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?
This is super helpful! I didn’t realize there was so much that went into blogging and taxes!
So so helpful Alicia- thank-you! I am currently navigating going over my 2015 income so this post was a great round-up of what exactly it is that I need to make sure to have documented from last year. And great suggestions of things to document for 2016! THANK-YOU!
xoxo A
http://www.southernbelleintraining.com
This is so helpful– thank you so much! I was just searching for this info this morning and then saw your blog post on Facebook. SO glad I did!
These tips were SO helpful. 2015 was a big year for me in terms of income/expenses/gifting, so I’m a little confused, but these tips were a helpful place to start! Thanks!
Pink Champagne Problems
Wow, this list is so helpful..even though I didn’t make much through my blog last year, I was somewhat puzzled by how I would have to pay taxes if I made more money. Thanks for this Alicia!
http://www.purejackie.com
These tips are super helpful, and definitely something to keep in mind as we ramp up our blog. Thanks for this awesome post, Alicia!
XO, Jaime | RegallySoled.com
So starting a file for this year! AND bookmarking this post!
Xo Corbin Tate
Classy South Blog
Thanks for the tips. This is our first year as a blog, so this is all new to us!
This is such a huge lifesaver.Luckily most of my blogging income comes in through PayPal, so it only took me a couple of hours to organize (almost) everything. I’ll definitely be more organized for 2016. Thanks so much!
|| littlebittycityone.com
Great article with great tips. Especially if your newer to blogging. Thanks for sharing.
This is definitely helpful !
|| D I A N A ||
http://www.TheNeonFactor.com
Tax time. Grrrrr. But, an evil we must face. Thanks for pointing these tips out!
Very helpful tips and thanks for prompting a more organized approach for 2016.
I keep careful track of my income and expenses throughout the year to make tax time easier.
I FINALLY did things throughout the year last year so tax time this year won’t be quite so miserable! These are great tips though. Definitely helpful!!
Thank you for the tips!! I started blogging last November so I have no idea how to do blogging taxes. I will be pinning this!
I’m bookmarking this post! I haven’t begun to make money from my blog yet, but it’s much easier to organize/plan ahead of time for when I do. Now I know what to expect, thank you for sharing!
Great tips. The finances always intimidate me, but you made it simple. Thanks Alicia!
This is fantastic! I have definitely followed some of your rules this past year (my first year blogging), but I am working super hard to do better with logging everything this year!
Great suggestions. Fortunately, since this is my first year as a freelancer, so it won’t be too daunting. I funnel my payments through a paypal business account and into a separate business account. The reports help me calculate income.
Good info Alicia, thanks! I haven’t started to monetize yet, but I will definitely be claiming the startup expenses for the 5 months in 2015 that I was blogging.
Thanks for the tips! I now have a “Blog” binder that I use to keep track of my expenses and I use Paypal to keep track of my income!
Great tips!
xo Jessica
http://www.mystylevita.com
I love your tips! Super important to talk about this stuff instead of ignoring it!
Wonderful tips! Thanks!!!
Thank you a million times over! Specific and helpful!