Hey there! Today, I’m sharing a post from my friend Jackie, a licensed attorney from Pennsylvania who’s been blogging at Jade and Oak for over three years. She specializes in helping bloggers grow their blogs while staying on the right side of the law. I get a lot of questions about blogging, law, and taxes, so this is a perfect topic for us to dive into. Enjoy!
Taxes might not be the most exciting subject, but they’re important. They can be confusing and overwhelming, but ignoring them could cost you money. So, let’s break down what you need to know about taxes as a blogger or freelancer in the United States. I’ll keep it simple and straightforward.
First off, being a blogger or freelancer means you’re self-employed. Unlike a traditional job where your employer withholds taxes from your paycheck, you’re responsible for paying your own taxes. The U.S. tax system operates on a “pay as you go” basis, so you need to pay estimated taxes to the IRS every quarter. If you miss these payments, you could face a tax penalty.
However, if you didn’t owe taxes last year or don’t expect to make more than $1,000 in profit from blogging this year, you might not need to pay estimated taxes. Also, you don’t need to report your self-employment earnings until your net income is at least $400 (after expenses).
Even if you’re not making money from your blog yet, it’s a good idea to start tracking all your expenses and earnings now. This will make things easier when it’s time to file taxes.
When you’re self-employed, you have to pay both the employee and employer portions of Social Security and Medicare taxes, which can feel like double the amount. This applies even if your blog is just a side hustle. The good news is, you get a personal tax deduction for paying this, which lowers your adjusted gross income and your overall tax liability.
To file your taxes as a blogger, you’ll need to include a few extra forms with your personal tax return. Schedule C is for reporting self-employment income, and Schedule SE helps calculate your self-employment taxes. You can file these forms using traditional paper methods or tax software. If you’re unsure, consider consulting a tax specialist to ensure you’re taking advantage of all possible deductions.
Bloggers can claim various deductions on their tax returns. The IRS allows deductions for expenses that are “reasonable and necessary” for your work. This can include advertising, supplies, office furniture, electronics, and other business-related goods and services. If you work from home, you might be able to deduct a portion of your rent and utilities. You can also deduct the cost of business-related cell phones, cameras, and computers, though this can get complicated if you use them for personal purposes too.
Educational expenses, like online courses about blogging, and software or programs related to your blog can also be deducted. This includes web hosting fees, domain name expenses, WordPress plug-ins, virtual assistant fees, graphic design, and a portion of your internet bill.
If your blog is just a hobby, you can’t use these deductions. The IRS looks at several factors to determine if your blog is a business or a hobby, such as whether you’ve made a profit in at least three of the last five years, the amount of time you invest in your blog, and whether you rely on income from it.
So, there you have it – a basic rundown of what bloggers need to know about taxes. This is a big topic, and I couldn’t cover everything, but I hope this gives you a good start.
Jackie is a licensed attorney from Pennsylvania who’s been blogging at Jade and Oak for over three years. She helps bloggers avoid legal pitfalls and build their blogs legally. When she’s not blogging, she enjoys spending time with her husband, Jarrod, and their two pugs, Bowie and Rosie.
Got a blog? What legal questions about blogging and taxes do you have for Jackie?