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Tax Guide for Bloggers

Tax Guide for Bloggers
Ines Zemelman, EA
14 September 2021

It's no secret that you can make a good living from blogging, whether you launched it as a pleasant way to chronicle your trip overseas or to create an extra income stream. However, it's crucial to realize that earning money in any form means you'll almost certainly have to record your earnings to the IRS and pay taxes for bloggers. The goal of this article is to provide you with answers to some common blog tax questions as well as tax tips for bloggers.

Blogging as a business

To correctly file taxes for your blog, you must first determine what type of business you are doing. Many individuals set up a blog for no other reason than to have fun. If this is the case, any revenue you generate from your blog can simply be recorded as basic other income on your taxes.  As a hobby, though, you won't be able to deduct any blog-related expenses. On the plus side, the hobby income will not be subject to self-employment taxes. If you plan to conduct blogging part- or full-time in the future, it may be helpful to choose a certain legal structure right away.

The legal structure of a blog

Once your blog has progressed beyond being just a pastime, you'll need to decide on a legal standing for your blogging enterprise. Sole proprietorship, partnership, and limited liability corporation (LLC) are the most popular choices for bloggers, but becoming an S-Corp or C-Corp is also a possibility.

For small, home-based enterprises like blogs, the most frequent legal entity is a sole proprietorship. In most circumstances, you can fill out a DBA (Doing Business As) form at the local county filing office. You won't require a sales tax license, an Employer Identification Number (EIN), or any other permits or documents as a blogger.

Due to additional legal liability protections and tax filing possibilities, a Limited Liability Corporation, or LLC, is another common business structure form for bloggers. An LLC can also choose to be taxed as a partnership, a C-Corp, or an S-Corp, and these decisions should be made with the assistance of a skilled tax expert.

Quarterly estimated taxes

You must pay your income taxes, self-employment taxes, and social security taxes as a self-employed blogger. You must pay both the employer and employee halves because you are also the employer. Self-employed, freelancers and sole proprietors must estimate how much they expect to earn for the full year, divide it by four, and transmit the result to the IRS four times a year. Most experts recommend that freelancers and single proprietors set aside 30–50 percent of their earnings for taxes until they have a better idea of what to expect from year to year.

Anyone who anticipates paying less than $1,000 in taxes at the end of the year is exempt from the quarterly income tax filing obligation. If you do not pay adequate taxes in advance through quarterly reporting, you will be charged late fees and penalties.

1099-MISC tax forms

Every company that pays you as a self-employed blogger will issue you a 1099-MISC. You'll get a 1099-K form if you use a business like Stripe or PayPal to process payments for the sales of your own goods and services. A thorough description of your profits from a specific company is a 1099-MISC document.

If you earned more than $600 from any affiliate company or client during the year, you should obtain a 1099-MISC. Even if a company forgets to provide a 1099-MISC, you must still report those profits as income on your tax return. Bloggers who earn less than $600 must also disclose their earnings.

Tax deductions for bloggers

The good news is that if you run a blog as a business, you can subtract expenses that are deemed acceptable and necessary for your trade. If you spend for marketing, materials, office equipment, electronics, insurance, or other items and services directly related to your operation, you can deduct those costs from your blogger earnings. You may be able to deduct some of your domestic expenses, such as rent and utilities if your office is in your home.

Ines Zemelman, EA
Founder of TFX