This article tackles the un-fun topic of taxes from a blogger’s perspective and was inspired by a campaign supported by Lifelock.
It’s that time of year when bloggers across the United States question whether or not they should just quit blogging. All of a sudden they are actually earning an income from their blog and are faced with the idea that their hard earned money isn’t all theirs. When you work a regular job, usually taxes are taken out with each check so it doesn’t feel as much like you have to give money away that you worked hard for, and often, you even get a refund on what you paid in.
But one thing I always keep in mind when it comes to taxes as an independent contractor, is that they never take ALL of my money, in fact, they really only take a small percentage. So to consider quitting because of a tax burden, just doesn’t make sense. One suggestion to overcome this is to put 20% of your earnings in a separate account to pay for your taxes at the end of the year. I bet you will find you have money left over after you pay the IRS, especially if you have taken deductions.
Did you know that just as your blogging income is taxable, many of your blogging expenses are deductible, and often as a dollar for dollar deduction – meaning that every dollar you spend on blogging, your taxable income is reduced by a dollar. I recommend consulting an accountant or tax professional to make sure you maximize your deductions so that you only pay what you owe and not a penny more.
A lot of bloggers, however, don’t realize the extent of what they can possibly deduct on their taxes. Again I stress the importance of a tax professional to take full advantage of the laws, but below is an infographic that discusses tax deductions for bloggers so that you have an idea of what you should be keeping track of during the year.
Now that you have some pointers for getting the most out of your taxes, don’t forget to be smart when filing. Identity theft is one of the biggest complaints around tax season so you need to protect yourself. Lifelock has some great tips to help you protect yourself against identity theft, and if you take the Lifelock for Life quiz on their Facebook page you will be entered to win one of nine Lifelock annual memberships and a monthly grand prize of a $1,000 VISA Gift Card.
Earning an income as a blogger doesn’t have to feel like you are handing over all of your earnings to the IRS, you just have to know where you can take deductions and where you can’t. Proper planning and tracking during the year will make it easy to do your taxes or deliver the information to your accountant. Combine that with making sure you don’t expose yourself to potential identity theft situations, and taxes can be less painful than we expect.
Or at least less painful than a root canal.
Are you a blogger?
Did you realize the extent of the deductions you can take when filing your taxes?