Tax Deductions and Blogging—What You Need to Know

For many years, I’ve worked full-time in Web content development and management, but I’ve always run a freelance writing business on the side—an article here, some Web copy there—and of course, blogging about fashion here on Grit & Glamour, and occasionally on other sites.

All taxes and no shoes is no fun. Lorissa in leopard by Sam Edelman.

Since blogging yields some taxable income for me, it is a business, albeit a tiny one that I’d love to grow. Writing for G&G and other sites makes me happy, keeps me creative, and because it’s a small business, enables me to deduct expenses related to it.

Yes, I just wrote that.

You may not be aware of this, but if you generate income from a blog, you may be able to take tax deductions for expenses related to your blog endeavors. Of course, I am not an accountant or a tax advisor, and you should consult yours for tax advice.  But I am a freelance writer, and today’s topic isn’t shoes, but taxes—though I did include a couple sweet pairs, to keep your attention. 🙂

Are you blogging as a business or as a hobby?

How do you know what can be deducted, or how much? The first question you need to ask yourself is whether you are a hobby blogger or a pro blogger, because ultimately, the answer to that question determines what deductions you can legitimately take. You can download tax software that can help aid you in the tax preparation/deductions process. But making money from a blog doesn’t necessarily make you a pro blogger, so how do you determine which category of blogger you are?

In his article, 7 Things That Every Blogger Should Know About Tax, Darren Rowse explains the difference between business and hobby bloggers:

“Blogging as a business is different from blogging as a hobby. A business is considered a serious pursuit; a hobby is something that you do for fun. If the IRS believes that your blogging is a hobby and not a business, you may only deduct expenses to the amount that you have income. In other words, if your blogging income was $100 for the year, you can only deduct $100 of expenses. If you’re operating as a bona fide business, you can carry forward expenses that are in excess of your income (that’s a good thing). Generally, to be considered a business, you need to hold yourself out as a business and act with the expectation of making a profit (you don’t have to actually make a profit every year, just expect to make a profit).

You can have fun as a blogger and make money, too. Your specific level of interest and time involved in making it a profitable venture will be reflected in your tax reporting. There’s nothing wrong with being a blog hobbyist—it makes the reporting easy. But if you’re planning to blog for a living, then act like it. Be business-like. You’ll impress those in the blogging community and make the IRS happy at the same time.”

The interesting thing about tax deductions for freelancers and bloggers is that there really are no set-in-stone guidelines. The only thing you must do is make a profit, or intend to make one. But to avoid getting yourself into hot water with the tax man, it’s important to talk to a qualified account or tax advisor.

What tax deductions can I take?

You’d be surprised how many deductions are possible, especially if you’re blogging as a business. The following list is an excerpt of 46 Tax Deductions that Bloggers Often Overlook, also by Darren Rowse:

  • Monthly hosting fees
  • Annual domain costs
  • Design/logo Fees
  • Internet access fees—this clearly includes DSL and dial-up, but don’t forget charges that you might pay away from your home or office such as wi-fi charges in Internet cafes
  • Paid blogging platform charges (such as Typepad monthly charges or “add ons” through WordPress)
  • Design or word processing software—this includes Photoshop, Illustrator, Word and similar programs for business use
  • Computers
  • Keyboards, mice and other periphery
  • Web cameras
  • Digital cameras—and memory cards
  • Blackberry, Treo, iPhone charges
  • Business cards
  • Web advertising – text and banner ads
  • Prizes for giveaways and contests
  • Transportation—this includes mileage for car transportation, train and bus fare for public transit, cab fare, airline tickets
  • Dining while away on business
  • Hotel charges for overnight conventions and business travel
  • Professional advice (from lawyers, accountants and tax preparers)
  • Office supplies—pens, folders and post-its can add up!
  • Books, magazines and subscriptions
  • Professional affiliation and membership dues
  • Conference fees—such as for BlogHer and BlogExpo

That’s a pretty comprehensive list, but there are actually even more deductions you can take. Be sure to review these additional resources:

Tips for Taking Tax Deductions

Think you may want to take deductions related to your blog or freelance expenses? Here are some pointers to help you get started:

  1. Talk to a pro. I’m no accountant—but I have a very, very good one who has saved me a lot of money by advising on what I can itemize as a blog-related deduction, and what I can’t. I also prefer to pay her to prepare my taxes (I’m a writer…are you kidding me? I’m hopeless at math). It’s a worthy expense—and also 100% deductible on your next return.
  2. Set up an accordion file to hold tax paperwork. Since you need to retain documentation for the entire year, you may have a lot of paperwork. You need somewhere to store everything from receipts to mileage documentation.
    $$$ saved = NEW SHOES. Leigh bootie by Jean-Michel Cazabat.
  3. Save your receipts. For everything. To take deductions, you need proof of your expenses, and a way for an accountant to tally it all up. That means you need to save receipts from Target showing your fashion mag purchases as well as receipts from your blog hosting service. Save everything.
  4. Show proof of income. More paperwork for your accountant. Check stubs, Paypal receipts, emails—whatever you have that shows that you made money also needs to be submitted at tax time.
  5. Keep track of your mileage. If you’ve driven anywhere to cover an event, promote yourself, or do research for something you’re covering on your blog, you can deduct your mileage. You can actually manage this retroactively by putting your starting address and ending address in Google directions—it will give you total mileage. Print the route, and remember to double if it’s round trip.
  6. Print a tax deductions checklist. Several of the articles I referenced above could serve as checklists. I like to refer to a checklist periodically so I remember what paperwork I need to put aside as the year progresses. There are so many possible deductions, and seeing the list jogs my memory.
  7. Prepare for tax time the entire year. Don’t wait until April (U.S.-based bloggers) to start tracking down receipts. If you just paperclip them together by category (e.g., equipment, subscriptions, office supplies) as you go along, then they’re practically ready to go when it’s time to file. Nothing worse than spending entire weekends pulling your house apart and hair out trying to make that April 15 deadline.

Again, I’m not a tax advisor or accountant, so I can’t answer any questions related to tax deductions. But I do welcome your comments, and appreciate them very much!

118 comments

  1. I’m just a hobby blogger but I’m certainly working to keep my blog growing and I always enjoy the topics you bring up such as this one because it makes me think about the future of my blog!

    Thanks for sharing your wisdom as usual!

  2. Thank you for your kind words lovely, it was totally ‘apisteuto’, but what’s done is done and like you said, (I feel awful saying this,) but i sure hope Karma come back to them!

    I love your distraction technique by having that pic of shoes! Certainly got my attention. Brilliant and informative post as always. As someone who has also freelanced, it can seem a pain stashing away receipts or working out what you owe/what can be deducted but getting an account sure makes things a smoother ride. It’s totally worth it if you are someone who makes an income via blogging.

    On receipts: I use a A4 folder with divided sections, so I just file the receipts in the relevant sections which makes filing for a tax return so much easier.

    x.o.x.o

  3. Awesome article! I think this is great. I think it may be too late for me for this year since I didn’t save all my paperwork, but I’ll keep it in mind for this coming January when the new fiscal year starts!

  4. This was super helpful especially for someone like me who started freelancing a few months ago. I think to help keep things easy for me when it comes to tax time is keeping all of the money I earn from my freelancing (and soon the blog) I put it all in a separate checking account and only use it for blog related things I need to purchase.

  5. GREAT article! i used to run a wedding website/blog and filed a small business tax return (i think that is what it was called) and was able to write off several of the items you listed. i am going to print this and bring it to my tax preparer this year. while my new personal blog is more of a hobby and i haven’t generated much income, i have received gifts (c/o items) or items to review so i am curious how that will all pan out. again, thank you so much V for such a great article that i don’t think many people would even think of!

  6. This is why I love you, not only do you wear super cute outfits but you are about your business and you are willing to share the knowledge! Thank you for this post really helpful. I was already keeping track of all of my expenses so I can include them year.

    Veronica

  7. Great article on this! Since I’ve been freelancing for a couple years I totally take advantage of this. Also, on occasion my tax filer has said I can deduct some clothing/makeup expenses for things that went on the blog. Granted you can’t deduct everything that you bought that year, but you can do a number of things, which will also work to decrease your taxable income. – Katy

  8. Great advice and break down. I’m definitely a professional blogger and a freelance writer (I claim those earnings) but have yet to take the plunge and claim any blog earning on my taxes, since they are minimal. This seriously has me rethinking my structure and how to legalize my blogging business.

  9. Just started blogging last week so not a professional at all. This is a great article. Something to think about 🙂 First look at your blog and will definitely be back… Thanks!

  10. You mean business! Thanks for this great advice. There is so much to claim. I hadn’t thought about it, but I will in the future if I decide to monetize my blog somehow. In business, you just can’t be shy to claim things and speak up when you know you are owed.

    I think getting enough traffic to have a true business is the biggest battle.

  11. This is such an informative post. I am a hobby blogger but would love to be able to tax deduct some blogging costs one day. Thanks for taking the time to write it all out in such an understandable fashion.

  12. One of the many wonderful reasons I read G&G, excellent posts like this. Unfortunately I had to learn the hard way when I was younger, because of doing so much freelance, but so happy I learned quickly because I use these tips for side work. Also when you do freelance stuff in different states/countries… Uggh, that’s the kicker!
    I agree & totally recommend a great accountant, & happy to have one in the fam who has aided me in the right direction. Perhaps, one day I’ll take it to the blog. Thanks V.

  13. This was so helpful! I’m embarrassed to admit but my mom does my taxes so I’m still so new at learning what matters with this stuff.

    Question – do you have to do a full itemized tax return to include these types of things? I take in a little advertising revenue, but pay for hosting, supplies, etc. I’m wondering if there’s a benchmark for when it’s worth it to do this and make your taxes more difficult. Does that make sense?

    1. Rachael, thanks for your comment. As i noted in the post, I cannot answer questions related to tax preparations. That’s one for a professional tax preparer! I have not idea about these things. I just hand my receipts to my accountant, and she works her magic. 😉

  14. When I finally turned blog to business (its official yippee!) a few months ago…I scheduled a sit down w my tax guy…it is such a grey area and I don’t want the IRS knocking on my door….they never give up…..lol.
    This is a great and informative post…that many bloggers should think about.
    And thank you for including some hot as hell shoes in the post to keep us fashionistas interested.
    C

  15. I think this is something I’m going to give a bit more thought to next year… once I’m done with University and have my nights + weekends to myself again! It is definitely something that bloggers need to think about!

  16. I’m also a freelance writer, and I’m lucky enough to have a CPA for a dad who helps me with this. He likes to impress upon me, though, that I can’t write off clothes. :/ Thanks, dad.

  17. Hi V!

    First off, thank you SO much for this. It’s eerie how well you read my mind. I’ve been thinking about this lately, as I’m just now starting to generate income. It isn’t much, but I did start to think, “am I supposed to be saving this stuff for tax time?”

    Secondly — and I know you said you don’t have all the answers to tax questions, but I thought I’d give this a shot — can I deduct something even if I don’t have the receipt?

  18. What a brilliant post, V. At year end it’s so hard to recall all that’s happened in the past 12 months so keeping receipts and accounts makes perfect sense.

  19. I have a demanding career which I adore. Blogging is a hobby for me.
    So I’m not tempted by the lure of “Freebies” and so forth. Excellent tips for professional fashional bloggers though.

    1. Hi Lindsey, thanks! Absolutely not just for the big leagues! Knowing your rights in terms of taxes, deductions, copyrights, etc., is smart…and applies as indicated in the post. If you’re making a buck or trying to, it doesn’t matter how big or small your blog is. You DO have a lot of deductions you can likely take, especially in the first few years.

  20. I am delighted to see this topic! As a California Registered Tax Preparer, I get these kinds of questions all the time from my clients who have small businesses of their own.
    I have to admit finding a way to include dry topics like these into a “fashion” blog seemed like an impossibility and something I would overlook for my own blog, but I think you hit the nail on the head with this post.

  21. I have recently started a fashion blog and I was wondering if it is acceptable to deduct clothing, shoes, and accessories that I purchase, for the purpose of having something fashionable to wear in pictures that I post to my blog?

    1. Ana, I cannot provide accounting or tax advice, but I’m pretty sure only items purchased for giveaways can be deducted. You should Google…there is a lot of info out there!

  22. Great article, thanks for sharing! I’ve always been interested in blogging, but I’ve never had the time to do it. This is a great information that I didn’t know. I would love to read some of your other posts in the future, thanks again for posting!

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