So, you have decided that blogging is a great online business for you. Now, you wonder what are the expenses that come along this business.
Today, we will be going to talk about the Tax deductions for bloggers: 31 overlooked expenses.
Remember that any business has to declare their financial books or reports especially at the year-end wherein they have to declare income and pay taxes.
Oh yes! you need to pay taxes for all the profit you earn with your online business such as Blogging, E-commerce etc.
The good news is that, unlike working at the local grocery store, there are a lot of potential tax deductions that might be associated with your online business income.
Remember, that if you are blogging for someone else as a contributor or blogging is just your hobby, you will probably not enjoy all the possible tax deductions listed below.
If you are a beginner, you will probably don’t have huge income during your first year, as the first year is more on building up your site and learning the process at the same time. Therefore, it’s very normal that the first year is not profitable, but of course, there are some exceptional people who can manage to earn a significant profit right away.
So, if you are a beginner – your initial investment/expenses will probably be just the domain name, website theme, web hosting, ebooks, and eventual training.
Now, let’s take a look at the short list of bloggers’ expenses for tax deduction ideas. Take note: A lot of these are often overlooked!
There are two kinds of qualified business expenses that can be declared as tax deductions: ordinary and necessary expenses.
Ordinary Expenses – Commonly accepted expenses in your trade or business
Necessary Expenses – Helpful and appropriate in your trade or business
So, how do these terms relate especially to blogging? These are actually the reasonable expenses related to your business or blogging income.
New Ipad, New Desktop Computer, New Laptop? – YES
New Video Games – No. Unless you are making a review of that video games on your blog! Nice huh?! (wink!)
Tax Deductions For Bloggers: 31 Overlooked Expenses
- 1 Tax deductions for bloggers: 31 overlooked expenses.
- 1.1 1. Domain Names / Domain Renewal
- 1.2 2. Web Hosting Fees
- 1.3 3. Internet Access Fees
- 1.4 4. Themes, Plugins, Software
- 1.5 5. Home Office
- 1.6 6. Products You Review
- 1.7 7. Security / Cloud Backup
- 1.8 8. Outsourcing
- 1.9 9. Marketing Costs
- 1.10 10. Blogging Equipment
- 1.11 11. Furniture and Other Equipment
- 1.12 12. Conferences and travel expenses
- 1.13 13. Images And Music
- 1.14 14. Coaching And Training Programs
- 1.15 15. Professional Fees
- 1.16 16. Subscriptions
- 1.17 17. Insurance: Health or Home
- 1.18 18. E-Books
- 1.19 19. Promotional Items
- 1.20 20. Business cards
- 1.21 21. Giveaways Or Competition Prizes
- 1.22 22. Postage
- 1.23 23. SEO Services
- 1.24 24. Office Supplies
- 1.25 25. Rented Or Shared Work Space
- 1.26 26. Trademarks and Incorporations
- 1.27 27. Transportation
- 1.28 28. Restaurants/Food
- 1.29 29. Smartphones, Landlines, And Usage
- 1.30 30. Retirement Plans
- 1.31 31. Tax and Accounting Preparation
- 1.32 Final Thoughts…
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Tax deductions for bloggers: 31 overlooked expenses.
1. Domain Names / Domain Renewal
The first operating expense for a blogger is acquiring and renewing a domain name.
You can buy domains cheaply straight from a company.
I personally use siterubix.com. You can get free subdomain and purchase your own domain name as well. Plus, you’ll get a free 7-days online entrepreneur training.
Domain names are very cheap to renew, and usually cost around $5-15 per year. Prices vary whether you use .com, .net, .org etc.
This is especially important for bloggers are who buy and sell domain names for profit and for bloggers who are doing website flopping for profit.
2. Web Hosting Fees
A professional blog always comes with its own hosting service, so your web hosting fees are the also one of the things you need to look at when calculating your tax deductions.
Bluehost is the cheapest and it’s WordPress.org’s number 1 recommended web hosting. You can get it for only $3.95 per month and it can go down to $2.65/month during their promo period. Some web hosting service can cost up to $499/year. So, make sure you have the best hosting service that fits your budget especially if you are a beginner.
3. Internet Access Fees
Make sure you have your monthly internet access fees as well as the extra expenses like roaming fees included in your tax deductions.
However, if your internet is bundled with your cable or home phone, you’ll have to calculate what portion of your bill goes to the internet.
4. Themes, Plugins, Software
All software that you use for creating or maintaining your blog is tax deductible, even it’s something standard like Photoshop or Microsoft Office.
Make sure you also include WordPress theme and plugins for your site too.
5. Home Office
This one is a huge tax deduction. If you work from home, as bloggers normally do, you can calculate the percentage of space in your home that you use as your home office for your online business. You can claim that the percentage of our mortgage or rental expenses as well as utility expenses.
For instance, if your office is equal to 1 of 5 rooms in your apartment or condo, you can right of 1/5th of the mortgage, rental, and utility expenses.
Plus, if you have clients actually come to your house to meet, even much better. That same fraction applies to expenses that make your home office presentable. For instance, landscaping, home maintenance, and painting can also qualify as a tax deduction.
Take note that some countries, like Denmark, do not allow tax deductions for the mortgage, which means that you own the property. So, make sure to check out this rule with your local tax office.
This is one of the most overlooked tax deduction because it’s so tricky to calculate. If you want to be sure about this one, consult an accountant in your area.
6. Products You Review
Majority of bloggers do the product reviews for their blogs. So, if you review products, make sure you write them off!
Expenses incurred with product reviews are considered as reasonable tax deductions. This can significantly lower your taxes as bloggers can review literally anything such as computer software, mobile phones, transportation, restaurant – absolutely anything you can think of.
For instance, you had to take the train into the city to review a restaurant? You can claim for any travel expenses and claim for the expenses you paid for making a review for a particular restaurant. How cool is that!
Just make sure you keep all of your receipts (at least 5 years) and can prove that you actually blogged about any products that you used as deductions.
7. Security / Cloud Backup
Security software is a must to your online business. The yearly subscription fee is also tax deductible. If you pay for a WordPress anti-spam plugin like Akismet or the anti-virus program on your computer, then don’t forget to write them off.
Many bloggers are also using cloud backup and pay for an annual fee for it – this is also tax deductible.
Google is currently encouraging blogs to move over to a secure https address, which requires an SSL certificate. Some hosting services are giving SSL certificate free and some don’t. That’s also a tax deduction.
A lot of bloggers are higher freelancers for different tasks for their blogs – such as social media, content writing, logo design or a custom plugin for your site. Paying for these tasks to be done for you are also tax deductible.
Remember to keep a log of all of these purchases, including all invoices you receive for references.
9. Marketing Costs
Marketing costs including any advertising or promotional expenses for your website are tax deductible. This includes GoogleAdWords, social media ads, printing business cards etc.
Marketing costs including advertising of your blog, printing business cards, etc.
10. Blogging Equipment
As a blogger, your computer is your main device, and that means you can claim the tax for what you paid for it. If you upload videos to YouTube, you can also claim for money spent on webcams, memory cards, external drives, microphones, and any other gadgets.
11. Furniture and Other Equipment
Aside from computer, printer or a photocopy machine, you can also write off your furniture such as computer table, office chair
Take note: that you need to apply a depreciation method for all the furniture and equipment that you expect to use for several eýears.
For instance, if you expect to use your laptop for 5 years, then you write off the 1/5th value of your computer as your depreciation expense every year within 5 years of time. Plus, any repair and maintenance pertaining to your computer are also tax deductible.
12. Conferences and travel expenses
Blogging has become so popular as a profession today. And there are regular conferences where bloggers and affiliates get together and share knowledge.
If you attended any blogging conventions, your travel expenses are tax deductible. If you interviewed someone for ou blog over lunch or sent them “thank you gift” – these expenses are also tax deductibles.
They can be pricey, but the good news is that you can claim the tax deductions on your tickets and related expenses.
13. Images And Music
There are a lot of free images and music available online. However, if you are paying for the high-quality ones, your subscription fee is definitely tax deductible. The same applies to any headshots or other marketing photography. Plus, if you use music, for example as a theme intro and outro for a podcast – these are also tax deductibles.
14. Coaching And Training Programs
If you use a business coach or mentor, your payments are also tax deductible. Same applies if you use a training program.
15. Professional Fees
Lawyers’ and accountants’ fees are also tax deductible. So, you if use any of their services pertaining to your blog, don’t forget to write them off. Yes, a lot of bloggers use these services especially when their businesses become more complicated when it comes to taxation. And some bloggers need professional services from a lawyer to protect and defend their business.
Do you have any other subscriptions like magazines, podcasts, and memberships to professional associations? So, don’t forget to write them off as these are expenses that help you to develop your blogging skills and these are tax deductible.
17. Insurance: Health or Home
If you are a full-time blogger and freelancer, then you probably ay your own health insurance. The IRS should allow you to deduct all your medical expenses over 10% of your adjusted gross income. This applies in the US. So, make sure to check the taxation rules in your country for this.
A portion of your homeowners or renters insurance can also be deducted if you are claiming a home office. Remember, if you get your health insurance through your employer, you can’t deduct it as a business expense for your blog.
E-book purchases which are related to blogging are one of the most overlooked tax deductions because many bloggers think of e-books as entertainment rather than work.
19. Promotional Items
Did you make any promotional items, such as stickers, t-shirts, pens or keychains? Yes, these also are tax deductibles.
20. Business cards
Yes, don’t forget to carry business cards with you at all times for networking! Surprisingly, many bloggers create also business when they are socializing with other people. So, blogging is also an offline business marketing, right?
21. Giveaways Or Competition Prizes
Any giveaways or prizes are eligible for tax deductions as promotional tools, whether it’s a flight ticket, a brand new car or a t-shirt.
You will probably use ordinary postage services for sending prizes to your lucky winner or sending greeting cards to your suppliers. Thankfully, this is also tax deductible!
23. SEO Services
Many online business owners including bloggers are hiring professional SEO services. If you pay a company to help with your site’s SEO or pay to guest post on another blog or website, then, don’t forget to claim your tax back.
24. Office Supplies
I hope this is not new for you. All your office supplies and stationeries that you need to use from time to time are tax deductible too! Even the little things like post-it notes, bond paper, notebooks, printer ink, and pens are counted so remember to file your receipt up.
Most bloggers and other online entrepreneurs love to work from home. However, there are people who prefer a very silent and work environment.
While some people go to the public libraries, some people go to “Co-working”, or renting a desk in a shared workspace. This is becoming more popular nowadays. It’s a great way to meet new people and network. Remember, these daily or monthly fees are tax deductible too.
26. Trademarks and Incorporations
Did you pay someone else to set up your business as an LLC or incorporation? That’s a tax deduction!
What about trademarks? Yes, some bloggers have trademarks registered for their blogging business. So, if you are considering it, this can cost around $300 to get one setup, but don’t worry, you can claim your tax back on it.
As a blogger, you will definitely spend a lot of time working from home, or at an office or co-working space. However, there will be times when you need to travel in order to get some work done.
If you travel for work purposes, any expenses such as tickets, fares, Uber rides, taxi rides, and gas are tax deductible. You
As a blogger, you might spend a lot of time at home, or at an office or co-working space. Still, there will be times when you need to travel in order to get some work done.
If you’re traveling for work purposes, tickets, fares, Uber rides, and gas are tax deductible. Some countries are even granting tax deductions for using a bike to work.
Do you blog for travel niche? Then you will definitely love this one. You can actually claim tax deductions for your entire trips, accommodations and everything that has something to do with your blogging business. How cool is that?
Traveling for your blogging business? Then you can claim tax back for your dining costs while you travel. And if you are away on business trips, anything you spend on food during the trip is tax deductible.
29. Smartphones, Landlines, And Usage
Smartphones are one of the devices that you can declare – the smartphone itself can get a depreciation expense- let say 2 years. Plus, you can get a portion back for your monthly phone plan.
Plus, both mobile and landline usage can be claimed too – well, a part of it. Track your calls over a period of time and calculate the percentage of your calls are business-related, and then use that percentage to calculate the allowable expense.
Tip: Some bloggers use a separate smartphone and landline for their business. This will make it a lot easier when declaring taxes.
30. Retirement Plans
As a full-time blogger – a sole proprietor or LLC, you can lower your tax bills further by contributing to a retirement plan.
31. Tax and Accounting Preparation
Another most overlooked tax deduction! If you get help to prepare or calculate your taxes, you can add the cost of that in there too. Aside from an accountant, you can actually buy tax software or program to calculate your taxes.
At the end of each taxation year, make sure that you keep all your documents on file for at least 6 years. This includes all your financial statements, receipts, and invoices.
It’s easier if you file them in a different folder or envelop each month. Track everything in a spreadsheet, or book. You may also want to scan or take pictures of your receipts and invoices because electronic formats are now acceptable and they will serve as a backup in case you lose anything.
And remember, the more necessary and ordinary expenses you manage to keep track of, the lower your taxable profits, and the less tax!
I hope this list of Tax deductions for bloggers: 31 overlooked expenses will help you to maximize your tax deductions and enjoy a higher net income.
I’m looking forward to seeing you and guiding you in this awesome community. See you on the other side.
If you have any thought or more suggestions, please don’t hesitate to leave a comment below. Good luck with your journey to financial freedom online. God bless!