Blogger Taxes: Beginner’s Guide To (What To Know & Avoid)
Are you making money from your blog?
Well, as a self-employed person, you have to pay taxes.
Do not worry ! Blogger taxes are not complicated.
They are calculated based on the income you earn from your blog.
Do you want to know more? You have come to the right place!
In today’s article, we’ll tell you everything you need to know about blogger taxes, what to know and what to avoid. Let’s dive into it.
How are bloggers paid?
Bloggers are paid in different ways.
The most common way is to use ad revenue.
Affiliate Marketing and monetization are other ways bloggers get paid.
Bloggers also make money from sponsored posts and paid partnerships.
Additionally, bloggers can sell products or services on their blogs and make a profit.
Do you have to pay taxes as a blogger?
Every blogger who makes money with his Blog is mandated by the IRS to pay taxes, just like anyone physical store.
So if you make a profit from your blog, you have to pay taxes and file annual tax returns.
Otherwise, you will face many problems including financial penalties on your business.
Nobody wants that, do they?
How are bloggers taxed?
The taxes bloggers pay are calculated based on the amount of money they earn from all profitable methods on their blog.
Additionally, bloggers who are paid more than $600 are taxed via tax form 1099-NEC.
On the other hand, bloggers who earn less than $600 get the IRS Form 1040 income tax.
Additionally, bloggers must pay taxes for any product they review on their blog, excluding products valued at less than $100.
1. Tax on self-employment
As a blogger, you have to pay self-employment tax (SE tax).
The SE tax includes your social security and health insurance contributions.
This is similar to normal Social Security and Medicare taxes that are deducted from employees.
2. Estimated tax
Since bloggers don’t receive a standard income, their taxes are only estimates.
Additionally, bloggers must pay a percentage of their earnings in estimated quarterly taxes.
3. Sales tax
You only have to pay sales tax if you sell products on your blog.
Sales tax is only a small percentage of product sales made through your blog.
However, this only applies to taxable items, as sales tax is a consumption tax.
4. Income tax
All citizens who earn income, including bloggers, must pay income tax.
The amount of income tax depends on the federal tax rate and may increase as your salary increases.
How to calculate taxes from blog income
According to IRS 1040 and 1040-SR, you will need to file a tax return if your total income is over $400 or if you meet one of the other filing requirements.
As a blogger, you must pay taxes on the income you earn, excluding deductions and write-offs.
After calculating your net income by subtracting deductions from your income, you can then determine what tax bracket you fall to calculate how much you should pay for taxes.
Tax deductions for bloggers
The tax deduction is simply business expenses that have the potential to be deducted from your taxes.
This is why you need to keep track of all your expenses when running a blog.
What are tax deductions?
Tax deductions are items or expenses that you can take out of your taxable income.
This can significantly reduce your taxes.
This includes all charitable contributions and occasional losses such as theft.
There are also many special cases such as student loan interest, mortgage interest, retirement account contributions 401(K) and any loss of investment.
In addition, you can benefit from a tax reduction if you are married, head of a family or widowed.
What can bloggers delete?
Many expenses go into a business.
Since bloggers are self-employed, they can deduct the costs of items and services necessary for their business.
Additionally, if you work from home or have a home office, you can also deduct a portion of your rent or mortgage and utilities.
Here are some things you can write off as a blogger:
- Electronic devices such as laptops, cameras or cell phones
- Office supplies
- Trip costs
- Domain hosting fees
- Digital advertising
- Publishing software and messaging services
What expenses can bloggers not cancel?
Tax deductions can be a bit tricky for bloggers.
This is because you cannot write off anything that duplicates for personal use.
This means that if you use your laptop for work and personal reasons, you can cancel it.
Also, the IRS has regulations on what constitutes a home office, so you can’t deduct the small corner of your bedroom.
Should I register my blog as a business?
You don’t have to register your blog as a business, even if you treat your blog as a business.
There is no law requiring you to register your blog as a business.
Do bloggers need an LLC?
SARLs are a good way to save money on taxes and protect your assets.
As a general rule, bloggers should consider an LLC when the cost of running the LLC is close to that of owning it.
In this case, LLC is likely to reduce your operating costs.
The tax structure of an LLC is more flexible and you will protect your savings with limited liability protection.
Moreover, it can increase the credibility of your business.
What legal documents do I need for a blog?
Every blogger must have three legal documents:
- Disclaimer Policy
- Terms and conditions
Additionally, if your blog includes affiliate marketing monetization, you will need to include an affiliate statement.
Do bloggers need insurance?
It’s always better to be safe than sorry.
Also, it depends on the size of your blog.
Simply put, as your blog grows, the risks increase.
A lot of things can go wrong in the blogging world.
Having an insurance strategy that makes sense for your business is always a good option.
So, based on the risks you face and the growth of your blog, you can decide whether you need insurance or not.
How to File Taxes as a Content Creator or Blogger
Are you ready to declare your taxes for your blog?
Here are the steps to follow:
1. Determine your taxable income
The first step you need to do is to calculate your income in detail.
Next, you will need to deduct all business expenses and deductibles to determine your taxes.
2. Obtain the appropriate forms for your entity
The next step would be to acquire all the forms and fill them out.
First, you will need to have a clear idea of what your blog is about.
If you are the sole proprietor of your blog, you will need to complete a Schedule C or Schedule C-EZ form whether or not you have an LLC.
However, if your blog is a partnership, you will need to complete Form 1065.
3. File your taxes
Filing your blogger taxes depends on the legal entity under which you operate your blog, which includes:
Our suggestion: Talk to a tax professional
You must remember that you are responsible for your taxes, from calculating your income to filing the proper declaration.
Thus, any small error can be considered tax evasion.
To avoid getting into legal trouble, you should consult a tax professional.
After all, they will have the most accurate information to help you with blogger taxes.
To sum up, any blogger who earns money from his blog is required to pay taxes.
You will have to pay self-employment taxes, income taxes, and estimated taxes.
Finally, blogger taxes are not complicated.
If you are having trouble with your taxes, it is best that you speak to a tax professional.
If you still have any questions regarding our topic, feel free to leave them in the comment section.