Taxes for bloggers can be so confusing. There are all the complications of self employed business owners, but with the added addition of blogging being a fairly new thing there seems to be a lot of grey area –especially in regards to payments and what to claim.
So, What Counts As Payment?
Obviously, money paid to you counts as income. Where it gets confusing for bloggers is in products and bartering.
When a product is given to you to facilitate a review does that product become income, or just a tool required to do your job? Bartering is considered income. If you exchange ad space for a product then it is considered bartering. If you make a commitment to write about a product, it is considered income. Or, in tax talk “When there is a reasonable expectation of a product for service contract”. If something is just sent to you in the hopes that you will write about it, it is a perk and not income.
Keep Your Paperwork
Keep track of email exchanges for products. Keep track of sponsored posts, how you were paid, and the date you were paid. Self employed tax returns are more likely to be audited, so be sure to be organized with paperwork to back up everything you are claiming.
What To Claim:
- Hosting & Domain Fees
- Computers, cameras, office supplies
- Prizes for giveaways and contests
- Books, magazines and subscriptions
- Conference fees
- Business related travel
- Cell phone and internet
- Portion of home expenses (% of home used for blogging)
- Paypal fees
If you are scrambling to get your taxes done this year, I highly recommend checking out Staples Tax Center. You can get everything you need to get yourself organized from tax software, notebooks, calculators, highlighters, markers, and candy to make it a bit more endurable.
*I am by no means an expert on taxes, so if you have any questions please consult a professional.