Blogging started in the 1990′s as a way for people to express themselves online. Today there are more than 100 million blogs, and some blogs have even grown into huge businesses that are used by many small business owners.
Is your blog transforming into a legitimate business? Are you a seasoned freelancer who does not fully understand your tax-break eligibility? Is your blog already profitable and causing you stress due to existing tax issues or unknown tax implications?
Tax season is fast-approaching, so it is best to know what tax deductions you are eligible to receive. Below are some topics that will help you better determine what tax credits are yours for the taking. If you have additional questions about paying taxes as a blogger, contact a tax resolution specialist today.
What is the intention of your blog?
Many people start a blog with no intent to one day make money from it. Thus, business taxes are far from their mind. The IRS interprets blogging as one of two things: a business for profit, or a hobby. This may be hard for some bloggers to determine, especially since the profit you have made far outweighs the expenses of operating the blog.
When it boils down to it, you are either running an online business, or you are writing for fun. Determining what category you fit into is your first step.
Think about those little expenses that can add up.
As a blogger, you are probably spending a significant part of your time researching for your next article. Believe it or not, those little expenses start costing you a lot. Things like movie tickets, library subscriptions, webinars, club memberships, DVDs and CDs related to your blogging, podcasts that you use for your freelancing, domain and template costs, printer ink, stock photo purchases, and paid site submission fees are just some examples.
Did your blogging lead to you purchasing a new computer, computer equipment, camera, hard-drive, printer or voice recorder for your freelance work? If so, you are eligible for business tax deductions. Don’t forget that the IRS recognizes the purchase of new business equipment as an eligible tax deduction.
Think about monthly and annual fees.
Do you have annual business credit card fees? If so, you can receive tax deductions for these. Additionally, you can write off website hosting fees, cell phone bills, Internet access fees, and business membership fees.
Book Keeping: Be Meticulous
Get into the business mindset and start viewing your blog as legitimate business. If you have yet to start keeping track of your expenses, you may be missing out on tax refunds to which you are entitled. Now is the time to start. Balanced books with legitimate records can be your best friend come tax season.
If you know someone who owns a blog, please consider sharing this post with them. And if you have questions about tax resolution services, or need help with back taxes the IRS or State claims that you owe, contact the tax lawyers at U.S. Tax Shield today!