Where do I report blog income on my taxes?
So you made some money blogging. Yay! That is awesome.
Now the bummer part. You need to report that income on your taxes. That’s okay, you know that and are ready to go.
One question. Where exactly do you report this income?
Let’s take a look at the most common forms use to report blog income on your taxes.
Where Do I Report Blog Income on My Taxes?
There are a few ways to report your blog income on your income taxes. What form you use depends on how your blog is structured as a business or hobby. Is it just you blogging? Are you part of a LLC? These all have their own filing requirements.
Let’s take a look at the most likely ways you will be reporting your blog income.
You can be blogging, make a little money, but have no intentions of making your blog a business. No problem, you don’t have to be a business. But you do have to report that income you made from your hobby.
There is a line on your Form 1040 that simply says: ‘Other Income.’ This is a spot to report income other than that which fits into the categories on the form.
I know, the ambiguity isn’t as helpful as it seems.
But, in the case of hobby income, it is clear. This is the spot for that other income. That extra little cash you bring in from blogging.
This can also be a place to report 1099-MISC income. But regardless of whether or not you received a tax form, you are responsible for reporting all your income.
If you are a hobby blogger and made some income during the year, this is probably a good place to report your blog income.
Learn if your blog is bringing in hobby or business income—> Am I a Hobby Blog or a Business?
Deductions taken on hobby income are taken on your Sch A if you itemize your deductions. It is important to note that deductions taken on hobby income cannot exceed your income.
What does that mean? You can’t take a loss bigger than what you made. For example, say you knit as a hobby and sometimes sell what you make. You made $100 by selling what you made, but you spent over $200 in yarn during the year. You can only deduct up to $100 on your Sch A. Your loss can’t exceed your profit.
Most bloggers, especially those just starting out, are sole proprietors. This means you are treating your blog as a business, but the only one involved in the business is you. (Sole proprietor businesses are not unique to blogging. Small businesses of all kinds can be run this way.)
Form Schedule C and Schedule C-EZ
The most likely place to report income and deductions as a sole proprietor blogger is on the Sch C or Sch C-EZ. The EZ form (yep, meant to sound like easy) is a simpler form to use. It does have some limitations though.
You can only use the Sch C-EZ form if:
- You only operate one business. If you have more than one you need to file Sch C for all of them.
- Your expenses are $5000 or less.
- You do not claim a home office deduction.
- You have no inventory.
- You have no employees.
Yes, the Sch C-EZ is faster to fill out. But speed shouldn’t necessarily be your goal when it comes to completing your taxes. So think carefully about which form is best for you.
Using Sch C is fairly straightforward. There are 5 sections for you to fill out with all of your income and loss information. This is the form you are most likely to use if you are a sole proprietor blogging as a business. If you have specific questions on this form talk to your tax professional.
Limited Liability Corporations (LLC)
You do not need to be an LLC to blog as a business, but some choose to follow this path. LLCs are pass-through entities. This means the profits and losses of the LLC are reported on the personal returns of the members of the LLC.
Single Member LLC
If you are a single member LLC, that is the LLC is just you, you report income and losses on Sch C just as a sole proprietor.
If your LLC is more than just you, you will need to do things a little bit differently. The income and loss from your LLC is still reported on your personal tax return.
Corporations need to tell the IRS they are corporations by using form 8832. When it comes time to file your taxes you will be using Form 1120 or 1120S. I’m not going to go into too much detail on this because if you are going the corporation route you will be using a tax professional for guidance and filing. They will help you through your specific situation.
Partnerships are more LLCs with two or more members. The LLC itself doesn’t pay taxes, the profits and losses are passed through to the individual member’s tax returns.
You do need to tell the IRS that you are filing as a partnership LLC, and this is done by filling out Form 1065. This form includes the Schedule K-1 for each member. This K-1 is what you as a member of the LLC use to report your specific profit and losses from the LLC.
Husband-Wife partnerships are something that can actually happen pretty commonly in the blogging world. As such, you can sometimes file a little differently.
(And yes, this is called a husband-wife partnership. Same sex marriage is legal in all 50 states, but it is still not 100% clear how these special circumstances are impacted by this. Check with your tax professional to find out.)
Husband-wife teams can be eligible to file as a qualified joint venture. In this situation, the only partners are the husband and wife, and they must file their personal taxes jointly.
The short version of this is that each spouse must be active participants in the business. That is you both work on it day-to-day, not that one spouse does all the work and the other occasionally does some background tech support.
Each spouse files a separate Sch C with their share of the profits and losses, and then this information is reported on their joint 1040. Check out this article for more information—> Husband-Wife Joint Ventures.
Talk To Your Tax Professional
So as you can see, there are several options for reporting your blogging income. Ultimately you need to talk to your tax professional and decide what is best for you and your situation. This is purely informational, but it should be a good jumping off point for you to research more.