As a blogger, filling your tax return and sorting out your tax-deductible expenses can be the bane of your life. But, even as a hobby blogger that makes a minimal and sporadic income, it’s exceptionally important that you register as self-employed and start declaring your income as soon as you’ve got one, however small it may be.
Most bloggers find that their first tax return is nowhere near as complicated as they expect. As long as you keep track of your earnings with the use of both a Pay stub generator and a spreadsheet, it’s incredibly easy to work out your income for the year. My favorite accounting software is Freshbooks because it is sooooo user-friendly.
But, one area many bloggers neglect is their tax deductibles. They think that because their blog earns less than their tax allowance, it doesn’t matter. Or, they fail to realize that they are purchasing things for their business.
It can also be confusing.
New bloggers or small business owners often make the mistake of thinking that when they claim an expense, they get all of that money back. As this is often how it works as an employee, you claim back the money you’ve spent on travel from your company. It’s a little different when you are self-employed.
- Say you spend $100 on equipment for your blog.
- You declare that $100 as an expense and the tax you paid on it gets taken off your taxable income.
- So, you’re taxable income goes down and so does your tax bill
At the end of the year, deducting the right things can save you a fortune, or even mean that you don’t have to pay any at all. (!!!) This is even more important if you’ve got another job, as your self-employment will be classed as a second income and the tax that you pay will be higher.
Here are just a few of the things you ought to be deducting:
Bills
If you blog at home and your blog makes money, you work from home. This means that you can claim back some of your homes bills. You need things like gas, electric and a phone line to be able to work.
In most cases, this is a little different to simply claiming a purchase. You usually get a set allowance for the year; this changes all of the time, so check what you are allowed before you file.
Monthly Blog Expenses
Blogging is hard work, and exceptionally time-consuming. So, many of us use services to make it easier. These can all be deducted. Think of every subscription or service you pay for regularly; this includes things like hosting, cloud storage, automation services and domain charges.
The Things You Need
When you write some blog posts, you don’t need anything. It all comes from you. But, for other things, there are expenses.
If you write a recipe, you have to buy the ingredients. Try to shop for these separately to your other household shopping, so that they are on a separate receipt. This will make it easier to prove they are a blog expense if ever you need to.
Stationery
Most blogging will be done online. But, you may need notepads, paper, pens and other supplies. Big one-off purchases like laptops or cameras are also tax deductible if you use them to blog.
That’s a wrap on tax talk. Be sure to check out Freshbooks for a simple jumpstart on your blog and side hustling finances. What’s your method for tracking expenses?
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