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Real World Tax Guidance for a Freelance Blogger

Business Finance Self-Employment Tax Planning
Freelance blogger using her laptop to write a post.

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Working as a freelance blogger is certainly not a get-rich-quick scheme, but it can help pad your bank account if you’re working a full-time job or even lead to a lucrative career as a freelancer.

If you’re a freelance blogger (whether full-time or on-the-side) who earns even a little bit of money, then you’re probably looking for some tax guidance to help out with the transition from single W-2 employee to a slightly more complicated filing situation. Don’t worry! The 2022 tax tips for freelance bloggers below have you covered.

Various ways you may have earned money

Monetizing your blog with ads and affiliate links aren’t the only ways in which you may have earned some income in 2022.

Popular ways of earning money as a freelance blogger include sponsored articles on your site, freelance writing for other outlets, sponsored social media posts, and even speaking engagements. As a quick tip, always be sure to disclose if you’re doing sponsored posts on your site or social media by mentioning the partnership or putting #ad or #spon.

This variable income from so many different sources has the potential to feel overwhelming when it comes to tax filing. That is why one of the most important tax tips for freelance bloggers is to track your income efficiently.

Streamline your tracking process

There are plenty of software options to track business income, send clients invoices and monitor expenses. You can also be hands-on and use spreadsheets as well as manually generate your own invoices.

You can always keep track of expenses in a spreadsheet and snap photos of receipts to save into a folder on your computer. However, you could use services like Freshbooks to streamline your process. And you should always keep your business expenses separate on a business-dedicated credit card. It’s also a good idea to keep a business checking account for all business deposits, expenses, and quarterly estimated tax payments. This will help you track your business income and expenses more easily and ensures they stay separate from your personal income and expenses.

Pay quarterly estimated taxes or prepare for a penalty

There are many tax tips you need to take when transitioning into earning income as a freelancer, but one that is often ignored is to make quarterly estimated tax payments. Don’t ignore this!

The IRS wants its cut of your paycheck once per quarter instead of in one massive lump sum at the end of the year. You need to make quarterly estimated tax payments with the federal government and your state (assuming you pay state income tax). The filing dates in 2023 are April 18, June 15, Sept. 15, and Jan. 16, 2024.

A good rule of thumb is to get in the habit of setting aside at least 30 percent of each paycheck for quarterly estimated taxes. That way you have the money readily available when it’s time to pay your tax bill.

Now, if you work a full-time job and just blog on the side making minimal income, you could adjust your withholdings on Form W-4 at your day job to cover the extra taxes on your blog earnings. TaxAct® has a W-4 calculator that can help you do this. Adjusting your withholdings will take more from your day job paycheck, but it’ll cover what you aren’t automatically paying in taxes on your freelance income. As your side income grows, however, you’ll likely need to start paying quarterly estimated taxes.

Forms to expect

More than likely, you will work primarily as a contractor for your freelance gigs. That means employers won’t send you a traditional Form W-2. Instead, you’ll get Form 1099-NEC.

The tricky part is that not everyone will have to send you a 1099-NEC reporting your income. It’s only required of employers if you earned more than $600. If you earned less than that, it’s entirely on you to report the income without the aid of a 1099 form. Not receiving the form doesn’t mean you can get away with not reporting earnings under $600. That’s a common misconception and bad tax advice sometimes given to freelancers. You must report all your earnings, whether or not you receive Form 1099-NEC.

If you still work a traditional job, you’ll also receive your Form W-2. You may also get forms from your investments, known as Forms 1099-INT, 1099-DIV, or 1099-B. Those are different 1099 forms from the ones employers send, but you should report those earnings on your tax return too.

What you need to get started

The idea of doing a slightly more complicated tax return may want to send you running to an accountant for tax tips – but you can easily handle your return with TaxAct Self-Employed.

To start filing your return, you need to have:

  • All of your 1099s (or a record of income earned)
  • Form W-2 (if you still work with a traditional employer)
  • The log of any earned income not reported on a 1099 form
  • Your expenses

The need to find all of that information is why you should be diligent about tracking all of your business expenses throughout the year. Whether you use software or a spreadsheet – you need to make a note of all your business-related transactions.

When to get started

Like Form W-2, employers are required to send your Form 1099-NEC to you by Jan. 31. It’s important to keep in mind not all your clients or employers will send a 1099-NEC. If you made under $600, the burden is on you to report the income.

But thanks to you diligently tracking your income, you should be able to start the tax filing process right at the start of tax season. Don’t use the excuse of waiting on 1099-NEC forms to give you a reason to drag your feet. As long as you have accurate records, filing your tax return should be easy.

This article is for informational purposes only and not legal or financial advice.
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