Tax Tips for Bloggers
Blogging is a relatively new profession, but it's covered by the same tax laws that apply to many other occupations. You may be able to take advantage of certain deductions to reduce your tax bill.
Key Takeaways
- As a self-employed blogger, your taxes won't be automatically withheld from your earnings. If you’ll owe more than $1,000 in taxes, you’ll need to pay estimated taxes to the IRS every quarter.
- Since you’re self-employed, you pay both the employee and the employer portions of your Social Security and Medicare taxes on your blogging income (known as the self-employment tax).
- Self-employment tax is calculated separately from income tax on your tax return.
- You can deduct business expenses that are considered reasonable and necessary to your profession, including for an office in your home if you use a space only for blogging.
Being self-employed
Blogging is a relatively new profession, but it's covered by the same tax laws that apply to many other occupations. The main danger from a tax perspective is that, as a self-employed blogger, your taxes won't be automatically withheld from your earnings, as is typical with traditional employees. Additionally, you'll owe self-employment taxes that most employees don't pay. However, you may be able to take advantage of certain deductions to reduce your tax bill.
Estimated taxes
Be aware that as a blogger, you're likely to face estimated taxes, something most traditional employees don't have to worry about.
The United States tax system operates on a "pay-as-you-go" basis. Since you don't have any taxes deducted from your blogging income, you'll typically need to pay estimated taxes to the IRS each quarter. The due dates for estimated taxes are April 15, June 15, September 15 and January 15 (with some exceptions for holidays, etc.). If you don't pay your estimated taxes in a timely fashion, you may owe an additional tax penalty. If you didn't have any tax liability in the prior year, or if you don't owe more than $1,000 in tax, you may be able to avoid paying estimated taxes.
Self-employment tax
When saving for your estimated income taxes, don't forget to set aside additional money for self-employment tax. From the perspective of the IRS, working as a blogger means you run your own business.
Even if you only work part-time as a blogger and full-time as a salaried employee somewhere else, the blogging part of your income qualifies as self-employment income. As a result, you'll likely need to pay self-employment tax on that income, which is the combined Social Security and Medicare taxes paid by an employee and an employer. Since you run your own business, you pay both the employee and the employer portions. Self-employment tax that is due has to be paid whether or not you owe any federal income tax.
TurboTax Tip:
If you fail to earn a profit in at least three of the most recent five tax years, the IRS may categorize your blogging business as a hobby and disallow your tax deductions. To claim your deductions, you'll need to demonstrate to the IRS that you are running a bona fide business.
Deductible expenses for bloggers
The good news about running a business as a blogger is that you are allowed to deduct expenses that are considered reasonable and necessary to your profession. If you pay for advertising, supplies, office furniture, electronics, insurance or other goods and services that directly relate to your business, you can take those expenses off the income you earn as a blogger. If your office is in your home, you may be able to deduct some of your household expenses as well, including rent and utilities.
Business as hobby
The IRS will disallow your tax deductions if your blogging business is categorized as a hobby. To claim your deductions, you'll need to demonstrate to the IRS that you are running a bona fide business. The most obvious way to prove this is to earn a profit. If you have a profit in at least three of the most recent five tax years, you can usually qualify your business as legitimate.
Other things the IRS may consider are the time and activity you put into the business, whether or not you depend on income from it and if you can reasonably expect to make a profit in future years.
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