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I'm so glad you are here. I'm Elizabeth and this is the blog. This is the space I tend to. The place I share my heart and our stories. I pack these pages full of tips, stories, adventures, travels, outfits, and recipes. It's a little bit of everything and a whole lot of me. My hope is that these words & photos would encourage & inspire you. That being here will brighten things at least a little bit. Please stick around & explore. There is something here for everyone! Click through the categories below for more! 

Blog Taxes: How, What, Why?

Blog Taxes. Everything you need to know about filing taxes as a bloggerWHO: Blog owners & operators that make more than $400 a year (including all those product payments in  reviews & giveaways!) EVEN if blogging or owning an etsy shop is not your full time job!

WHAT: When doing your taxes you need to account for the money you made off your blog as well as your other job(s)

WHEN: Taxes are due April 15th so make sure you sit down to get them done before hand! The sooner you turn in your taxes, the sooner you can get your refund! YAY.

WHERE: I recommend making a little work station at home with all you tax documents, receipts, and blog information and carve out a couple hours to get it all taken care of and done with!

WHY: Because the government wants to know how much you are making and wants to make sure you are playing by the rules.

HOW: I am not claiming the title “expert” on any of this, but I want to share with you what I learned from doing my blog taxes for the first time ever this year. I hope it helps you feel more comfortable about the whole blog taxes thing and helps you stay organized and on top of things for future years.

I had no idea I needed to worry about blog taxes this year. I work full time and I blog as a hobby, the thought to file my blog income was not anywhere on my radar. You can imagine my surprise when my husband was doing our taxes and came across a self employment document talking about needing to file over $400 and he asked me how much my blog made in 2013.

I wish I knew the exact amount off the top of my head. I wish I had a spreadsheet with my earnings and spending but, I’ll be honest, I had nothing of the sort! I looked up my Passionfruit account, racked my brain for all the giveaways & reviews I had participated in 2013, and spent a good while looking through my PayPal account history. It was a process but I got the biggest things from 2013 all sorted out and, in the process, I created a pretty great system to keep track of all my 2014 earnings & expenses! (It helps looking at the bright side!!)

 

CREATING A SYSTEM

I know the thought of blog taxes can be intimidating to many (I know it was and still kinda is to me!) but when you create a system, it can actually be easier than you think. In the simplest terms, there are two categories you need to focus on INCOME + EXPENSES. I recommend creating an excel word document or google doc titled “Taxes (year)” with two pages, income and expenses and recording EVERYTHING as it happens.

 

INCOME

On the income page it is important to record all forms of income. For bloggers income can come as money from ads or selling product as well as products for reviews and giveaways and sponsored content. Make sure you are recording what it is, the value/cost, if it is a product or cash, and the date (passion fruit ads payment, $35.34, cash, 2/28/14 )

 

EXPENCES

On the expenses page it is important to record all the expenses your blog costs you. Here you record things like blog maintenance & education (domains, blog designs, new laptop, blog conferences, blog community groups, classes you took, etc.), things purchased specifically for blog posts, giveaways, blog related thank you gifts,  office supplies and office space for blogging, and and pretty much anything that you pay for because you blog. Make sure when you are recording all this information in your spread sheet you are including what it is, cost/value, date, and purpose (lifetime influence network membership, $200, 02/15/14, education).

 

F.A.Q

DO YOU NEED TO RECORD REFERRAL MONEY?

If you receive money for referring your friends to a website (Minted, ThredUp, Stitch Fix, etc) you do not need to record that money anywhere. You would be receiving that money whether or not you had a blog – that is an incentive they do for their marketing (you become their ad!). They write the gifted money off on their side of things but you do not need to worry about this at all when filing your blogging taxes!

WHAT ABOUT GIFTS (no obligation to blog about it)?

If someone sends you a “thank you” gift or a “I love your blog” gift and makes it clear that it is not for a review, it is just for you, then you do not need to record it! Even if you end up posting it on social media, it was a gift and so you do not need to record it. there was no exchange for goods or services (EX. product in exchange for a review).

HOW ARE GIVEAWAYS RECORDED?

Giveaways are a funny little thing in themselves. All giveaways that you purchase the items for will go on your expenses – like if you gave away a $20 Starbucks card and you bought it than it needs to be recorded on your expenses. If the giveaway product was donated (Lindsay Letters gave you a print to giveaway) then you need to record it in two places. It is a source of income because Lindsay Letters is giving you that print to giveaway and there is an exchange for goods or services. BUT it also needs to be recorded in expenses because the giveaway costs you that print. It ends up canceling out but it helps you remember to be recording everything and it also looks really good if you were to get audited (you are showing everything and not hiding anything!)

HOW ARE PRODUCT REVIEWS RECORDED?

If you are given a product to review in a post you need to put that on your income page. If Lulu Lemon sends you a new workout outfit to wear and then share with your readers, that is an exchange of goods and services and counts as a form of payment.

WHAT IF I BUY SOMETHING TO BLOG ABOUT IT?

If you saw that Hello Merch was offering 50% off and you grabbed a new sweatshirt to show off to your readers, you can write that off! You bought the sweatshirt with a blog post in mind and were eager to review it to share your joy with your readers. That experience counts as an expense. Think of things you would not purchase if you did not own a blog (blog planner, stitch fix, etc. ) and record those under expenses. Don’t go crazy over board with this – stick to purchases that are honestly for you blog and that you use blog money for (not personal allowance or fun money). If you go overboard on writing everything off (coffee for my blog fuel, my $1000 bed for my blog dreams, $15 wool socks for my feet in the winter when I want to blog on the couch…) you make yourself a target for the IRS.

TIPS & TRICKS

1. Even if you make under $400 on you blog (or etsy) I encourage you to create a google doc tracking all your income as well as all your expenses. It is a good practice to get into and also makes you aware of what is really happening with your blog monetarily. It is also great just in case you have a wonderful year and end up making more money than you ever imagined. If you already have it all recorded it is easy to file it with your taxes!

2. I recommend Turbo Tax for everything. Do all your regular taxes (your other jobs, husband’s job, giving, loans, intrest, ect) and then they also make a space for you to enter your self employment. Thank you Turbo Tax

3. Consider how much of your office space (gas, electric, water) is being used for blogging and put that amount on your expenses. PS: also be wise about this don’t go crazy overboard with deductions.

4. Don’t be alarmed if your expenses are larger than your income at the end of the year. For the first three years the IRS expects that trend in a small business but the goal is to eventually make more than your expenses (it would be nice to have some take home, huh?!)

5. Enjoy the process! I know if sounds crazy to work on your taxes but it is actually pretty fun seeing where you money is going and how it is being spent. You spend so much time and energy on your blog – you should take care of it!

6. Use Turbo Tax. We’ve done our own taxes at home every year with the help of Turbo Tax. They walk you through all these things!!

*Please do not take my words as truth. I am not an account or government tax employee. I am just a girl who works at a non-profit, loves people and blogging, and is trying to be a good citizen and file all my income.

** If you see something wrong please correct me! I don’t want to be doing it wrong for the next forever and teaching everyone else to do it wrong as well!

WHAT IS YOUR BLOG TAX ADVICE/ METHOD?!
Let’s figure out this money thing together!!
  • Thank you for this! Sometimes the whole tax thing can seem overwhelmingly complicated! You're making me happy that I didn't earn $400 on my blog last year, but I better keep closer records this year.

  • I do know that for office space, you can only actually apply that as an expense if you have a specific place designated ONLY for that purpose and if it's a larger square foot of your total space amount than like 10% or something. I know because I asked an accountant about that for my freelance editing. We live in an apartment, so my desk area is a really small portion of our apt. Also, I use my desk area for stuff other than just freelance editing, so I can't count the square footage (and thus electric, water, etc.) as a business expense. Anyway, I definitely didn't make more than $400 on my blog, so that's good. I have enough stuff to enter on my taxes. Like FIVE W2s and 3 1099s. Good grief! I use FreeTax USA for online taxes.

  • yuck. taxes are the worst. thank goodness i didn't make over $400 last year because i. did.not.keep. up. at. all. i do need to start keeping up with everything for this year, though. just in case 🙂 p.s. i have been eyeing that sweatshirt for quite some time, but it is pricey!

  • So do we have to actually make ourselves a "small business"? Like get an LLC or something? Crazy.

    • Beatriz

      I am wondering the same thing as I read through this post. I wonder if anyone will respond to this question.

      • Oak & Oats

        Hello! Thanks for asking. I currently am still using hobby income when recording my taxes. This year Turbo Tax moved it to small business because of the amount I made. However, I still have not registered as an LLC – I operate under my social security number still. I have not done much research on LLC and I am looking into that now in fact as I am completely full time as a blogger. I believe you have 4 years of making a positive income (like gross – deductions and still being profitable) before you have to get an LLC. But that is something I want to look into and I will publish a blog post on that once I figure it all out. These are just the taxes details I’ve learned and put into practice. Thanks for asking Beatriz!

  • this is SO great!!! i don't make money from my blog, but i'm an accountant & this is such a great system you have set up!!
    also, TurboTax is the BEST thing ever!!! i do my taxes on TurboTax every year and definitely recommend it! 🙂

  • just read Amanda's comment about the office space… she's right in that you can only file it if it's only used for that specific purpose!

  • I'm with Robyn on this, my little blog doesn't make anything right now, but hopefully this will come in handy in the future!

  • Alisha B.

    These are great tips!! Thank you! Do you know if you have to register your blog as an actual business before you file?

  • What a reliefs that they don't want info for anything less than 400. I have enough things going on with taxes already lol.

  • i am coming to you with all my accounting questions from here on out 😉

  • This is great info! This is also all true for other sorts of freelance income. I was able to write off a lot of things as a freelance graphic designer, things I would have never thought of! 🙂

  • Just discovered your blog through the Passionfruit Marketplace. This was SUCH a great post to land on for my first visit 🙂 Love your layout and writing style! Thanks for the tips!

  • I'm coming to you too! 🙂

  • Great tips! You covered so much, which is awesome! We use Turbo Tax too. Amazing!

  • Thank you for this! Quick q: do I need to file blog taxes if I don't own my blog (I'm still a .blogspot.com)?

  • ha! 🙂 of course!! feel free to email me anytime!!

  • most definitely! 🙂 email me anytime!!!

  • Great tips! Thank you!

  • Beth, you most be reading my mind. I was just thinking about taxes and what I need to include. Mine are complicated due to state residency issues and then having my full-time job, freelance work on the side, the blog, and then charity. I think for this year, I have not made $400 on the blog, but next year I will definitely need to use this. It sounds like the product values count as actual money even if no money was actually exchanged?

  • Totally pinning this for later!

  • Girl! i do that all the time! I LOVE pinning things to come back too!

    http://www.oakandoats.com

  • yes! I think it is good just to keep track of it anyways – even if you don't have to file 🙂

  • PERFECT! great to know! I know that my husband can do that because he has an office and home that he works all day from but I have a couch, a kitchen table, and a bed that I blog from so mine is not concrete and I wasn't even going to mess with it! lol

  • also, I get you on the tons of W2 things! my husband did his one first and then said "now time for Beth's mess – 3 W2s (down 3 from last year) and my blog 😉 haha!

  • yeah! It is good just to keep track even if you don't have to file! then you know where your blog money is going!

    and I got the sweatshirt of the 50% off sale!

  • I am not quite sure about this one… I don't think so but you might want to ask @Robyn Black – she is a real accountant!

  • yes! I think the biggest part is keeping track. no matter if you make a lot or just a little it is good to see where your money is going – how much you are spending on advertising, how much you are making in giveaways.. etc. then, if you ever have a great year and need to file you are in the clear!

  • yeah! I love that 🙂 it is fun 🙂 you do not always remember that if you worked somewhere they would be buying your paper clips and paper!

  • yeah! Amy! so good to "meet" you! Thanks for the sweet compliments!

  • I agree girl! and I think organization is KEY

  • If you make over 400 on it than yes! It doesn't really matter if you still have a blogspot url or not. I pay for my own url just because it looks nicer and is easy to remember but I still blog with blogger 🙂 It is just personal preference!

  • you are so welcome sweet girl!

  • haha! I know crazy taxes! That totally makes sense! Detailed records will help you SO MUCH! and yes, product values count even if no money is exchanged. IT is payment for services (EX: this shirt from them for a post about it on your blog) You put that on the income portion.

  • yes! I do that all the time!

  • now everyone will be coming to you with tax questions 🙂 Thanks for offering that information 😉

  • perfect! thanks for your accountant brain!!

  • Christina Main

    What a great post! I mean…really. So informative and really confirmed a lot of what my husband and I were already doing! Phew! So great to read we're doing it right! One tiny thing- and it's totally tiny…but you should begin to start treating your blog as a business AS SOON AS you start receiving money. Yes, you won't owe SELF EMPLOYMENT TAX until you reach $400, but regardless of how much money you make from your blog, you DO have to report that amount and pay federal AND state (If applicable) taxes on it. The IRS is a sneaky sucker and they want to know ALLLLL About any and all income coming into your household. So my advice would be- if you're making ANYTHING on your blog- report it. Better safe than sorry. 🙂

  • GREAT post!

  • Louie Donovan

    That’s wholesome article, what is the income threshold for non-taxable or taxable income? tax preparation huntsville

    • I say, report it whenever you make any money on your blog! you can do it with your hobby money. keep track of your income and expenses now.

  • Louie Donovan

    That's wholesome article, what is the income threshold for non-taxable or taxable income? tax preparation huntsville

  • I say, report it whenever you make any money on your blog! you can do it with your hobby money. keep track of your income and expenses now.

  • i ran in to this problem last year. oh shit i didn’t keep track of anything! these are great tips 🙂 also your photos on this post are adorable. especially the chalk boards!

  • Bri

    i ran in to this problem last year. oh shit i didn't keep track of anything! these are great tips 🙂 also your photos on this post are adorable. especially the chalk boards!

  • lol! I know it!

    Thanks!

  • So I love love love GoDaddy Bookeeping (formerly Outright, I think it was called). I take pictures of my receipts and then log in the information on my phone, since I am absolutely horrible with paper.

    I can also track income on there as well, and since they have an app, its easy to do on the go!

    • Oh fun! That is great! Yeah. So far in my blog world I have never had a paper receipt! I have them all saved in emails!!

  • Now this is the post that just made my head hurt!…and helped me a lot at the same time, lol. I really need to spend some time working through my expenses and income when I get some time. Okay, let me change that into a more “Lara Casey” type way of approaching it: “I will make some time tomorrow during my lunch break to write out my expenses and income regarding my blog this so far this year.” …much better, lol. Thanks for the tips! xoxo

    • proud of you for the positive spin. It is actually pretty simple when you start making it a part of your everyday! Everything that comes in or goes out I just immediately add to my spreadsheet!

  • Now this is the post that just made my head hurt!…and helped me a lot at the same time, lol. I really need to spend some time working through my expenses and income when I get some time. Okay, let me change that into a more "Lara Casey" type way of approaching it: "I will make some time tomorrow during my lunch break to write out my expenses and income regarding my blog this so far this year." …much better, lol. Thanks for the tips! xoxo

  • proud of you for the positive spin. It is actually pretty simple when you start making it a part of your everyday! Everything that comes in or goes out I just immediately add to my spreadsheet!

  • Oh fun! That is great! Yeah. So far in my blog world I have never had a paper receipt! I have them all saved in emails!!

  • Thank you SO much for this! This year I don’t have to do anything with my blog for taxes because I spent more than I made. But I’ve been making a lot more this year already, and so I know I will have to figure it out next tax season. Pinning this to refer to next year!

    • YES! I am glad you were encouraged! Make sure you are keeping track as you go – that is the best way to set yourself up for success!

  • Thank you SO much for this! This year I don't have to do anything with my blog for taxes because I spent more than I made. But I've been making a lot more this year already, and so I know I will have to figure it out next tax season. Pinning this to refer to next year!

  • Beth! Thanks so much for pointing me to this post! So so helpful! Definitely some things I didn’t know or didn’t think about…and as always, you broke everything down in a totally manageable way!

  • Beth! Thanks so much for pointing me to this post! So so helpful! Definitely some things I didn't know or didn't think about…and as always, you broke everything down in a totally manageable way!

  • YES! I am glad you were encouraged! Make sure you are keeping track as you go – that is the best way to set yourself up for success!

  • YAY! Be encouraged. You can totally rock the blog taxes!

  • Hi, thanks for the tips.

    • Oak & Oats

      Of course! let me know if you have any other questions!

  • Great post! As a new blogger I have already considered this, but I never see posts on it. Thank you for sharing. Here’s to having more income than expenses! Cheers