Ladies and gentlemen, this right here is probably the least sexy post I’ll ever create: let’s chat about taxes! Yeah. No one was excited for that. Sorry.
I’m going to start off with the point that if you really don’t know what the heck you’re doing, go see an accountant. I am most certainly not doing my taxes alone (especially since I have a 9-5 and a blog, so that’s just a lot going on), so I have my accountant on standby this time of year. However, there are a lot of things you need to do as a blogger to prep for tax time, whether you have a CPA or not. Unlike a regular 9-5, you don’t get a W2 in the mail outlining your exact income, gifts are considered income and you have to calculate your business expenses. Yikes.
Calm down, grab a cup of coffee, and take some notes, y’all.
- Calculate Your Income
Before you file or see an accountant, you’re going to need to calculate your own income. Some blogger media groups will send you a 1099-MISC form if you’ve made over $600 with their network in one blogging year which is amazing. Some wont. You’ll need to go through and calculate all the times you were paid!
On an unpleasant note, all that free swag you got in 2015? Yes, that needs to be reported as income too. Before a company sends you an item, ask what the MSRP value is rather than the retail value and claim that on your taxes!
- Calculate Your Expenses
Guys, be meticulous about this one. The more expenses you deduct, the less taxable income you have, the less taxes you will pay. Score!
You probably have a lot of expenses that you haven’t even thought of yet. Let me break some major expenses down for you (these might not be all of your expenses, so I highly advise seeing a CPA so you have everything covered!)
- Website-Related Expenses: Hosting, domain name, stock photography and website/graphic design fees are all essential expenses to help keep your website up and running. Don’t forget these!
- Rent: No, you can’t claim your entire apartment. However, if you’re a blogger, you most likely are working from home. If you have a home office area, you can claim that square footage as an expense.
- Internet: Ok, you can’t claim your entire cable bill here, but calculate how many hours a day you approximately spend on your website. If you spend 4 hours a day working and 4 hours Netflixing, 50% of your internet use could possibly be expensed.
- Photography: If you use and pay a photographer, it’s an expense. Buy a camera or lens? Expense. Buy Photoshop or Lightroom? Buy props for your shoot? Expense, expense, expense. This is one of my greatest expenses as a blogger, and it might be one of your biggest expenses as well.
- Blogger Events, Social Media Workshops, Conferences, Etc: Holy major expense, guys. Definitely put these down!
- Travel: travel to and from the aforementioned events? Deductible. Start tracking mileage and keep those plane ticket receipts!
- Meals and Entertainment: Are you meeting with a business partner over coffee, lunch or dinner? That, my friend, is a deductible expense. Hope you saved some receipts!
- If you made over $1000…
Heads up, you’ll most likely have to start paying quarterly taxes. See a CPA for this one.
- Forms 1099-MISC for Contractors
If you paid a contractor more than $600 in one year, you’ll need to send a 1099-MISC form. One copy goes to the contractor to help them prepare their personal income tax return and the other goes to the IRS so they are on the lookout for that income on the contractor’s return. These are due on January 31st, so get to it. |
- Create a better filing system for 2016
Ok, your head might be spinning a little bit right now. I’m sorry. Since we’re only a few weeks into 2016, set up a filing system for yourself. Save those receipts whenever you buy balloons and flowers for your photoshoots or whenever you have those lunch meetings with business partners. Keep track of mileage in an Excel doc. Figure out how to organize youself now so that next January you won’t be stressing!
- Consider saving a portion of blog income for tax time
Owing money during tax time isn’t really ideal, so you should consider dropping some of your blog income into a special tax time savings fund.
What are your tips for tax time?