Tax deductions are a great way to keep more of your hard-earned money and lower your tax bill. They reduce the amount of taxable income earned through your blogging business all year long.
The best part: as a blogger, you can deduct a wide range of expenses, from costs related to conferences and seminars to office supplies and car mileage. Even better, these deductions are available to those who blog full-time and on the side. The Internal Revenue System (IRS) classifies all bloggers as self-employed.
Learn what deductions you can take advantage of so you don’t miss the chance to save a single penny come tax time.
Typical Top Tax Deductions for Bloggers
As a blogger, you can take advantage of the following deductions:
- Office supplies
- Home office
- Writing conferences and seminars
- Job-related travel expenses
- Books, online resources, and subscriptions
- Website fees
- Unpaid invoices
Here’s a breakdown of each deduction.
Office supplies: This includes traditional office necessities, like paper, pens, notebooks, staplers, and printer ink cartridges. All of those supplies are deductible expenses on your return. But, when it comes to items that last longer than one year, like laptops or computer equipment such as printers and digital cameras, things get trickier.
Those items are considered business assets, and you must capitalize them. That means you should deduct the cost over the long-term life of the asset, otherwise known as depreciation.
Home office: Expenses in this category include office furniture (desk, chairs, ergonomic accessories) and physical repairs made to the space as long as it’s used solely for business purposes. Other top expenses include a portion of your rent, Internet access, utility bills, insurance and mortgage interest.There are two ways of handling this deduction. and the newer simplified method is the most advantageous for freelancers and self-employed filers—and is easy to calculate.
You can deduct $5 per square foot up to a maximum of 300 square feet for the portion of your home used for your blogging business. At the maximum, this equates to a tax deduction of $1,500.
Writing conferences and seminars: This is considered professional development and necessary to your business. As such, you can write off the costs associated with attending these events, including the ticket and related travel along with marketing or advertising costs if you’re also presenting or sponsoring the event.
Job-related travel expenses: This includes any expenses incurred during business trips, such as airfare, gas, rental vehicles, bus and train fares, and local transportation. Note that travel must be overnight and away from your primary residence or place of business to qualify. And you can only write off 50 percent of meals on business trips.
Books, online resources, subscriptions: Much like the writing conferences, these purchases are considered professional development. You can also write off dues paid to be a member of any professional organizations.
Advertising or marketing: Examples of costs in this category are those incurred to advertise and market your blog or business website, including paid ads on search engines and marketing subscription costs.
Website fees: This includes fees paid for your domain name, domain hosting, your site’s theme and general maintenance costs. If you paid a contract worker to build or maintain your site, for example, you could also deduct that cost.
Software: Any software that’s paid and used to manage your blogging business can be written off.
Gas/mileage: If you travel to see clients, suppliers, or for any other business-related reason, you can deduct the cost of gas, mileage used and normal wear and tear to your car. This one can be tricky because you have two options for reporting the deduction. You can use the standard mileage option or the actual expense option. Check out a full breakdown of the two to determine which one you should use in this guide.
Using an app or tool to track your mileage is a great way to accurately record your business miles. It’s often more trustworthy than a personal, hand-kept log. As such, check out apps like MileIQ to help you avoid any “red flags” in your return.
Unpaid invoices: If you provided a product or service to a client, but didn’t get paid, keep track of the unpaid invoices. You can deduct them as a business loss if you already recorded the invoice as income for the year.
Get All Potential Deductions
Using online tax software like TaxAct is a great way to ensure you don’t miss any deductions when you file taxes. The program walks you through every deduction available to your specific tax situation so you don’t leave any money on the table. It takes the guessing game out of the tax filing process. While working with the right tax software is important, staying organized all year long is critical to minimizing your tax bill as well.
Organize Your Finances Now
Don’t wait until the new year to get your finances in order. That is how you miss out potential deductions. When your taxes are due (remember, you have a different pay schedule for taxes, which you can learn about in How to Calculate and Make Estimated Tax Payments) you’ll have everything in one place. Consider using the following tools. Both make it easy for bloggers and freelancers to stay organized.
- Shoeboxed: This is a great tool for managing all of your expenses. Use it to scan receipts, track mileage, organize expenses and more.
- Wave: This free tool makes it easy to organize business-related finances, including categorizing all of your income and expenses. You can also generate and download reports, making taxes and deductions easier to manage and catch.
Spend Less on Taxes With Deductions
Hold on to more of your money by taking advantage of all the tax deductions available to you. Use this guide to help you find every opportunity. And don’t forget to start organizing your documents as soon as possible. Use a financial platform like Shoeboxed to help you tackle your taxes like a professional.