Commonly Missed Tax Deductions for Bloggers and Online Influencers
Did you know that as a Blogger, you can write-off some of the common items you use to make your web empire awesome?
Bloggers and Online Influencers have now etched their space into the digital world loud and strong. They have sacrificed sleep and social life to get that time sensitive post out for their followers. I understand this burden and I am here to help you steer through the world of taxes, especially the tax issues that affect you as a Blogger, Vlogger, or Online Influencer.
For some of you guys, blogging gives you a taxable income. You may be able to deduct some of your blogging or freelancing adventures, but first you will want to make sure all your documents are in line.
On this article I will show you how to get the most business deductions and lower your tax bill.
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When preparing for the tax season, please keep in mind that you can write-off expenses that are common for your profession and ones that are necessary to help you run a business.
If you need to claim expenses, then be sure to fill out the itemized deduction Schedule A Form.
I’ve put together a quick, generalized tax deductions checklist for Bloggers and other Online Influencers to download below.
5 Common Deductions for Bloggers and Online Influencers
1 – Clothing
Your work outfit has to be specific to the work you do as a Blogger or Social Media Influencer. For example, special shirts, pants, or shoes that are highly impactful for your blog or social media message are items you can write-off when doing your taxes. You just have to be able to prove its necessity for accomplishing your job as an Online Influencer.
2 – Supplies and Subscriptions
Any amount you spend on materials you purchase as a Blogger for your business. Listed below are some deductions you may be missing each tax year and not even know that you’re eligible to claim.
These items include:
- WordPress Plugins
- Fiverr.com (outsourcing)
- Stock Images
- Shared workspace
Power Tip: Keep a good record of each item you buy, just in case you need it in the future for the IRS.
When it comes to your education, which is highly important to stay competitive, these fees can also be written off. Along with any travel associated with obtaining your continued education, such as blog conferences. Seminars and online courses (like How to Start a Blog) can also be written off if they’re used to enhance your skill for your blog business.
Subscriptions to online media related to your blog business also counts as deductions since you need them to stay up-to-date with the latest trends in the industry.
4 – Start-up and Operating Expenses
Start-up expenses are everything you spent to get your blog business running such as, equipment, online services, rental space (if needed), marketing, etc. The IRS treats these differently, in the fact that you can write off up to $5,000 on your taxes, with the rest being depreciated over 15 years. Your CPA (Certified Public Accountant or trusted Tax Advisor can go into more detail on depreciation with you).
Depreciation means you can claim some of the equipment costs for a smaller tax break over a few years (read more about the process called depreciation here).
Operating costs are the expenses needed to maintain your business such as, monthly subscriptions and website hosting fees.
5 – Any Services
Services such as advertising or business coaching are examples of services needed to maintain the integrity of your business.
Other Tax Deductions for Bloggers
- Internet (partial amount)
- Domain fees
- Hosting fees (using BlueHost)
- Public internet access fees
- Stock photo purchases
- SEO services and fees
- Paid site submissions
- Website design fees
- Data storage fees
- Business related software and licensing fees
- Tax and accounting software
- Portion of landline/cell phone dedicated to business
- PC equipment used to blog
- Home Office (room exclusive use only, contact us for more details)
- Business Cards
- Office Supplies
- Digital memory cards
- Recordable CDs and DVDs
- Business furniture
- Zip drives
- Photo printouts and processing
- Printer ink and copier toner
- Long distance charges related to business
- Business equipment rental
- Computer upgrades and depreciation costs of computer equipment
- Blog conference fees and registration
- Lodging (do not combine with meals)
- Meals during conference (50% of cost- do not combine with lodging)
- Entertainment (50% of cost)
- Vehicle Expenses
- Transportation (flight, shuttles, taxi, car rental, tolls, etc.)
Education and Professional Tools
- Industry books & periodicals, including audio books
- Magazine subscriptions
- Research sites that require a subscription
- Educational webinars
- Business podcasts
- Professional memberships
- Online courses (like Making Sense of Affiliate Marketing, Pinterest, Six-Figure Blog)
- Charitable donations
- Marketing fees
- Movie or theater tickets related to blog
- Business incorporation costs
- Costs for Trademarks or Copyrights
- Business logos and graphic design fees
- Advertising costs
- Photocopying/faxing fees
- Legal fees
- PayPal and Western Union fees
- Post Office Box and Safe Deposit Box fees
- Coaching advice that pertains to your business
- Prizes and giveaways
- Gatherings you organize for your business
Tax Related Items
- Real estate taxes paid (% for your home office)
- Qualified mortgage insurance premiums (% for your home office)
- Deductible mortgage interest (% for your home office)
- Previous Year Tax Preparation Fee
Grab your own Blogger tax preparation checklist below!
Forms Needed to Claim Deductions as a Blogger or Online Influencer
Bloggers and Online Influencers are generally independent contractors, meaning self-employed. Whatever way you are paid, you’ll want to keep track of every amount of money you receive. IRS Form 1040 is needed to write off your expenses as a Blogger, Vlogger, or Social Media Influencer. The expenses of your business will be placed inside the deductions area of Form 1040.
Power Tip: Use the standard deduction only if your total expenses do not exceed the dollar amount set by the IRS.
An itemized deduction is only needed if your expenses are more than the set standard deduction dollar amount. You can use the IRS Form 1040 Schedule C if you need to itemize your deductions.
Remember: Keep track of your expenses and income on a spreadsheet or bookkeeping program such as Xero.
How do You Know if Your Blog is a Business for Tax Purpose?
The IRS will categorize your blog as either a business or hobby. If your blog is a hobby, then you cannot claim any tax deductions.
In order to be seen as a business you must have a profit in at least three of the most recent five tax years.
How to Keep Your Tax Information Organized
- Hold on to your W-2 forms and 1099 forms
- Save receipts of items you bought for your business.
- Keep track of expenses in an excel spreadsheet or through a bookkeeping software such as Xero
- Have a tax preparation checklist completed
- Keep a detailed Blogger tax deduction checklist handy
12 Tax Tips for Bloggers and Online Influencers
- Remember deductions have to be items related to your business
- Keep track of receipts
- Create a separate bank account for business only
- Use excel spreadsheet for bookkeeping or a software which will make your life easier once tax season comes
- Take a percentage out of each sale/payment to save for taxes
- Remember that if you make money from your blog, then you have to report it (Profit vs Loss)
- Talk to a professional tax advisor or you can chat with me if you have a question
- Print your tax checklist: the list will help keep you organized and help you not miss any possible deductions
- Save finalized tax report from (e.g. Form 1040) previous years in a file area easy to locate
- Start early and prepare throughout the previous year (trust us it will save you a lot of pain)
- Stay current on new tax laws and breaks especially if they affect you directly
- Remember that overlooked deductions mean you put less money into your wallet, and you may end up paying too much in taxes
Don’t worry, you got this! Plus, I’m here to help answer any questions you may have along the way. Now go out there and conquer the world with your awesome blog business and influence.
Hope this tax deduction checklist helps you navigate through the sometimes-muddy waters of the income tax season. Remember to keep track of your receipts and if there’s a question about any possible deduction be sure to contact me.
I definitely do not want you to miss out on any deductions. Overlooked deductions mean you put less money into your own pocket and you may end up paying too much in taxes.
Will you be filing taxes this year for your blog? Let me know in the comment section below.
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Until the next money adventure, take care!
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**Note: Each client circumstance will vary on a case by case basis**