Contact Us!Subscribe to Blog and RetireFollow Blogandretire on TwitterBlog and Retire on Facebook

Blogging & Uncle Sam: 10 Things You Need to Know About Blogger Taxes

This is a guest post by Maxime.

Are you a freelance blogger and want to know what your taxes will be like? Like other writers, working as an independent contractor makes it slightly trickier when it comes to the IRS. Here is an overview of paying taxes as a blogger and 10 things that you should know to help you prepare.

The majority of taxpayers are issued a W-2 each year from their employers, which has a breakdown of federal, state, social security, medical deductions, etc. This is an important distinction. As a blogger or freelance contractor, these funds will not be set aside when you receive your paycheck and you must plan accordingly or risk a large IRS bill at the end of the tax year.

If you filled out a W9 form as a freelance blogger, it will be easier to keep track of your invoices if the company has this set up for you. However, most bloggers are not considered full-time employees and may not receive a 1099 form – an alternative form covering freelance and miscellaneous items. It’s extremely important to keep all documents, receipts and invoices.

10 THINGS YOU NEED TO KNOW

1. Keep all documents and receipts. Regardless of whether or not you receive a 1099 statement, you will want to keep track of all invoices, payments received, important receipts and emails to cross-reference them to your invoices as you prepare for taxes.

2. You still have to pay taxes even if you did not receive a 1099 statement. You must pay taxes regardless if all you receive is a check. Because so much is digitally done these days, make sure you save your email correspondence as well. This will be an important tracking record for what you are paid.

3. Hold onto tax records and receipts for 7 years. Independent contractors, freelance writers and other creative self-employed freelancers should hold onto their records for at least 7 years in the event they are audited.

4. Consult with a tax professional. As a freelancer, paying taxes can get a little tricky. It is important to consult with a professional CPA so that you ensure you are playing by the rules. This tax professional will also assist you with planning for future taxes, deductions, etc.

5. Set aside 20% of your paycheck toward taxes. Always save at least 20% of each paycheck you receive on blogging. This is a good amount that should cover your taxes at the end of the year. If you have a second part-time job, consider saving the income from that job to pay toward your taxes. You will want to consult your tax professional in advance to make sure this is sufficient and adjust as needed.

6. Consider classifying your blogging business. Business classification offers liability protection and offer important financial benefits. Most bloggers can choose to file as Sole Proprietor, S. Corp or LLC. Again, you’ll want to talk to a tax professional to find the best fit and benefits to your individual needs.

7. You need to pay taxes on a quarterly basis. As a blogger, the IRS considers you self-employed regardless if you have a business classification or not. You will need to pay quarterly tax. Check with your CPA to find out what you need to do.

8. Check if you need to file even if you make less than $400/year. As a blogger, the general rule is when you are paid $400 or more per year, you are required to pay taxes. Even if you make less than $400, make certain that there are no other filing requirements under the IRS rules.

9. Understand what you can deduct. There are a few things you can deduct as a business expense to bring down your tax bill. As mentioned, you’ll want to save all your receipts. Some of the things you can deduct include: Hotel costs and mileage for business trips, webinars, industry books, website hosting fees, website design, jump drives, graphic design fees and business stationery. As always, check with your tax professional to know the rules for deductions.

10. Is your blogging for hobby or business? There is a crucial difference between hobby business and a business for-profit. You must be using your blogging business to make a profit and you must work at it regularly (it can be full or part-time). You will want to be clear on this and ask your tax professional if you have any doubts. There are serious consequences for taking deductions that the IRS considers inappropriate.

About the Author

Maxime Rieman is a writer for NerdWallet, a financial literacy website that provides financing and investing tips, auto insurance comparisons, and other cost-saving tips for consumers.

Did You Enjoy This Post?

No spam. Powered by MailChimp.

3 Responses to 'Blogging & Uncle Sam: 10 Things You Need to Know About Blogger Taxes'

  1. Dean Saliba says:

    I suspect it is the same in the US as it is here in the UK, our government rubs its hands with glee when it sees it can tax another freelance blogger. I earn around the same as I did when I was a cleaner and yet I pay about 10% MORE tax, and for what? To line the pockets of people who are too lazy to go out and find work themselves. 🙁

Trackbacks/Pingbacks
  1. […] 1. We all have to pay our taxes and as an independent business owner that responsibility lands solely on our shoulders – a good read. http://blogandretire.com/blog/2013/07/blogging-uncle-sam-10-things-you-need-to-know-about-blogger-ta… […]

Leave a Reply

Your email address will not be published. Required fields are marked *

*


Member Login | Blog | Services | Advertise Here | Terms | Privacy Policy | Disclaimer | Disclosure | Contact