Do you consider your blog a business? If you make a profit from running your blog, you can bet that the IRS sure does! I’m no accountant, but I do know that your income from blogging has to be reported when filing your taxes. All of it. Even items you receive for free. That counts as income, too. Today, I want to share some tips about how to file taxes as a blogger so that you can do it painlessly and reduce how much money you owe to the IRS. Let’s get started!
First of all, I filed and paid my taxes with Turbo Tax. Like, just now. I’ve been using Turbo Tax for years, but this is my first time using their paid “business” version. I love how comprehensive it is! I liked using Turbo Tax to document my first year of blogging, because it walked me through all of the deductions I was able to take, but if you have an accountant or can do it yourself (??!?!?) then by all means! 🙂
So, how do deductions work?
Basically, if you spend money on your business/blog throughout the year, you can deduct part of these expenses from the money you’d otherwise owe to the government. For example, if you owed $1,000 based on your yearly income, but purchased a bunch of things for your business or blog, you could cut that amount down to $100. I should note that your expenses should not outweigh your income. So if you made $1,000 from blogging last year, you shouldn’t be writing off $2,000 of computer equipment. The IRS allows you to do this for three years, but then decides that you have a hobby rather than a business.
Saving Receipts
I also highly recommend saving your receipts, just in case you get audited. If the IRS thinks you’re fibbing or finds errors in your return and you’re found without proof that you purchased those deductions, you’ll be faced with extra fees and penalties. No bueno. Moral of the story? Save your receipts! Lots of people have folders or boxes that they toss their receipts into, but don’t forget to print out receipts and invoices for purchases made online, too. You could even scan your paper receipts and keep them, along with your online invoices, in a folder on your computer for easy organization. I’ve also noticed that money received as a blogger does not come in one tidy paycheck each month. Each month, I have money coming from all different sources and if I didn’t keep track of it, it would be extremely easy to lose track (or give myself a huge headache come tax season!). Instead, I recommend keeping a spreadsheet on your computer where you can track all the money you’ve earned as a blogger.
What are popular blogger deductions?
- Your blog design/template
- Blog conferences and workshops (even our recent OC Blogger Brunch!)
- Hotel and transportation costs if you had to travel to a blogger event
- Mileage (for your 2013 taxes, you can deduct 56.5 cents for every mile you drove as part of your blogger gig…for example, driving to a nearby blogger event)
- Business cards
- Buying ads on other sites
- Blogging related e-courses (like this one)
- Supplies for DIY projects that you use in tutorials on your blog
- Your computer
- Your camera
- Web hosting fees (I use and recommend Bluehost and WP Engine)
- Domain name fees
- Software, such as Photoshop
- Skillshare and other educational platforms (if the courses you take relate to your growth as a blogger)
- Paypal fees (yes, all those fees they take from you can be deducted!)
- Stock photo fees
- Your blog framework, if you purchased it (such as Headway or Genesis)
- Fonts
- Fees to prepare your taxes (such as hiring an accountant or using Turbo Tax)
- Photography, such as head-shots or paid photos taken for your blog
- P.O. Box fees
- Postage fees
- Blog coaching/consulting
- A giveaway prize that you paid out-of-pocket for
- Office furniture, if it’s used exclusively for blogging
- Your home office, if it’s used exclusively for blogging
There are even more things, depending on you and your blog, but just remember that if you spend any necessary money to run your blog, you might be able to write it off. I was horrible about keeping my receipts when I lived in Japan, both because taxes weren’t on my mind when I started my blog and because I never assumed I’d make any money from this ol’ thang. Do a better job than I did and start now. You never know how much money you’ll make before 2015 and when taxes strike next year, you’ll be so glad you kept all those receipts for deductions. 🙂
Will you be filing taxes for your blog this year?
**I’m not an expert on this topic, so you should probably consult a tax professional or filing service instead of taking my word as the gospel, but I hope this was helpful. 🙂
Thank you Melyssa, this post has been really helpful! 🙂
Thanks for the pie! 🙂 Glad to help.
You’re awesome lady! Seems like very few people out there want to talk or blog about taxes. I’m filing for my little business this year and using Quicken then Turbo Tax…so far so good but it’s nice to have some more ideas of deductions I could claim.
That’s great! Just curious, are you using Quicken and then Turbo Tax to check your work?
Yep! I’m using Quicken to compile all the info and keep track of all my spreadsheets of expenses/income, then import the relative info over to Turbo Tax to actually file.
Did my taxes last night… does get to be a lot of information!! Luckily I kept track of everything as I went, and as most of my income came through Paypal that have great records I could download. Always best to stay on top of these things though.
That’s awesome that you’ve kept track of everything! I agree, PayPal is magic. 🙂
Great information. Taxes are a little different here in Canada, and I won’t be claiming my blog as a business seeing as I make zero money on it, but it’s great to know for the future if I do choose to go in that direction!
Glad to help! 🙂
good to know! 🙂 thanks for putting this together. yeah.. the furniture and office space gets tricky.. and i hear it’s a red flag and you’re more likely to get audited. i wish there was an easier way to do percentages of what’s personal and what’s work-related.
Yeah, I’ve read that, too! I also agree about calculating work/personal percentages — it’s so subjective!
i’m an accountant, but i hate doing taxes! i use turbo tax too! 🙂
haha I love that! Makes me feel better about using it. 🙂
ya a also do it.
I just did my “blog taxes” this weekend and was slightly overwhelmed! I just learned that I made enough in 2013 to need to file which was not even on my radar because it is my hobby (I work 9-5)! This is a helpful post! I feel more on the right track! and Yes, turbo tax! I am posting my “what I learned form doing my blog taxes for the first time ever” post on Friday! lol.
It can definitely be overwhelming, but yay for getting it done! That’s awesome that you shared your own post on the topic — I think bloggers need to be reminded of it. 🙂
me too because I had no idea!
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This gives me a headache hahha
Great info and such a great post. I won’t be claiming anything for my baby blog this year, but I’m now going to start organizing all my blogging expenses. I now have the itch to print and file all of my receipts from when I started my blog. I can’t, it’s almost midnight and I’m in bed. lol!
haha I know that itch! That’s great that you want to organize your taxes even if you think your blog is small — there is so much I could’ve written off from when my blog was small, but I never kept track of anything because I never expected to make money off of it. You never know. 🙂
I think this is super helpful! I remember when someone said taxes could be filed as a blogger, but I didn’t understand how/what would work. Now someone just needs to explain how they go about theirs without a W-2 form & that would complete the guide!
Glad it’s helpful! Y’know, I think there’s a separate form you need to fill out, but since I use Turbotax it’s all integrated into the system! If you ever use TurboTax, you can file your W-2 and blog taxes all at the same time. 🙂
But what about /without/ a W-2? 😡
I use outright attached to my paypal and if you upgrade for tax help it will place everything in a schedule C for your 1040 and you can just present that to your accountant or pop it into whatever tax program you use (like h&r or turbo tax).
I highly recommend Quicken Home & Business. I do *everything* with it, and once you get used to it, it’s very easy! I scan all my invoices and stuff into and it has tax categories for everything so at the end of the year you can just print it off. 🙂
That’s awesome! I have a question since you said you do “everything” with it — does it keep track of expenses/income on a monthly/weekly basis? Like, is there a place to keep track of money earned and spent? I need help organizing that because I have so much freelance work from all over the place! 🙂
Yes, it does have a budgeting tool. The way I have mine set-up is that I have seperate accounts for my etsy, photography and eBay accounts. I process all fees and things through that. At the end of the year you can run a report. Whenever I open it up, it shows me what I’ve had come in and what I’ve spent.
Wow, those are great tips, i never thought about all this. What an insight.
Glad to help! 🙂
Great post! There are seriously so many write offs, including- lunch/coffee dates where blog talk happens, magazines & online subscriptions (as they can be classified as research), labor time for sponsored posts, all office supplies, a portion of phone/internet.. really just so much stuff! Also if you think you will be writing off more than what you made, then for the bigger purchases spread them out over a few years instead of claiming all at once =)
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Thanks so much for this post! I’ve been wondering lately how all this works, since I only just started making money off of my blog. This is really helpful in letting me know what to go about doing before next tax season!
That is great to hear, Kiersten! Good luck to you. 🙂
My question is, how do you write off the free swag? Do you estimate how much that item would cost if you’d purchased it yourself?
Hi there! The free swag is actually not a write-off, it’s considered income, so you will need to pay taxes on it. But yes, if you don’t know how much the items cost, you can estimate its cost if you’d purchased it yourself.
Gotcha, thanks. I was confused about that. 🙂 I’ve also heard that you can write off your internet bill and/or cell phone bill if they’re used for your blog/business — something to look into!
This is great information! Thank you for sharing. I’m wondering if things which include phone service can be deducted, or would it be wise for bloggers to have a separate business line? I am going to e-mail this to myself for future reference. Have a great day!!! ambyfelix.com
Hi Amby! I believe the rule is that YES things like phone service and internet can be deducted, but only the percentage that you actually use for work. So, if you use your phone for blogging 10% of the time, you can deduct 10% of your bill.
My blog is a hobby but I think I might need to file taxes based on free products sent. I work 9-5 too so do I just add this as additional income on my taxes even though its not a business?
Hi Lauren! Now, I’m not an accountant so don’t take this as the word of The Accountant God, but yes, I do believe you just add it as additional income. You may not think your blog is a business, but if you receive free items/make an income, the IRS does, so it has to be reported.
Thank you so much for this helpful post! I haven’t been able to find out much more about taxes as a blogger. I do have a question though…
I work with AOL’s the StyleList for advertising and they had me set up a sole proprietorship to get an EIN for my blog. Does that mean I have to file taxes for my blog as an entirely separate business, or can I still file all blog income as “extra income” on my individual taxes? So, I guess my question is… Does a sole proprietorship still get filed along with income from my full time job or is it totally separate?
2014 was the first year I really made any money blogging and I don’t have a good understanding of taxes to begin with, so I’m a bit stressed and overwhelmed! haha
Hi Jacy! I’ll be honest that I’m not ENTIRELY sure, but I definitely think you file them together. In fact, when I filed my taxes last year (for 2013’s taxes), I had worked as a blogger/freelancer while also working as a teacher. When I filed those taxes, I did it all at the same time on TurboTax. I believe the only difference is that you need to fill out some extra forms. With your full-time job, you’ll probably receive a W-2. Now that blogging is thrown in, you just need to do another form to report that income and pay taxes on it (I THINK it’s called Schedule C?). I hope that helps! 🙂
Thank you for this post!! I haven’t even officially started yet but I’ve been doing research on everything I could think on about blogging. I will save my receipts!
That’s awesome, Lashawnda! Way to be ahead of the game. 🙂
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So I’m completely in love with this post. I’ve started making income form my blog and this topic has been on my mind for a couple months now. I have no idea how to go about reporting my income from it. I’m going to have to read this more in depth when I get home tonight. Does my blog have to be turned into a legal business in order to report the income? Or does it just go under additional income or something? I’m so confused haha
Hi Keating, it depends. As someone operating business, you are already a sole proprietorship, and you definitely want to report your income if it was over $500 for the year. If you want to become registered and get an EIN, you could out to become an LLC. This will make your business a separate entity, versus a sole proprietor’s business is view as one and the same with you.
Thanks for compiling this list! I’ve been thinking about how to navigate my taxes as a blogger and this was super helpful. As all your posts are, thanks Melyssa!
You are so welcome! I am glad that you got some help 🙂
You are so welcome! I am glad that you got some help 🙂
I have a blog that i started this past summer/fall in 2015 thelivingwellco.com. But, I haven’t made any money yet (and probably wont for a little while!) as I work a full 9-5. Can I still claim these deductions? Is this how your first year went?
I have the same question. I bought my domain in November, but my blog didn’t go live until January 18th. Should I bother with taxes this time around?
Great tips for all of us that try to earn from our site!
I’ve been trying to decide what I should hang on to and what I shouldn’t bother with as I start up my blog. This is a helpful guideline, thanks for posting it 🙂
I’m so glad! Thanks Sierra 🙂
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Thanks for the kind words, Randy! 🙂
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Melyssa, I was wondering for where you said DIY items that you use in tutorials, would this include all supplies used to tutorials?? I do some beauty tutorials. That would be pretty amazing if you could lol!
The key here is to keep the expenses you write off as the usual and customary items required to do your business and only business. For example: Nurses can write off uniforms. They’re not items that can be used elsewhere. However someone working a job that requires black pants, shoes and a specific color polo cannot write those off as they can be used outside of the job. The IRS is very particular on these types of rules, and vloggers follow almost the exact same ones.
Makeup is like that. If you are a special effect artist and the items
you are buying and demonstrating will not have any use in your daily
life they can and should be written off. However, if the blush, eye shadow, powders, foundations etc can be used in your daily life, then no you cannot write them off. If there were such a thing a leasing makeup, you could write that off as you’d not be keeping the items.
It should also be noted that trips are a peculiar thing in the IRS’s eyes too. Say you attend a makeup convention in NYC. You can write off the travel, hotel and meal expenses that are usual and customary, as well as the cost of the convention passes. You cannot write off concierge, a $200 dinner at a fancy restaurant, or ball game tickets.
Just be careful, play by the rules to the best of your ability and keep all receipts!
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Oh interesting. Thanks for sharing your tip with us, Samrath!
Hello! I started blogging at the beginning of August of this year. So far I have spend more building my blog and received half of what I spend from ads. Would that affect my tax report?
I wish I could help more but that would be a better question for a tax professional. Good luck! 🙂
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I just came across this post and love it! I was wondering if I need to declare myself as an independent business and get a business number? It’s my first year of blogging, so I didn’t bring in much income, and instead, more expenses, but I bought items for blogging and have to travel for blogging events as well.
Thanks in advance for your advice!
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Hi Miki! I’m not a tax professional so you should definitely consult your tax attorney about this but from my experience, I don’t believe you need to worry about getting a business number. You should be able to get started as a sole proprietor and write off any blog/business related expenses. Good luck! 🙂
Thanks so much for that. I wasn’t quite sure if registration was required. I’ll use my own name for now and see how it goes this coming year. I’ll find a tax accountant that can advise me. I appreciate the response. 🙂 Thanks for sharing this post!
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I’ve purchased items like cameras and computers to create videos for social media marketing, but haven’t started an LLC yet. Do you think I need to register a business first to claim those deductions? I just don’t want to spend extra money if my business really isn’t taking off. I know I’ll be purchasing additional items for my computer and cameras here soon as well. Do you have any insight as to what route I should take? and what I can deduct?
Hey Justin! I’m not a tax professional so I would recommend consulting with your tax attorney about this but from my experience, I believe you are able to write off such expenses even as a sole proprietor. 🙂
Melyssa’s comment below is correct.
Believe it or not, just creating an LLC does not do anything to change your taxability with the IRS. You are what is known in nerdy IRS land as a “disregarded entity”. You continue to be taxed as a sole proprietorship and can take the same deductions.
This would only change if you make a special election with the IRS to request that your LLC be treated differently. For instance, you can elect to have your LLC be treated like an S-Corp. I believe from reading another of Melyssa’s articles, this is what she has done.
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You are a wealth of knowledge, Melyssa! I didn’t even think of things like Fonts or Giveaway prizes. I know it’s early for tax season but I’m just trying to plan ahead! Thanks so much!
Woohoo! I’m so glad this article was helpful for you. Good luck with tax season! 🙂
I’m a beauty blogger and most of my income comes in the form of product. How do you suggest I prove what the value of those products are to show my income? Most of the companies just send the product without any paperwork, invoicing or something showing the pricing/value.
This is a great overview! For anyone looking for some additional insight on understanding and paying less taxes, I am a CPA and just started a blog specifically focussed on helping bloggers and other online business owners navigate it all. There is a link to the site in my Disqus profile, but I would suggest that Melyssa has provided a good basic overview.
Hey there Howard! 🙂 Thanks for commenting in here and sharing your 2 cents. 🙂
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