As someone who has written quite a few blog posts, I have seen the trend that blogging and other social media platforms have worked their way into the business scene. However, it’s still something that other more traditional business owners sometimes overlook, especially in the owners’ initial enthusiasm to get their ideas and products out to the public.
The bottom line, literally, is that you need to run any business like a business; that is, to make money.
Jim Yih, the founder of Retire Happy blog (which has morphed into a full-fledged business beyond its Web log origins) talked about the business of blogging at FinCon12.
Among the principles that Jim addressed was planning. He focused on the groundwork of starting your own business and how crucial solid tax planning is for any business.
One tax area where planning can really pay off is deductions.
Every small business relies on deductions to lower taxable income. So for my fellow bloggers, as well as for other small business that have an online component — which is 99.9 percent of them nowadays — here are some tax deductions you should consider claiming:
- Domain registration fees
- Web hosting fees (monthly, annually, etc.)
- Internet access charges (you have to get online to add to, work on the site!)
- Design fees, e.g., your website, logo, specialty logos for a post or product
- Consultant fees (paid to, for example, many of the designers, SEO — search engine optimization – experts and blogging platform specialists) to set up or upgrade your website and/or blog
- Software, e.g., design programs such as Photoshop, animation features, audio/video programs for podcasts
- Phone charges, i.e., long distance related to running your blog/business website, as well as a second phone line specifically for your business
- Computers, including mice, keyboard and printers
- Web cameras, tripods, lighting, etc., to help showcase your posts or products visually
- Conference fees and travel costs to the events
Told you they were easy write-offs!
You can find more blogger/business deductions at:
Official deduction suggestions: Uncle Sam even has some deduction tips for you.
The Internal Revenue Service’s Schedule C, which sole proprietors file with their Form 1040 each year, breaks out deductions by categories. You’ll find details about these write-off areas in the Schedule C instructions.
The IRS also has a great small business tax calendar and other tools for business owners.
Here are the three most important words when it comes to deductions: Document, Document and Document.
While you should take every single self-employed/business tax break to which you’re entitled, make sure you have documentation for the deductions.
The IRS knows that the easiest way to cheat on your taxes is to run your own business. So it’s looking for any chance to audit your return.
And if an IRS examiner questions your claim and you don’t have the paperwork (which can be digitally saved) to back it up, your deduction can be automatically disallowed.
So hang onto those receipts and work logs and all other material to support your deductions. And then claim them with confidence!
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.