Paying taxes as a blogger poses a unique challenge that is different from other, more traditional jobs. Why you ask? There are a number of reasons, but it largely boils down to virtually all of your work being done online and the difficulty that can come in to place with tracking so many expenses and, hopefully :-), income sources. With that in mind, I thought I’d share various ways you can manage taxes as a blogger – from more traditional ways to simpler ways.
Old School Paper
Depending on your school of thought, you may be tempted to manage taxes via the old school method of physical paper. While this may be the preferred method for some, managing a blog can make this somewhat difficult, to say the least.
The main reason behind this is that many things will be handled digitally, especially if you’re making money from blogging. If you’re not, then it’s possible the IRS will view your blog as a hobby and thus potentially lose any benefit of writing off expenses. Getting back to the point, going the old school route can be a burdensome way to track everything tax related to your blog. If that is your preferred method, I encourage you to find ways to make it easier on yourself.
Create Your Own System
A popular way to manage taxes as a blogger is to create your own system to do so. While this could be easier said than done, it is possible to accomplish if you use a program like Excel to keep track of your blogging income and expenses.
The key with creating your own system to manage taxes is to make it efficient so you can access the information you need. If you’re like me, nearly everything is handled via email – receipts, commissions on affiliate sales, etc. Make it easier on yourself by creating individual email folders for each area – so you’d have a folder for expenses, one for affiliate income, one for freelance income and so forth. Make them applicable to what you mainly pay for and earn and it’ll be simpler to manage taxes when the time comes as opposed to scrambling at the end of the year to find that one email receipt you need.
Let Someone Else Do the Work for You
The next level of managing taxes as a blogger is to find a platform that will take care of much of the heavy lifting for you. There are many different platforms out there, with ones like Freshbooks being one of the more popular resources.
What is nice about many of these platforms is they can track nearly everything for you. They allow you to track income, expenses, hours worked if you freelance and provide it in simple reports for you to download or print. What’s even better is that if you invoice clients, some programs partner with PayPal so you only have a $.50 fee come out of a payment as opposed to 3% of the total bill. While not a lot, every little bit helps.
An Easy Tax Solution
- Use H&R Block! They’re both affordable AND they make the whole process so much easier!
How do you manage taxes for your blog? Do you have any other tax tips for bloggers?
Photo courtesy of: 401(k) 2012