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As the year start to draw to a close, every blogger I know is beginning to stress about taxes. Ideally you wouldn’t wait until this late in the year but I know that it’s a hard thing for some people to track and new bloggers may be completely surprised by some of these things. I know a lot of new bloggers don’t realize that they have to claim products they received for review as income and I can’t blame them, that surprised me the first time I found that out too.
I’ve learned, as a blogger, to sit aside 20% of the income this space earns each year for taxes when I file. Next year I think I’m going to start filing quarterly because I have reached a point where the end of year tax filings are getting a bit absurd. I use FreshBooks to track my income and expenses all year because I also offer blog coaching and set-up services so it allows me to manage my invoices, income, and expenses all in one place. It’s crazy easy and makes taxes a lot simpler when season finally comes around. It’s a lot easier to run reports from FreshBooks than it is to try to manually keep my own income spreadsheets in Excel or Google Sheets. If you want to give it a try, I recommend signing up for a free trial.
Fortunately, there are a lot of tax deductions for bloggers so keep receipts! You can claim web services, advertising, and home office expenses (among others) that really helps to reduce the income that you claim and thus reduce the amount you owe in taxes.
Disclaimer: I am not a tax professional and while the advice I am providing was offered to me by a tax professional, I recommend consulting your own accountant or tax professional to verify and maximize your deductions.
Remember, in order to prepare for tax season as a blogger you should:
- Track products you have received as you’ll have to claim these as income
- Track all of your expenses for your blog (from your camera to your internet service to your giveaway expenses)
- Keep receipts! For everything
- Use FreshBooks or other software to manage your financial reporting
- Consult with a tax professional to make sure you’re only paying what you owe
Blogging is a lot of fun and it’s a job that I absolutely adore but it’s also a business and you have to take it seriously from the beginning.
Did any of these deductions surprise you? Have you been properly tracking your product income? Any other tax tips to share?