A few weeks ago we discussed if bloggers are responsible to pay taxes and the general answer is a resounding yes. Unless your blog is a simple digital journal and you are making no effort to monetize your site then you’ll need to make sure the tax man gets his due. With that in mind, I thought I’d share some tax tips for bloggers that we tend to deal with. Again, please keep in mind that I am not a professional tax advisor and if you have specific tax questions then please speak with a trained professional. That said, let’s get on to the tax tips. 🙂
Keep Track of Everything!
One of the biggest, if not the biggest tax tip I’d like to get out of the way is keeping track of everything and I mean EVERYTHING. Do you make money blogging? Well, if you do, that means keeping track of things such as:
- Affiliate sales
- Direct advertising revenue
- Sales of your own personal products
- Any sponsorships/”free” products you may have received
It doesn’t just stop at revenue though for us as bloggers, but you also need to keep track of expenses – such as:
- Hosting fees
- Newsletter service fees
- Travel to conferences
- And much more
The point is that you need to keep an eye on everything coming in and going out. This may be the ugly side of blogging, but if you’re bringing money in then it behooves you to follow this most important of tax tips. There are various ways to keep track of income and expenses. You can go as simple as Excel or use products like Freshbooks to keep track.
Make the Blog Stand Alone
Assuming you’re bringing money in then one of the next tax tips you’ll likely want to follow is getting an Employee Identification Number, or EIN for short. This will allow you to basically keep the tax handling of your blog separate from your personal tax situation.
Once you get your EIN, I would encourage you to use that for everything related to your blog. You’ll want to update that with any affiliate companies you use so they can issue any applicable tax forms to your EIN and not you personally. This should generally make things much easier for you come tax time.
Make the Blog a Business
This may be one of the more advanced tax tips for bloggers, but it’s important all the same. If your blog is growing and you’re generating decent income come on a consistent basis then you’ll likely want to establish your blog as a business. There are several ways to go about this with the most common being establishing an LLC or an S corporation.
What is important to remember is that there are benefits and drawbacks to each of those situations and you need to do what is best for you and the blog. It may require a little looking ahead, but it’s something that’s incredibly important as you’re growing your blog.
An Easy Tax Solution
- Use H&R Block! They’re both affordable AND they make the whole process so much easier!
Photo courtesy of: Simon Cunningham