What You Need To Know About Taxes And Your Blog

Many people enjoy blogging as a hobby, but some use their blogs to generate income. If you are making money from your online blogging activities, it's important to recognize that you will need to pay taxes on this money.

Understanding how blogging can affect your taxes is challenging, but here are three tips to keep in mind that will help you accurately report your blog income in the future.

1. Referral benefits don't count as income.

Some companies offer a cash incentive for referring friends and family members. If you feature one of these products or services on your blog, you don't need to report the income generated from the referrals when filing taxes for your blog. This money is written off as an expense by the company providing the referral payments.

However, you can only overlook referral credits. If you are generating income through an affiliate marketing link, this money will need to be reported as blog income.

2. Remember to include giveaways in your expenses.

Hosting giveaways on your blog can be a great way to engage with existing readers and attract new subscribers to your site. Items that you purchase for giveaway purposes (including online gift certificates) should be listed as an expense when filing your taxes.

If you are planning to use a product that you have made yourself as the prize for a giveaway, you should calculate the retail value of the item and record this amount when calculating your business expenses. Accurate reporting of your expenses can reduce the amount you pay in taxes each year, so be sure that you are including giveaway costs in your expenses.

3. Write off purchases made exclusively for blogging.

It can sometimes be difficult to determine which expenses you can write off when filing taxes for your blog, especially if you are a lifestyle blogger. Take the time to consider whether or not you would have made the purchase if you didn't plan to write a blog post about it, and then use this information to determine which items you can write off.

For example, if you receive a notification that a new online retailer is offering a discount, and you purchase a new sweater with the intention of writing about your experience for your readers to learn from, you can write off the sweater purchase as an expense. Ensure that the purchases you write off are genuine (no, you can't claim your coffee expenses as blog fuel) and you shouldn't experience any problems.

Filing taxes when you operate a blog can be challenging, but understanding how to report your income and expenses will help you minimize your tax burden in the future. For help with preparing your taxes, contact a CPA at a company like Wiggins, Smit, Burby, Reineke, & Company P.A.

About Me

Understanding Financial Freedom

About 10 years ago I can honestly say that I didn't understand what it meant to truly be financially free. I was bound by my monthly bills, just doing whatever it took to keep my creditors happy. It was a terrible way to live, and I was really depressed. I didn't know how to change things, but I knew that I had to start somewhere. Eventually, I decided that it would make the most sense to make a financial plan and try to dig myself out of debt. That simple decision was all I needed to completely change my life. This blog is all about understanding financial freedom.