Author: Jake Snelson

Obtaining a Tax ID Number and Proper Licenses to Run Your Blog Business

Creating and Maintaining an Organized Bookkeeping System for Your Blog

Paying Estimated Quarterly Taxes for Your Blog Business

Separating the Blogging Myths from the Blogging Truths

The Business of Blogging Part 6: Track Business Expenses the Right Way

A huge part of putting an organized medium or small business bookkeeping system into practice is tracking expenses for your blog business. Many small business owners don’t keep close track of their expenses and then panic when tax season arrives and they can’t provide proof of all their deductions. Here’s a quick overview of how to track business expenses and the types of expenses you should be tracking.

Track Mileage/Vehicle Expenses for your Blog Business

If you use your car for your blog business, you can deduct some of those expenses; as long as you track the business expenses. You might use your car to shop for supplies, travel to conferences, and the like. Here’s the key with deducting vehicle expenses on your taxes: you have to keep track of miles driven for business. You can use the Standard Mileage Deduction, which offers a certain dollar amount per mile driven for business. For 2017, you can deduct 53.5 cents for every mile driven. That way, you don’t have to keep track of receipts for gas, oil changes, car washes, etc. You just track your miles driven for business use and use the Standard Mileage Deduction come tax time. Visit this post for tips on tracking mileage.

Track Travel Expenses, Conference Fees, Meals, and Hotel Stays for your Blog Business

One of the great perks of having a blog business is travel. Whether you’re taking an exotic vacation in order to offer recommendations and reviews on your blog, or traveling to a conference or training, money that comes out of your pocket is deductible. You can deduct the entire expense of conference fees, since they are to better yourself and your business. Travel to and from conferences is also 100% deductible, along with hotel stays. Meals while on a business trip can be deducted at 50%. The key with deducting travel expenses for your blog business is to make sure your travel is truly work-related and not just a family vacation turned business trip. Make sure you keep any paperwork on your trip so that you can track your business expenses come tax time.

Track the Expenses of Products used in Blog Posts

Bloggers often have to purchase numerous products to use in their posts, and deducting these items can be tricky. If you’re making a craft, recipe, or home decor piece for your blog, you can deduct the items you purchased specifically for that post. However, if you’re going to eat the dinner or use the piece to decorate your personal space, or give the craft as a gift to a family member, things get tricky. Technically, deductions are only legitimate when they’re for your business. As you can see, the lines get a little blurry when that business is a blog. This is a gray area that the IRS has not addressed directly. A safe way to claim these deductions is to use the 50% rule. If you are using the items purchased for your blog AND for your personal use, deduct the expense at 50%. If you’re using it only for your blog, deduct it at 100%.

Track Personal Expenses for your Blog Business

There is often some overlap in personal expenses and business expenses. (See category above.) If you’re using your home for your blog business, then you can deduct some of your personal home expenses on your taxes. If you’re claiming a “home office” on your taxes, you can deduct things like a portion of your mortgage, utilities, electric bill, and so forth. In this case, you would simply use the size of your home office in relation to the size of your entire home and deduct accordingly. For example, if your home is 2,000 sq. ft. and your home office is 200 sq. ft., you would deduct 10% of those bills. Other personal expenses that may be deducted for a blog business are your internet bill and phone bill. These are also deducted at the percentage they are used for your business. If you use your phone 50% of the time for business, you can deduct 50% of your phone bill. It is up to you to determine how much these items are used for business vs. personal use.

It’s important when you run a blog to track business expenses, so that you can determine if your blog was profitable. If you have any other questions about what business expenses you should track please ask us and we’re happy to help you out!

Love this post in our Business of Blogging Series? You might also enjoy:

Obtaining a Tax ID Number and Proper Licenses to Run Your Blog Business

Start Making Money on Your Blog.

Creating and Maintaining an Organized Bookkeeping System for Your Blog

Paying Estimated Quarterly Taxes for Your Blog Business

Separating the Blogging Myths from the Blogging Truths

Which Tax Forms Do I File as a Small Business Owner?

Depending on your business type, you need to file tax forms that report your business’ income for the year. The IRS requires different paperwork for the different business structures–Sole Proprietors, LLCs, and S Corps. While there are different forms for the varying business structures, taxable income for small businesses is generally calculated in the same way.

Sole Proprietors

Sole Proprietors and Single Owner LLCs, report business income on a Schedule C. A Schedule C form is filled out and attached to a personal tax return (1040.) A Schedule C reports your business’ income and losses. To simplify the process, some small business owners opt to fill out a Schedule C-EZ instead. This simplified version of a Schedule C omits the details and just asks for your business income and expenses. There are some stipulations to using the EZ form, though. You can only fill it out if you operate one sole proprietorship, do not report more than $5,000 in business expenses, are reporting a net profit, don’t hold business inventory during the year, have no employees and are not claiming a deduction for a home-office.

If you file a Schedule C for your business, you’ll likely also need to file a Schedule SE. (Schedule SE stands for “Self-Employment Taxes.”) Being self employed means that you don’t have an employer withholding money from your paycheck to cover Social Security and Medicare Taxes; therefore, you have to pay them yourself. If your sole proprietorship or single member LLC earns more than $400 of net profit, you’ll need to fill out this form in addition to the Schedule C.

Because Schedule C’s are filed with personal returns, the filing deadline is the usual April 15th. (April 18th in 2016.)

LLS and S Corps

LLC and S Corporations report business income on Form 1120. This form is for reporting income, gains, losses, deductions, and credits, and also for figuring your income tax liability for the year. You should file form 1120 separately from your 1040. Form 1120 is more detailed than a Schedule C form.

A Form 1120 must be filed by the 15th day of the third month following the close of the tax year, which for most taxpayers is March 15. You cannot send this form to the IRS with your personal income tax return.

Still have questions about which forms you need to file for your small business? Send us a quick message and we’ll help you out.

The Business of Blogging Part 5: Create and Maintain an Organized Bookkeeping System (AKA: Mazuma’s Secret Bookkeeping Formula)

An organized bookkeeping system is arguably the most critical component of monetizing a blog business. It doesn’t matter if you’re making boocoo bucks on your blog if you aren’t tracking money coming in and money going out. Here’s how we suggest you manage your time when you’re taking care of your own small business bookkeeping and accounting tasks.

Mazuma’s Secret Bookkeeping Formula

If you’re a blogger, you’re likely a list person. You like schedules, checklists, and organization. If you’re feeling overwhelmed with the bookkeeping part of your blog, here’s a simple formula that when followed closely, will limit time spent and increase profits for your business.

30 minutes / week

Schedule 30 minutes each week to do the following:

Gather all receipts spent on blog-related items that week and make note of what they were for.
Jot down miles driven for your blog business if you’re planning to use those an expense for taxes.
Review your ad revenue and make notes
Enter everything into a bookkeeping program–whether it’s an excel spreadsheet or something fancier, you must keep track.

1 hour / month

File all receipts from the month. To learn more about filing receipts digitally, visit this post.
Review all your entries for the month in your bookkeeping program.
Add up your income and expenses for the month to determine profit.
Compare to your anticipated budget and adjust where necessary.
Pay bills and send invoices.
Adjust for the next month.

1 hour / quarter

Review income and expenses for the quarter and enter into bookkeeping program.
Determine how much you owe and pay your estimated quarterly taxes.
Make changes to your budget and plan spending for the next 3 months.

2 hours / year

Review your yearly income and expenses.
Create a budget for the next year based on last year’s budget and anticipated growth.
Schedule time for weekly, monthly, quarterly, and yearly bookkeeping tasks.

Follow this bookkeeping schedule and you’re sure to stay on top of your blogging finances. When you’re blog business becomes too large to manage, you might consider outsourcing those services to save yourself time and money.

Love this post in our Business of Blogging Series? You might also enjoy:

Obtaining a Tax ID Number and Proper Licenses to Run Your Blog Business

Paying Estimated Quarterly Taxes for Your Blog Business

Separating the Blogging Myths from the Blogging Truths

The Business of Blogging Part 4: Start Making Money on Your Blog

If you’re creating engaging content on your blog, employing proven SEO strategies, and using great images on your posts, you’re ready to start making money on your blog! Most bloggers know what catches a reader’s eye because they’ve been consumers of great blogs long before they started their own. But behind all the beautiful images and interesting, witty copy, there is a money-making business.

Here are a few ways to start making money on your blog:

Advertising: Companies will pay you to advertise their products on your website. Sounds easy enough, right? Ads should be relevant to your readers, but not overwhelm your content. The most popular ad network is Google Adsense, which is relatively easy to get into and set up. You can also use other ad networks such as BlogHer, Beacon Ads, Federated Media, Sovrn, Media.net, Rivit and Sway. Advertising doesn’t create the revenue that it did a few years ago, but many bloggers still find success with it. Hosting ads on your blog is a great way for you as a novice blogger to start making money on your blog.
Sponsored Posts: If you have a decent following on your blog, then you can contact companies and see if they’re interested in sponsoring one of your posts. It’s usually best to start with companies whose products you already use. They’ll likely want to know your monthly page views and how far-reaching their potential sponsorship will be. Hint: Contact their media relations person directly. A quick way to find out who that is to contact at that company is to send them a quick tweet on Twitter–”yoo-hoo! Who do I contact about xyz.” This might result in a quicker response than an email.
Affiliate Links: An affiliate link is a hyperlink on your blog or post that contains the ID of a product another company is trying to sell. Advertisers track how much traffic comes from the hyperlink on your blog. If a visitor from your site buys the product you advertised, you receive a portion of sales.
Digital Products: Why not use your blog to sell your own products instead of someone else’s? When you sell your own products you don’t have to share the profits with anyone else. Popular digital products for bloggers to sell include printables, digital courses, E-books, photos (stock photography is great,) the options are endless. Just make sure your products align with your blog’s purpose and mission.
Services: Are you an SEO master? How about a graphic designer, web designer, social media manager? You can offer your services to fellow bloggers by creating branding for their business, building a custom WordPress template or helping them monetize their Pinterest account.
Physical Products: In addition to selling digital products, you can start making money on your blog by selling physical products. If you run a craft blog, sell your crafts on Etsy. If you’re cooking up something in the kitchen, create a cookbook to sell. Consider selling clothing with your branding on it, or any other physical item associated with your blog that your readers might be interested in.

How do you make money on your blog? Drop a line in the comments below and help us add to this list.

Love this post in our Business of Blogging Series? You might also enjoy:

Obtaining a Tax ID Number and Proper Licenses to Run Your Blog Business

Creating and Maintaining an Organized Bookkeeping System for Your Blog

Paying Estimated Quarterly Taxes for Your Blog Business

Separating the Blogging Myths from the Blogging Truths

The Business of Blogging Part 3: Obtain Proper Licenses and a Tax ID Number

If you’ve already formed your business entity, the next step in turning your blog into a small business is to obtain a business license. Different cities and states require different licenses, so the licenses you need to obtain depend on your area.

- Business License: The SBA has a guide on which federal and state licenses you need to obtain for your small business. Most bloggers do not need to obtain a federal license to do business, but most states do require bloggers to have a general business license.
- Sales Tax Permit: If you are selling goods or services on your blog, you may need to get a sales tax license or permit. Contact your state’s department of revenue or taxation to find out if you need to apply for a sales tax permit or resale number. You’ll typically need one if you sell, rent or lease goods or provide a taxable service on your blog.
- Home Occupation Permit: If you’re running your blog exclusively from your home, you’ll likely also need a Home Occupation Permit. Read more about home-based businesses on the SBA website for more guidance on what you need to legally operate out of your home. All of the above licenses and permits can be obtained from your local government website.
- Employer Identification or Tax ID Number. You will be required to obtain an EIN for your blog. For more information on how to do this, visit this post. Your EIN is a one-time request and is good for the life of your business.

You’ll want to make sure you keep up on the renewal dates of your business licenses and permits. Most require renewal every year, and you should be reminded by mail of your renewal date. Keep track of licensing and renewal fees as those are tax deductible.

After you form your business entity and obtain proper licenses, you’re ready to start blogging as an actual business! However, your small business obligations do not end here. There are several maintenance responsibilities that must be kept up on such as estimated quarterly taxes, accounting and small business bookkeeping, and filing taxes as a business.

Love this post in our Business of Blogging Series? You might also enjoy:

Creating and Maintaining an Organized Bookkeeping System for Your Blog

Paying Estimated Quarterly Taxes for Your Blog Business

Separating the Blogging Myths from the Blogging Truths

Interested in Learning More?

Schedule a free consultation with our team!

The Business of Blogging Part 2: Decide on a Business Entity

In Part 1 of our Turn Your Blog Into a Business series, we debunked the most common myths behind blogging as a business. If you’re serious about turning your blog into a small business, you’ll need to get legal in order to properly file taxes and avoid trouble with the IRS later on. While opening a legitimate small business may seem intimidating and a little scary, it’s actually fairly easy to do.

The first step in turning your blog into a small business is deciding on and forming a business entity. There are three common entities bloggers choose from: Sole Proprietor, LLC, and S. Corporation.

Sole Proprietor

Most bloggers form a Sole Proprietorship when they’re just starting out. This means that you own and operate the business by yourself, and are responsible for all profits, losses, and debts. You may already be running a sole proprietorship without knowing it if you’re making money from your blog.

When it comes to taxes, sole proprietors files as individuals and use a Schedule C form, in addition to a standard Form 1040. Sole proprietors are accountable for withholding and paying taxes, including self-employment and estimated quarterly taxes. add links

No legal paperwork is needed to form a sole proprietorship, but your city or state may require you to obtain a business license. To see what business license(s) you may need to obtain depending on your area, visit the SBA website.

The advantages to forming a sole proprietorship for your blogging business are that it is the least expensive entity to form, you have complete control of the business, and tax preparation is quick and easy.

LLC

A Limited Liability Corporation (LLC) is also a good option for bloggers. While an LLC is a little more expensive to form, an LLC offers liability protection that a sole proprietorship does not. It allows you to separate your business assets from your personal assets.

If your business is sued or runs into financial trouble, the business will be responsible (and not you personally). In addition, forming a corporation or LLC may lower your tax bill.

An LLC must be registered in the state where it does business. Each state varies slightly, but in general they all require you to choose a distinct name and to file articles of organization.

The “articles of organization” is a document that legitimizes your LLC. It includes information like your business name, address, and the names of its members. For most states, you file with the Secretary of State. However, other states may require that you file with a different office such as the State Corporation Commission, Department of Commerce and Consumer Affairs, Department of Consumer and Regulatory Affairs, or the Division of Corporations & Commercial Code. Many states charge a filing fee for the articles of organization.

For a single owned LLC, taxes are filed just like a sole proprietor. An LLC with multiple members would file a Form 1065 to establish a partnership.

The IRS guide to Limited Liability Companies provides all relevant tax forms and additional information regarding their purpose and use.

S. Corporation

An S Corp is similar to an LLC in that it is treated as its own entity separate from the individual. Members of an S corporation pay income tax on the wages they receive and must have regularly scheduled director and shareholder meetings. S Corps are more expensive to form and require more maintenance as a business entity. They are generally not recommended for bloggers who are just starting their small business.

For more information on the different types of business entities, visit the SBA website. Need help choosing which type of business entity is best for your blog? We can help!

Love this post in our Business of Blogging Series? You might also enjoy:

Obtaining a Tax ID Number and Proper Licenses to Run Your Blog Business

Start Making Money on Your Blog

Creating and Maintaining an Organized Bookkeeping System for Your Blog

Tracking Blog Expenses the Right Way

How to Create a Budget for Your Blog

Making Smart Investments in Your Blog Business

Paying Estimated Quarterly Taxes for Your Blog Business

Hiring an Expert to Manage Your Blog Finances

Interested in Learning More?

Schedule a free consultation with our team!

The Business of Blogging Part 1: Separate the Blogging Myths from the Blogging Truths

You’ve been blogging for a while now and realize that more people than just your grandma are reading your posts. In fact, you’ve earned yourself an impressive audience. It sparks a little idea in your mind…what if I could make money from my blogging hobby?

Now what?

The internet is a huge space. There are over 70 million blogs in existence and 95% of those blogs are abandoned. There is room for you. For your blog. And you can finally make money doing what you’re passionate about if you’re willing to put forth a few hours a day and a whole lot of effort. If you’re ready to take your blog to the next level, we’ll walking you through the steps to make it happen.

The first order of business is to separate the blogging myths from the blogging truths. There are plenty of people out there who can tell you how great of a writer/crafter/stylist/chef you are and that you’re sure to be an instant success, but there’s a little more to it than that.

Here are the top three blogging myths and the truths behind them:

Myth #1: It’d be awesome if all you had to do to run a successful blogging business is write killer content, wouldn’t it? Unfortunately, that isn’t reality. There are plenty of bloggers who are smart, crafty, passionate, thrifty, have great style, and enough skill to compose inspiring posts about what they love. Those bloggers, however, are not the ones making full-time incomes from their website. Maybe this is where you’re at. Allow us to gently burst your bubble and inform you that it takes more than great content to make money from a blog. There is a lot more behind the scenes work done for successful blogs, and many bloggers work a full-time schedule, and then some. Understand that you will spend thousands of hours collaborating, negotiating, advertising, designing, posting on social media, and employing SEO strategies to get your blog seen by a large audience. Don’t bank on your writing skills alone; you simply cannot build a successful blogging business without putting in the work.

Myth #2: All it will take is one viral post for your blog to be a success. There are success stories where this is the case, but those are the exception, not the rule. Don’t plan on your blog taking off and making millions, even if one of your posts goes viral. You’ll need plenty of quality content, proper SEO tactics, and probably a little bit of investment money to make your blog a success. In addition to one (or lots!) of viral posts, you’ll need to have a highly functional and user-friendly website that is attractive in design and style, as well as some business management techniques to build a genuinely successful blogging business.

Myth #3: You will make a lot of money in a short amount of time as soon as you turn your blog into an official business. A lot of new bloggers buy into this myth, and it’s easy to do. Often times bloggers focus on their own content and what they are doing, rather than taking some time to watch what others are doing to be successful. There are plenty of people who do what you do and blog about it, but what separates the successful blogs from the abandoned ones is a lot of time and expertise. If you’re serious about your blogging business, you’ll likely need to invest a little bit of money upfront for things like a professional logo design, a website template, your own domain, a business license, and more. Not to worry though, all of these expenses are deductible and can be used to reduce your tax obligation when you go to file taxes.

Successful blogs take a lot of work and a lot of patience to turn into something great. Your blog likely won’t top the “must-read” lists overnight, but with some perseverance, dedication, and a business mindset, you’re sure to see success with it in the long run.

Love this post in our Business of Blogging Series? You might also enjoy:

Obtaining a Tax ID Number and Proper Licenses to Run Your Blog Business

Creating and Maintaining an Organized Bookkeeping System for Your Blog

Paying Estimated Quarterly Taxes for Your Blog Business