As a blogger here for the past 6+ years, I’ve been using a combination of practical tax tips for bloggers (informed by my CPA), paired with just a small handful of useful, free and inexpensive tax tools to manage all of the tax implications of running my blog business. The overarching theme? It’s not difficult to learn how to do taxes on your blog income—and we’re going to walk through all of my tax tips for bloggers here today.
By now, I’m assuming you’ve probably started a blog, began reaching your target audience, figured out how to promote your content—and your blog is now beginning to make some money (or you’re at least planning for that eventual outcome).
Now comes the responsibility that many small business owners in the blogging world tend to dread—taxes for bloggers.
First, the answers to a few of the most pressing blog tax questions I’ve been asked by readers over the years (click to expand each answer).
Do I need to pay taxes on my blog income?
Yes. If you’re earning any income from your blog, it qualifies as self-employed income under the guidelines of the IRS. This includes whether or not you’re operating as a formal business entity (like a sole proprietorship, corporation or LLC), or simply just doing informal business and collecting some revenue—even if your blog is a part-time endeavor. Put simply, if you collect any income from your blog, you will almost certainly owe taxes on that income.
What kinds of taxes do I need to pay on my blog income?
By operating a blog business of your own, we’ve established that you’re self-employed (even if your blog is a part-time, side business). As a self-employed individual, you’re required to (1) file an annual tax return and (2) pay estimated taxes each quarter. We go into these two subjects in much more detail throughout this guide. On top of just your blog income tax though, self-employed individuals are also responsible for paying self-employment tax (SE tax). SE tax is a tax for individuals that work for themselves, and is designed to cover the costs of Social Security and Medicare, which is a corresponding tax equivalent that’s normally withheld from your pay check in a traditional job.
How do I calculate the taxes I owe on my blog income?
First and foremost, it’s safe to assume that if your blog earned anything, you’ll have to pay some taxes on that income. More specifically though, you’ll have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you’ll still have to file an income tax return if you meet any other filing requirements though (which you probably do).
Before determining if you’re subject to self-employment tax and income tax from your blog earnings, you have to calculate your net profit or net loss from your blog business. You’ll do this by subtracting your business expenses from your business income. Here’s the equation for determining your taxable blog income:
Total Blog Income – Total Blog Expenses = Net Income (or Net Loss)
If your expenses are less than your income for the year, the difference is considered net profit (you made money) and becomes part of your taxable income for the year. If your expenses are more than your income, the difference is considered a net loss (you lost money on your blog for the year). You can usually deduct your losses from your income on your tax return, which helps reduce or eliminate the amount of taxes you’ll owe, but in some situations your loss is limited. The IRS has a more detailed tax guide for self-employed individuals to calculate your exact tax liabilities here.
Disclosure: This article should not be considered tax or legal advice, as I am not a tax professional or attorney. These are simply my best practices for how I personally handle the taxes in my own blogging business, which has been shaped by consultation with my CPA. Please consult with a CPA or attorney to get advice specific to your business.
Fortunately as I’ve already alluded to, keeping track of your taxes doesn’t have to be overly complicated, and with the right systems & best practices in place, it’s pretty simple to manage. That being said, there are a few essential concepts that are necessary to understand when it comes to paying your blog taxes properly (in order to avoid misstepping in the eyes of the IRS here in the U.S., or your local tax authority equivalent elsewhere). Luckily, this isn’t a challenge that needs to keep you up at night.
In this guide, I’m going to share with you all of my own best practices about managing taxes for bloggers. And don’t worry, even if you’re not a “numbers person,” this process isn’t as painful as you might imagine.
Taxes for Bloggers 101: How to Do Taxes on Your Blog Income (Blog Tax Tips)
Define What Kind of Blog Business You’re Operating
Choose Which Legal Entity to File Your Blog Taxes Under
Open a Separate Bank Account for Your Blog Business
What is a 1099-MISC Tax Form (Taxes for Bloggers)?
Keep Thorough Records For Your Upcoming Blog Taxes
Use Tax Deductions to Your Advantage as a Blogger
Understanding Estimated Taxes (Paying Quarterly Estimates)
The 3 Best Tools to Use in Managing Your Taxes for Bloggers
When Should I Hire a Tax Professional?
Disclosure: I’m big on transparency, so please know that some of the links below are affiliate links and at no additional cost to you, I may earn a commission if you purchase one of the tools I mention. Know that I only recommend products I’ve personally used and believe are genuinely helpful, not because of the small commissions I make if you decide to use them.
Now without further delay, let’s get into my ultimate guide to taxes for bloggers.
1. Define What Kind of Blog Business You’re Operating
The first thing every blogger needs to determine when starting the process of doing your blog taxes, is the kind of blog you’re running. There are three stages of blogging that we’ll discuss and differentiate in this section:
Hobby Bloggers (blogging solely for fun or as a creative outlet)
Side Hustle Bloggers (blogging on the side of your day job to slowly grow)
Full-Time Bloggers (blogging as a full-time business)
While each stage here (and progression in your blogging journey) requires a slightly different take on how to practice bookkeeping and manage your taxes, it’s important to remember that anytime you’re making money from your blog—you’ll almost certainly have to pay some taxes on that income.
Don’t forget that, because it can get you into hot water with the IRS if you’re neglecting part of your tax obligations and happen to be audited one day.
Tax Overview for Hobby Bloggers
A hobby blog is one that exists primarily to share an interest, tell stories or document your life. Making money may be a secondary consideration, but it isn’t your main concern.
In the beginning phases of blogging, it may feel difficult to differentiate between a hobby and a business. It’s common for blogs to make little to no profit for the first few months (even years), so determining if you’re hobby blogging or business blogging, is more about your mindset, approach and ultimate goals.
In simple terms, to transition your blog from a hobby into a business, you have to start treating it like a business.
Doing things like accurate bookkeeping to keep track of your blog’s expenses, formulating a proper blog business plan for how you’re going to grow, creating winning habits, maintaining a regular schedule and keeping track of how much time you’ve spent working on your blog can help show yourself (and the IRS) that you’re running a business.
You can also ask yourself a series of questions to see if your business is operating more like a hobby or a business:
Do you intend to use your blog as a means to generate income?
Does your time spent blogging show that you’re making an effort to turn it into a business?
Do you depend on the profits of your blog as a source of income?
Do you make changes to your blog in order to make it more profitable?
Do you expect to make a profit from your blog now or in the near future?
Were you able to successfully make money from similar activities in the past?
The IRS also has more information to help you determine if your blog is a hobby or a business.
Choosing whether you want to operate your blog as a hobby or a business comes with some pros and cons, too.
A hobby blog requires less work and consideration from you overall
It’s still important to keep track of your profits and expenses, but bookkeeping is minimal
On the other hand, a hobby blog doesn’t have the freedom to deduct all expenses from blogging
Here’s a major downside to hobby blogging—you can only deduct your expenses up to the amount of profit you make with your blog. So for example, if you purchased a $1,200 laptop to work on your blog, but you only made $500 in profits for the year, your total deduction allowance will be limited to just $500.
If you’re running a more formalized blog business that has an official legal entity (even if it’s a part-time business), you can deduct all of your business-related expenses each year.
Tax Overview for Side Hustle Bloggers (Schedule C)
A side hustle blog is very similar (from a tax perspective) to a full-time business blog, but it does require a little less work to manage.
If your main source of income is still a full-time job or series of blogging jobs (that technically classify as freelance gigs) which add up to significantly more income than what your blog is generating today, then your tax filing process will be pretty easy and straightforward. You should still be at least thinking of your blog as a separate little business entity—and that means keeping detailed records of all your income and related expenses throughout the year. However, filing your taxes for a side hustle blog is more simple than if it’s a full-time business for you.
If you’re the sole owner of your side blog, then you become what’s known as a Sole Proprietor. Filing your blog taxes as a Sole Proprietor only requires you to attach a Schedule C to your Standard 1040 tax form.
In other words, if your blog is generating a relatively small proportion of your total annual income, you can file your blog taxes along with your personal tax return (on a Schedule C that details your blog-related income and expenses). You won’t need to file a separate tax return for a business entity.
Tax Overview for Full-Time Bloggers (Separate Business Entity)
As a full-time blogger, you’re all in. Your blog is your primary source of income and it’s the thing you spend most of your working hours growing and improving.
At this stage in your development, you’ll want to establish a formal legal entity to operate your blog business under—like an LLC for both the tax benefits and additional legal protections (more on that next). And while it’s definitely an exciting development once you make it to full-time as a blogger, it also comes with more responsibilities in regard to your taxes for bloggers.
When running a formal business with your blog, you’ll be expected to file:
Your personal income tax return (as per usual)
A separate business income tax return
Payroll taxes (if you hire help to run your blog)
There are some notable exceptions to these requirements—like the ability for single member LLCs to file taxes as an individual (making it the ideal business entity for full-time bloggers that don’t have employees) vs being taxed as a corporation that requires a separate business tax return—and we’re breaking this all down in closer detail here below.
2. Choose Which Legal Entity to File Your Blog Taxes Under
How you file your taxes for bloggers, is highly dependent on which legal entity you choose to operate your blog business under.
You can run your blog using one of four types of different legal structures:
Limited Liability Companies (LLC)
This guide on the Quickbooks blog has a more detailed explanation of each type of legal structure a business can operate under, but here are the basics you need to know in order to make the right decision in terms of how you should organize your blog business.
Which business entity should I form to operate my full-time blog?
My personal opinion and experience, is that a Limited Liability Company (LLC) is by far the best legal entity to operate your blog under, once you’re working on it as a full-time business. The primary benefits of forming an LLC to run your blog, is that (1) you can’t be held personally liable for any debts your business incurs or any legal issues your business comes under and (2) your business income won’t be subject to double taxation. You have more protections and will pay overall less in taxes with an LLC, compared to the other legal entities here. If your blog business has no full-time employees, then you’ll be considered a single-member LLC, which dramatically simplifies your tax filing process too.
Now, let’s walk through some of the pros and cons of the various business entities at your disposal when it comes to filing taxes for bloggers (and how to choose the right one for you).
Sole Proprietors can continue to file their blog taxes directly on their personal tax forms (on a Schedule-C), making it a great, easy option for side hustle bloggers. However, this business entity is not advantageous once your business becomes the primary source of your total income. The main drawback, is that operating a Sole Proprietorship comes with a higher risk profile—you personally assume responsibility for all financial and legal obligations.
Requirements vary by state and county, but all that’s likely required in order to set up a Sole Proprietorship, is to register it with your state and local governments.
An S Corporation allows individuals to report their income on their personal tax returns, which keeps things pretty simple from a tax filing perspective. S Corporations are also allowed to have up to 100 shareholders, making this a viable option to consider if you’re running your blog with multiple other people who want to have a stake in the business.
The main reason to consider registering as an S Corporation, as opposed to a C Corporation, is to avoid what’s called double taxation. Double taxation is when a business’s profits are taxed both on the business tax return, and again as personal income once profits are distributed to owners of the business. S Corporations are not subject to this double taxation.
A C Corporation is a corporation that’s recognized as a completely separate tax entity from the individual owner(s). That means when you file your taxes as a C Corp, you’ll be filing two separate tax returns—one for the business and one for your personal income. You will not attach a Schedule C to your personal taxes.
To be honest, a C Corp is generally unnecessary for a blogging business, but I’m including it because it is one of the ways that you can structure your business if you choose. Those who’d benefit most from this legal entity are much larger businesses that have multiple employees and want to take advantage of fringe benefit deductions.
Like S Corporations, C Corps are open to shareholders, but C Corps are eligible for an unlimited number. C Corporations also have to pay taxes at the company level. Currently, there’s a flat 21% tax rate for C Corps, but they’re subject to double taxation—which as a solo blogger would translate into less take home income for you under this business entity.
Limited Liability Company (LLC)
An LLC is the most popular legal structures for blogging businesses to operate under, and it’s the business structure I personally use (today) here with my blog business.
With this structure, you’re not personally liable for business finances or legal issues—and you’re not subject to double taxation. While this business entity is very easy to set up, you will have to pay an ongoing tax in order to operate.
This fee is different in each state, so do your research about your state’s requirements. For example, California has the highest cost to run an LLC—charging $70 to initially file and an $800 annual franchise tax in order to continue operating the company, whereas dozens of states have annual fees that range from $0 to less than $50.
3. Open a Separate Bank Account for Your Blog Business
Another managerial best practice I strongly recommend to bloggers who want to take their blogging business seriously, is to open a separate checking & savings account for all of your business-related transactions.
This’ll help clearly define all of your business-related expenses and profits (which makes doing your blog taxes significantly easier)—and eliminates any possible grey area from muddying up your personal bank accounts. Separating your business and personal accounts not only helps keep things organized, but it gives you a clear idea of what you’re spending and how much you’re taking in.
For all of your blog-related expenses—whether it be the cost of your hosting plans, the various blogging tools you use to operate your business, advertising campaigns or otherwise—I also highly recommend using a separate credit card that you use only for business expenses.
There are quite a few credit cards that give great benefits to businesses, including substantial cash back, large points bonuses and air miles (depending upon which perks are most appealing to you).
The bottom line is that if you keep all of your finances separate, it’ll help big time with bookkeeping and managing the taxes for bloggers—as well as preventing yourself from accidentally spending personal money on business costs.
4. What is a 1099-MISC Tax Form (Taxes for Bloggers)?
Blogging income often comes from many different sources. Therefore, bloggers must also take the time to report every source of income on their taxes.
If this is your first year blogging, you may be wondering why you’re receiving 1099-MISC forms from your sponsors or affiliate companies that you promote (and earn from).
So, what exactly is a 1099-MISC tax form?
If you were previously working for a traditional company in an employer-employee relationship, you would normally receive a W-2 at the end of the year, detailing your earnings, deductions and contributions for the year. Instead, as a self-employed blogger—you’ll receive a 1099-MISC from every company that either pays you or in the case of a company like Stripe or PayPal that processes payments you accept for the sales of your own products and services, a 1099-K form.
As a blogger, you receive a 1099-MISC because you’re self-employed. Some other examples of people who receive a 1099-MISC form include Sole Proprietors, independent contractors, consultants and even freelancers who do independent client work.
What You Need to Know About 1099-MISC Tax Forms
Employees who work for a company receive wages from their employers, right? In that scenario, it’s the responsibility of the employer to take out the necessary taxes on each paycheck. That’s why every paycheck shows a gross wage and then a net wage after things like retirement, taxes, medicare fees and unemployment are deducted before you’re actually paid.
When you’re self-employed, this responsibility falls squarely on your plate. This means that you’ll have to take care of self-employment tax in addition to income tax.
As a traditional employee, you and your employer split the cost of taxes like Social Security, FICA and Medicare. As a self-employed individual, you’re technically “the employer” and “the employee” so are thus required to pay the full amount of these taxes yourself.
A 1099-MISC form is a detailed statement of your earnings from a particular company (whether as an affiliate or contract worker).
And you should receive a 1099-MISC from any affiliate company or client, if you’ve made more than $600 from them throughout the year. Sometimes companies will forget to send a 1099-MISC, but you’re still required to file those earnings as income on your own taxes. Bloggers who receive less than $600 from a particular company are also required to report that income, even if the companies did not send a 1099-MISC form.
Do LLCs and Corporations Receive 1099 Forms?
Earlier in this guide to taxes for bloggers, we discussed the various ways that you can structure your blogging business from a legal entity perspective.
If you’re structuring your blogging business as an S Corp or a C Corp (not very common), then you should not be receiving 1099 forms from other businesses come tax time.
For those of you who’ve formed an LLC to operate your blog under though, the answer is a bit nuanced. Most blog businesses (that aren’t too large) can be safely considered single-member LLCs that don’t have full-time employees, and rather opt to hire contractors for help with certain tasks. For single-member LLCs, you will need to receive a 1099-MISC form.
That being said, there is more than one way to file taxes as an LLC, and how you choose to file will determine whether or not you’ll need a 1099-MISC.
People who file as a single-member LLC will receive a 1099-MISC form
Some people opt to tax their LLCs as a corporation, which will not require 1099 forms
If you’re a solo run LLC, then you’ll receive a 1099-MISC at the end of the year to use for filing the taxes on your blog.
5. Keep Thorough Records For Your Upcoming Blog Taxes
As a small business owner—even if your blog is a side business—you need to keep detailed records of all your income and expenses.
This means you should record every source of income and expense you’ve acquired through your business.
Hands down, the easiest way to do that (in an automated fashion) is by using a blogger and small business-focused accounting tool like Sage 50cloud, which is a cloud-connected suite of tools that offers remote access, intelligent reporting on your finances and time-saving automation. Plus, they’re running a 40% off discount to all new customers for the first 12 months.
Another blogger-friendly accounting tool to consider is QuickBooks Self-Employed (which costs $1/mo for the first 12 months). QuickBooks can connect directly to your business bank (and credit card) accounts to automatically track transactions, categorize them and create reports for your entire business behind-the-scenes without much work from your end at all. It’s what I’ve long used to track my income, expenses and generate reports for my accountant.
Whether you’re using a tool like Sage 50cloud, QuickBooks or not—smart financial management still means you should make a habit of practices like:
Saving your receipts (or taking photos of them)
Keeping track of all your transactions
Keeping a list of all your affiliates and all payments received from them
Maintaining a list of your business expenses
Writing down all profits and expenses in a timely manner
Keeping (digital) proof of all transactions
Maintaining a backup of your Quickbooks Online files
To show my readers that I practice what I preach here, each month I publish a transparent blog income report to illustrate how much I spend and earn from blogging.
Here’s a quick snapshot of just a few of the income sources that contribute to my blog income each month:
Take note that while I have a wide range of earnings from different affiliates, they’re all relevant to keep track of and document when it’s time to file my taxes.
Plus, every incremental source of income adds up over the course of a year—and by tracking which affiliate programs are growing (or paying out higher rates), it can tell me a lot about which types of blog post ideas I should prioritize writing about and the kinds of blog headlines that’ll likely convert best over the coming months (in order to promote higher-paying affiliate products).
Here are some of my blog’s expenses broken down recently too:
It’s important to keep just as detailed a record of your expenses as you do for your income, for a couple of reasons.
You want to know if your blog business is profitable. Account for every expense and source of income (to track your progress and make changes if things are trending downward).
You also want to accurately account for your expenses (so that you can maximize your deductions on your tax return).
Next up, we’re going to discuss how tax deductions work in regard to taxes for bloggers. Deductions can be extremely helpful in lowering your taxable income, but there’s a right and wrong way to calculate your deductions.
6. Use Tax Deductions to Your Advantage as a Blogger
If you’re interested in business at all, you’ve probably heard the word “deduction” a lot, and you may wonder what exactly that means.
In the context of your blog business, a tax deduction or “write-off” is a business expense that you count against (deduct from) your taxable income. In other words, instead of owing taxes for a larger sum of money, your deductions allow you to be taxed at a lower level of income.
Keeping track of your expenses is a fundamental part of running a business. Each business expense that you accrue has the potential to be deducted from your taxes.
So for example, using round numbers let’s say you made $100,000 in profit. If you had zero expenses, you would be accountable to pay taxes on the full $100,000 that you made that year. That means you had $100,000 of straight profit—which isn’t a very common outcome.
It’s rare that any business has no upkeep costs. Almost every small (or large) business costs something to keep running.
Using that nice round number again, let’s say that you made $100,000 in income, but your blog cost a total of $40,000 (in expenses) to run. Assuming all of those $40,000 in expenses are classified by the IRS as deductible, it means you can “write down” your taxable income to $60,000… therefore reducing the amount of taxes you’ll pay at the end of the year.
To be fair, this is an over-simplified explanation and there are factors that can make this process more complicated. In theory, though, each business expense you have can possibly lower your taxable income.
What Can Bloggers Deduct From Their Taxes?
The first bit of advice I give to bloggers (and any business owner), is to be reasonable with your tax deductions. Not everything you spend money on as a business, has the potential to be deducted—and being too loose with your deductions can land you in hot water with the IRS, should you be audited.
The IRS describes legitimate deductibles as both “ordinary and necessary.” That means that the expense must be common to your type of business and necessary for the work you’re doing.
Personal expenses cannot be deducted unless they’re also clearly used for your business somehow. In this case, you can deduct part of it on your taxes. For instance, if you do most of your work at home, you may be able to deduct a portion of your utilities—and take a home office deduction if you have a dedicated space in your house where work is done.
Here’s a starter list of the many blogger tax deductions (expenses) you can potentially write off on your blog taxes:
Advertising and other blog promotion-related expenses
A portion of household expenses if your office is in your home
Educational blogging courses, blogging books or eBooks that help with your blog (educational deductions)
Fees for your web hosting (even if you’re on a cheap hosting plan)
Any tools for running your blog
Professional services (like writing help, designers and developers)
Equipment and software (especially if purchased to test and write something like my Bluehost reviews analysis)
Rent for an office space
Meals and entertainment (for business purposes)
Business-related travel (including Uber & Lyft rides)
When in doubt about whether or not a particular expense will qualify as deductible, I always recommend getting in touch with a tax professional who can give you clear advice based on the unique circumstances of your business.
If you need a CPA to get in touch with, my accountant Leo Leydon has 25+ years of experience and has been phenomenal in helping me safely maximize the tax deductions for my own blog business and I couldn’t recommend him more highly ????
7. Understanding Estimated Taxes (Paying Quarterly Estimates)
Employees don’t have to worry about paying taxes throughout the year. This is done automatically for you by your employer (and taken out of your pay check at each pay period).
Why Do Self-Employed People Need to Pay Estimated Quarterly Taxes?
If you’re self-employed or independent contractor, you’re expected to pay a percentage of your income in the form of quarterly estimated taxes.
The good thing though, is that by paying your self-employed taxes in the form of quarterly estimates (4 times throughout the year)—the objective is to not owe any additional taxes once you file your annual tax return. The process of paying estimates, is designed to pace out your tax liability throughout the year.
How Much in Taxes Do I Need to Pay Each Quarter?
Many experts recommend setting aside around 30-40% of your net income to put towards your tax burden.
Speaking from personal experience, if you’re married and filing a joint tax return, you’ll likely be closer to the 30% figure. On the other hand, if you file your tax return as single, then plan on landing closer to 40% of your net income as a rough estimate for how much you’ll owe in taxes.
In practice, this means as you calculate the profits from your blog each month, you should automatically set aside 30-40% of that income (in your business savings account) for tax purposes—most of which you’ll pay in the form of quarterly estimates throughout the course of the year.
I can’t recommend highly enough that you keep a separate business savings account to hold onto your tax reserve fund. You may find that your final taxes fall below 30%, but it’s a good number to keep you from being blindsided by a huge tax bill.
Paying Your Estimated Federal Quarterly Taxes
You’re not required to pay quarterly taxes on the federal level if you expect to owe less than $1,000 in taxes for the year (which isn’t likely if you’re here). If you’re filing your taxes as a corporation though, you must pay taxes quarterly if you expect to owe more than $500 in annual taxes.
According to the IRS, “To calculate your estimated tax, you must figure your expected adjusted gross income, taxable income, taxes, deductions and credits for the year.”
Not exactly the most clear explanation, right? Lol.
Because I use QuickBooks Self-Employed to manage the financial side of things with my blog business, they automatically calculate my estimated quarterly tax payments for me—based on my income and the way I categorize each expense—and they’ll even remind me when (and how) to pay each quarter:
If online tools aren’t your kind of thing, many small business owners opt use a worksheet from the 1040-ES IRS form to determine the estimated quarterly taxes they’ll owe.
Usually, your estimated tax payments are split into four evenly-spaced payment periods. Your quarterlies are usually due on:
April 15th (first quarter)
June 15th (second quarter)
September 15th (third quarter)
January 15th of the following year (fourth quarter)
???? In 2021, the payment periods are remaining the same as usual (if you’ll recall they changed slightly in response to the COVID-19 pandemic for 2020). Estimated tax payments for Q1 are still due on April 15th, while the deadline for certain other income taxes has been extended to May 17th, 2021.
The IRS is also still offering tax relief to qualifying individuals and businesses affected by coronavirus.
Quarterly tax payments can be paid by mail, online, by phone, or with a mobile device using the IRS2Go app.
Become Familiar with Your State and Local Tax Requirements
Don’t worry, the 30-40% recommendation we talked about above (in terms of how much income you should set aside for tax purposes) includes factoring in your local and state estimated quarterly taxes too.
Every state and locality has different expectations for taxes, and different rates accordingly. Some areas of the U.S. will expect you to pay quarterly tax estimates for both local and state authorities—and you may receive a tax penalty if your income goes over a certain threshold and you didn’t make a quarterly payment.
Do your homework by checking out the details on what your state and county requires.
8. The 3 Best Tools to Use in Managing Your Taxes for Bloggers
Filing your taxes and keeping track of the bookkeeping can feel like a daunting task. That’s why finding the right tools to help can ease the burden in a major way.
Here are the two tools I’ve used to help manage my own taxes as a blogger throughout the years, making the process of managing my entire business a lot simpler.
1. Sage 50cloud (Cloud Accounting Software for Bloggers and Small Businesses)
Sage 50cloud is a cloud-connected suite of accounting tools that offers a combination of remote access (from any device), intelligent reporting on your finances and time-saving automation rules you can put in place to categorize your expenses & compile up-to-date reports anytime. Here are a few of the most useful features of Sage 50cloud:
Easy financial reporting (quick access to current balance sheets, P&L statements, expense reports, etc)
Real-time financial dashboards available on desktop and mobile
Cash flow forecasting and the ability to generate reports for your CPA to review
Remote access from any device type, anywhere in the world
Invoicing and fast online payment collection
Automatically import all bank transactions and assign categorization rules
Right now, Sage 50cloud is offering a special 40% off discount on all new accounts that sign up for a 12 month commitment, making this one of the most affordable accounting tools on the market for the breadth of features and functionality you’ll get your hands on—to better help with your blog taxes this coming year.
2. Quickbooks Self-Employed (My Personal Tax Tool for Bloggers)
Quickbooks Self-Employed is what I use to keep track of the taxes for my own blog business—and it’s been absolutely essential to keeping me up to speed. It’s extremely affordable (starting at $1/mo for the first 12 months), easy to connect with your bank accounts & start using to better keep track of your income and expenses. Some of their most used features include things like:
Separating all of your personal and business expenses
Automatically categorizing and maximizing your deductions
Helps with estimating your quarterly taxes
An easy-to-use mobile app for managing your business on-the-go
Mileage tracking (for travel and vehicle-related deductions)
Even more importantly, Quickbooks Self-Employed can also be bundled together with another flagship Intuit product—TurboTax, to make filing your taxes for bloggers that much easier when the time comes each year.
3. PayPal Business
The first thing I tell new bloggers to use for managing payments and organizing their taxes is the PayPal business account. Many affiliates use PayPal to pay you, and PayPal business keeps track of a ton of important financial documents, transaction information and revenue data for you.
PayPal does charge fees on transactions, but you can use their Business Account for free. There are no setup fees, monthly fees, or cancellation fees with PayPal.
A PayPal business account allows you to operate under a business name and gives access to multiple members (if you’re starting a blog with other people). You can create & export tax documents within PayPal and even produce financial summaries that can be either handed off to your accountant—or used when filing your own blog taxes online through a tool like TurboTax.
9. When Should I Hire a Tax Professional?
Calculating and paying taxes for bloggers can be confusing, frustrating and even scary at times (I know, I’ve been there). Knowing when to hire a professional is dependent on many factors.
For peace of mind, you may want to hire a CPA no matter what level of blogger you are—especially if you just don’t want to think about the numbers side of your business at all.
Hiring a professional can put you at ease and lets you know that you’re doing things the right way. That being said, I’d still highly recommend setting up a simple tool like like Sage 50cloud or QuickBooks Self-Employed that can (at the very bare minimum) keep careful track of all your income, automatically categorize your expenses and generate reports that an accountant can quickly work with.
Regardless of your comfortability with numbers, it can be beneficial to hire an accredited accountant, simple so that you can stay ahead of the changes in tax codes (which happen almost every year). For example, in 2017, the U.S. ushered in a new tax law called the Tax Cuts and Jobs Act (TCJA). This law made some significant changes to the way that deductions are accounted for. It also lowered corporate taxes to a flat rate of 21%.
Keeping up with changes in tax laws is something that can be difficult for many small business owners, and is what accountants are paid to know.
My advice would be to do what you’re most comfortable with at the hobby and side-hustle level. Using a tool like Sage 50cloud or QuickBooks Self-Employed can be enough to properly account for your taxes each year. If you’re not comfortable, an accountant can help you at a relatively low cost (depending on who you use).
If you need a CPA to talk with, my accountant Leo Leydon has 25+ years of experience and has been very helpful in safely maximizing the tax deductions for my business and I couldn’t recommend him more highly ????
As your business grows and your blog becomes a full-time business, I’d definitely recommend hiring a professional. They can make sure you’re square with your blog tax liability to the government, and they can also make sure you’re getting the most out of your write-offs.
Taxes for Bloggers: Are You Ready For the Coming Tax Year?
Whether you’re a hobby blogger, side-hustle blogger, or full-time blogger… the big takeaway here, is to keep detailed records of your profits and expenses.
It may not feel important today to track all of your transactions if you’re making a relatively small amount of income with your blog each month, but even tracking the patterns will help you with your tax liabilities and better monitor the health of your blog business over time.
How do you keep track of your own taxes for bloggers? What are some of your favorite tools to help?
Share with us in the comments below!