—> How To Make Money Blogging)
This income needs to be actual money you have, not just earned but not yet paid out. This means it has hit your bank account, you are not waiting to reach a payout threshold. Income also includes free products you received in exchange for a review or mention. If you provided a service in exchange for the product, you participated in a barter transaction.
Note there are some specifics to consider when reporting barter income. You can read this post —> Barter Transactions for Bloggers—> to get more information.
Income Tax Forms
You might receive some tax forms for income received. In traditional jobs, this is usually the W-2. Most people are familiar with this. Bloggers receive different forms, like a 1099-Misc or 1099-K (PayPal sends out that one). Keep an eye out for tax forms, even if they are unfamiliar, and be sure to save them
Most tax forms are due out in February. (So if you are trying to get a jump on your taxes in January you might have to wait a bit to finish.) But the most important thing to remember is that you are responsible for reporting income even if you don’t get a tax form.
Long story short: If money hits your bank account from blogging activities- report it.
2. Determine Your Blog Expenses
I think a lot of people start blogging because it is a way to try to make money without a lot of start-up costs. They aren’t wrong. It isn’t like starting a clothing company where you would need inventory. But there are still some expenses to get your blog up and running, and the cost of running a blog isn’t zero.
So you are going to want to gather up all your expenses for tax write offs. What did you spend money on to make your blog run this year? Hosting fees, themes, stock photos? These are just some suggestions.
Take a look at this list for some of the most common tax deductions—> Barter Transactions for Bloggers
Look closely at every aspect of your blogging. The home office tax deduction for bloggers is one that a lot of bloggers should be considering. Keep note of any travel for blogging purposes (like for conferences), money spent on equipment, and supplies used for blog purposes.
Short version: If you spent money on your blog have a record of it for your taxes.
3. Decide How To File
Wait, after gathering all that information you still need to decide how you are going to file? Yes, there are multiple options for bloggers.
The first thing you want to do is decide if you are filing as a business or a hobby. The big difference there is it determines how much you can deduct. Read this post to help determine what category you fall into—> Is my blog a business or a hobby?
Most bloggers file as sole proprietors. What this means is that you are running this business on your own and are not an LLC or other corporation. (Nope, you don’t need to be an LLC to be considered a business.) This is a straightforward way to file that involves using a Sch C.
If you are an LLC or other partnership or corporation different forms might come into play. Read this post to learn the different tax forms you might need to use—>How To Report Blog Income
The other big thing to remember is that if you are self-employed, you need to file Self-Employment Taxes. That is form Sch SE. This can give more information on these taxes—>Self Employment Taxes
4. File Your Taxes!
Now that you have your income and expenses, and have decided how you file, it’s time to go for it!
If this is your first time filing taxes as a blogger I highly recommend you talk to a tax professional about it. Any time there is a major change in your tax situation it is a good idea to seek guidance. Tax programs like Turbo Tax or H&R Block can be helpful as well.
Remember that you are responsible for what you do and do not report though. Not knowing about a law or not getting a form does not exempt you from responsibility.
All this can sound intimidating, but you can do this. Be honest, be thorough, and ask questions when you aren’t sure what to do next. Before you know it filing taxes on your money making blog will be routine.
(If you want to find a way to streamline the info gathering portion of this process learn how to implement a super simple bookkeeping organization process—> Bookkeeping Organization for Bloggers)
Here is more information to help you out!