If you’re wondering, “Do bloggers pay taxes?” the answer is a big YES! Being a blogger and influencer may be a relatively new gig but filing taxes on income you earn is definitely not. Although it may not be your most favorite subject (we don’t blame you), it’s important to at least know the basics so you can be well versed in all aspects of your business. We have some tax tips for bloggers and influencers you’re not going to want to miss because knowledge is power (and can save you a lot of money in the long run too.) :)
Although here at Sidewalker Daily we’re a bunch of business and marketing professionals who work with bloggers and influencers on a regular basis, we’re not your personal accountant or financial advisor. So with that said, since every business and tax situation is completely different, you should always seek advice from an accountant or CPA about your specific situation to clear up any questions you may have. In the meantime, here are some general tax tips for bloggers to get you started.
Tax Tips For Bloggers: The Basics
Sometimes when numbers get involved people tend to tune out. There are a lot of little things to know when it comes to filing taxes so we’ve put together a list of some of the most important to help you out. (Just a friendly reminder that this article applies to only those filing taxes in the United States.)
Here are 10 things that every blogger should know about tax deadlines and how to do them right:
(1) Personal taxes are due in April.
The tax return filing date for individuals is April 15th of every year but sometimes that can change depending on a holiday. It’s always a good idea to plan for April 15th and if you end up with some extra days just count those as a bonus. If you can’t get it together by the deadline, then make sure you file an extension to give you some extra time.
(2) If you’re operating your blog or social media accounts as a business entity then the tax filing date may be different than when your personal taxes are due.
If you’ve taken your influence to the next level and are operating it as a business entity then you’ll need to know when the filing deadline is for that specific type of entity. For example, all LLC, S-Corporation and Partnership taxes are due on March 15th of every year, while Corporation taxes are due on April 15th. It’s always good practice to double check around the first of every year to make sure the filing date hasn’t changed due to a new law or it falling on a holiday.
(3) If you earn income you need to report it, no matter what.
If you’re wondering “What do bloggers need to claim for taxes?” – the answer is pretty simple, almost everything. If you get paid for partnerships, sponsorships or collaborations then you will need to report that income on your taxes.
(4) If you get free product or trips that may count as income too.
Just because you didn’t get paid cash money for a partnership or collaboration doesn’t mean you’re in the clear. If you get free products or free trips then you received value and may have to claim them on your taxes. Depending on the partnership, you’ll need to report the “fair market value” of whatever the product, service or trip is so make sure to ask the company or host upfront, so you don’t have to try to figure it out on your own. We definitely recommend checking with an accountant or CPA to make sure you’re claiming what you need to and skipping what’s not required.
(5) If you work with freelancers, independent contractors or other service providers you may need to provide them with a Form 1099-MISC for their taxes at the beginning of the year.
Maybe you hired a part-time social media assistant to help you with posting on Instagram or a photographer to shoot some photos of you for a brand partnership – if you paid anyone at least $600 for a service and plan to write it off on your taxes, then you’ll need to file a Form 1099-MISC for each of them to prove it. This goes for whether you’re operating your business as an individual or entity. Just FYI- 1099’s are due on January 31st to the individual contractor or service provider and have to be sent to the IRS by February 28th (by you or your accountant).
(6) You may be required to pay estimated taxes throughout the year.
If you’re a freelance blogger then you may have to pay estimated taxes since you don’t have them deducted like a traditional employee. There are various due dates throughout the year that you’ll need to comply with – they are April 15th, June 15th, September 15th and January 15th. There are some exceptions to this rule where you may not have to pay estimated taxes quarterly. For example, if you don’t earn at least $1,000 in blogging income then you may be in the clear. Definitely double check with an accountant to see what applies to your situation.
(7) You may have to pay self-employment taxes.
If you’re a blogger or monetizing your social influence then the government sees that as you running your own business (and you should too!). Basically self-employment tax is paying the taxes your employer would pay on your behalf (or take out of your paycheck) on your own. Even if you have a 9-5 salaried job and blogging is your side hustle, you’ll still have to pay self-employment taxes on the blogging portion of your income.
(8) You can deduct certain legitimate business expenses that are considered both “reasonable and necessary” to run your business.
There are certain tax deductions for bloggers and freelancers you can take advantage of to lessen the money you owe to the government. If you’re running your blog or social media accounts as a business, then there are expenses that will come up to do so. For example, drones, computers, that new iphone to shoot stories. It’s important to keep track of all of the money you spend on your business throughout the year so when tax season rolls around you’ll have that info handy.
(9) You need to know if your blog or social media business is considered a “business” or “hobby” by the IRS so you can accurately file your taxes.
Figuring out if your blog or social media influence is a “business” or “hobby” according to the IRS is a major step in understanding your tax liability. It’s also important to know how to classify your business because there are special rules and limits for deductions you can claim if your blog is considered a “hobby” versus a “business.” Just FYI – the IRS uses 9 factors to make the determination which list you can find on their website.
(10) The most important of all of these tax tips for bloggers is that YOU ARE responsible for accurately reporting your income.
Basically, don’t be shady. Make sure you accurately report your income to the IRS and only take deductions that you’re actually allowed to take. It’s totally not worth the risk.
How to file taxes as a blogger or influencer.
Don’t fret – taxes for bloggers are not as complicated as they seem. Depending on what level you’re at you have different options. You can file taxes yourself using programs such as TurboTax or you can hire an accountant or CPA to help you out.
If you end up deciding to hire an accountant or CPA here are some things to think about before you do:
(1) Interview a few people or firms to see if they are the right fit for you.
There are a lot of nuances in any field so it’s nice to have someone that understands your business and can help you accurately account for all the income you’ve received and deductions you’re eligible to take as a blogger or influencer. It’s also always nice to work with someone you like and trust, not just the first person you meet. Call their office and ask if they do a free consultation. If not, ask them a few questions about their experience working with bloggers and influencers so you can see if they’d be the right fit for the job.
(2) Ask them if they charge hourly or a flat fee to prepare your taxes.
This is where interviewing a few people to work with comes in handy so you can compare fees and figure out what you can afford. If you’re a blogger just starting out it might not make sense for you to hire an expensive accountant since your taxes probably won’t be too complicated.
(3) Do the legwork to reduce fees.
It’s helpful to be extra prepared when meeting with your accountant to save on fees. For example, have all the information organized based on the income you made, the product/trips/freebies you have received as well any and all expenses associated with running your business and delivering on your brand partnerships. Ask the accountant if they have a preferred way to receive information from you to make it easier for the both of you. Basically, the more work you do in advance to prepare, the less work the accountant has to do to try to figure out your finances i.e. you save money on fees.
Also, if you’re going to hire someone to assist you with your taxes make sure you get on it towards the beginning of the year. If you’re a last minute person this is NOT the time to be one. As tax deadlines approach accountants are much harder to get an appointment with because they are crazy busy due to all the other last minute people. :)
How to do taxes for travel bloggers.
If you’re a travel blogger or influencer there are some additional considerations you have to keep in mind when preparing and filing your taxes. One of the big ones is if you’re constantly traveling and have no home base, what is considered your state of residence?
Another issue is if you’re traveling all the time, some trips are strictly for business, some are strictly personal but what about the ones that end up being a little of both? You’ll need to determine the “business percentage” of the activity to be able to accurately take those deductions. If you’re a full-time travel blogger with complicated expenses, trips, free stays and products, it may be a good idea to work with a CPA to be able to fully understand your tax situation.
The good news is there are things you can be doing all year to prepare for tax time, for example tracking all income and expenses no matter how big or small. A way to make your life easier is to separate your personal and business finances by opening a separate bank account and getting a debit and credit card to use strictly for business expenses. That way you won’t have to comb through all your statements and try to remember if your lunch in Paris on May 2nd was for business or pleasure.
No matter if you’re a full-time travel influencer or testing out the waters, it’s important to keep track of your finances and prepare for tax season well in advance. And if you’re just starting out, tax tips for freelance bloggers aren’t any different so get your business in order before you hit it big time!