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One good thing about running your blog as a business is that you’re able to deduct expenses that are applicable to your profession. Any goods that you pay for, and that assist you in running your business, can be taken off the income you earn as a blogger.

Have a home office? You may be able to deduct some of your household expenses as well.

Your list of deductions should be included in your annual tax filing. You don’t actually have to send the IRS all of your pay stubs and receipts, but you’ll need to keep them on hand in case you’re audited. To simplify the process, all you’ll need is a spreadsheet with the date, amount, to whom, for what included for each item you want to deduct. We recommend entering your receipts at least monthly so you’re not stuck with a stack of receipts and an empty spreadsheet come tax time.

Here’s our top 20 when it comes to deductible expenses for bloggers:

  1. Hosting fees – if you’re still using a blogspot.com or wordpress.com account hosting fees don’t apply, but anything else, and you’re probably paying for your little piece of the internet.
  2. Domain name and registration fees – if you’ve got a .com or .net you’ll have an annual renewal fee.
  3. Internet access fees – monthly bills to have internet in your home? At least a portion of this counts towards a deduction for your business.
  4. Font, photo, or music downloads for your blog
  5. A portion of your computer, iPad, tablet, iPhone or cell phone
  6. That fancy new camera or even your point and shoot
  7. Software such as Photoshop or TurboTax
  8. Graphic or Web design fees – if you’ve recently updated the look of your site or rebranded your logo, this deduction applies for you.
  9. Purchasing ad space on other blogs – money spent marketing or promoting your blog on other sites, even if it’s just running an ad on a fellow blogger’s site. Make sure to keep the receipts!
  10. Self-sponsored giveaways on your blog (find out more about running a giveaway here)“self-sponsored” means you purchased the prize(s) and paid cash, not traded services.
  11. Giving away your services or products – non-profits, charities, or your child’s elementary school silent auction fundraiser all count. Make sure you invoice for your work – show the amount it was worth, but obviously the amount owed would be $0.
  12. SEO services – lots of bloggers pay for Search Engine Optimization services to increase hits on their site. This is a form of promotion/marketing – so it counts!
  13. Blogging conferences, E-book purchases, online class fees – if it’s helping you learn more about your blog or business it counts!
  14. Books, magazines, online subscriptions that relate to your blogging topic
  15. Transportation to that blog conference or a blogger meet-up
  16. Hotel charges – for blog conferences or blog-related business
  17. Office furniture – new desk, chair, lamp, etc.
  18. Business cards, marketing materials, file folders, Post-it notes, etc.
  19. Fees for professional licenses, etc.
  20. Meals during business travel, or coffee at that next blogger meet-up

If this all feels a little overwhelming, consider talking to a tax expert. Here at Mazuma we like to simplify the process for our clients and provide them with the right answer for any of their questions. And that stack of receipts and empty spreadsheet we mentioned earlier – we can take care of that too. Vyde clients simply upload their bank statements and their receipts and we take care of the rest.

To learn more about accounting for bloggers, visit these posts:

Accounting 101 for Bloggers

Taxes for Bloggers

Is My Blog a Business or a Hobby?

How Do I Legally Operate a Contest or Giveaway on My Blog?

3 Tips to Increase Blog Profits

How Do I Pay My Blog Employees?

Can I Pay My Family For Their Help?

Can I Deduct Conference Registration Fees, Travel, and Meals?

Can I Deduct Hosting, Web, and Design Fees?

As a blogger and small business owner you probably wear several hats every day. You’re a writer, photographer, marketing executive, and a myriad of other things. One of those hats is, or at least should be, bookkeeper and tax guy.

You have to know a little bit about everything. So here’s the skinny on taxes for bloggers. (We highly recommend seeking out an expert if you have questions – we’d love to talk about your taxes and become your resident tax guy if it’s a good fit for you!

Estimated Taxes

Due: Quarterly

Estimated taxes aren’t something most traditional employees have to worry about. If you were to look at your pay stub from your employer you’d see that some of your paycheck was being withheld to pay these taxes. The US tax system operates on a “pay-as-you-go” basis.  Where no money is being deducted from your blogging paycheck, you’re responsible to pay estimated taxes quarterly to the IRS.

If you don’t expect to earn at least $1,000 in blogging income, you may be able to avoid paying estimated taxes. But if you do, you’re expected to pay estimated taxes, due on: April 15, June 15, September 15, and January 15 (this is in the following year but applies to the fourth quarter or September 1 – December 31 of the prior tax year.)

Self-Employment Tax

Due: Annually

As far as the IRS is concerned, working as a blogger means you own your own business. Self-employment tax is the combined Social Security and Medicare taxes paid by an employee and an employer. If you look at that pay stub form your employer you’d see these withholdings itemized each paycheck. Since you’re both the employee and the employer, you get to pay both sides of the tax.

Deductible Expenses

Due: Annually

Good news! Because your blog is considered a business by the IRS, you’re able to deduct expenses that are considered necessary to your profession. Deductions typically can be made for just about anything that you use for your business – domain name and registration fees, blog design and logo creation, business cards, office supplies, a new computer or software that you use for your business, and so on.

Learn more about deductible expenses for bloggers and whether your blog is considered a business or a hobby.

To learn more about accounting for bloggers, visit these posts:

Accounting 101 for Bloggers

Top 20 Items Bloggers can Deduct on their Taxes

Is My Blog a Business or a Hobby?

How Do I Legally Operate a Contest or Giveaway on My Blog?

3 Tips to Increase Blog Profits

How Do I Pay My Blog Employees?

Can I Pay My Family For Their Help?

Can I Deduct Conference Registration Fees, Travel, and Meals?

Can I Deduct Hosting, Web, and Design Fees?

You’re a blogger. Not an accountant, right? But the IRS doesn’t count that or an excuse like “I didn’t know” as viable when it comes to your blog and how you handle bookkeeping and tax documentation.

We get the fact that you’re busing writing, promoting, and connecting so here’s what we’d recommend when it comes to bookkeeping, taxes and then financial ins and outs for your blog.

Keep Receipts. At the very least find a large file folder or envelope and stash receipts from blog purchases there. Take it a little further and enter your receipts into a basic spreadsheet, include the date, to whom, and for what. If you’ve got multiple items on the receipt you may want to itemize it on your spreadsheet.

Create a System. If you’re not making a lot of money from your blog it may seem trivial, but it’s a good idea to put a system in place for bookkeeping and paying yourself and any employees you may have. Decide up front what percentage you’ll take home each month, and make sure to save out the appropriate amounts for taxes as well as investing money back into your business.

Set Up a Budget. This is part of the system we mentioned above. It’s hard to manage money, especially when you don’t keep on top of reoccurring expenses, like your blog hosting and renewing domain names or you forget to set some of your income aside to pay quarterly taxes. Budgets help with all that. You can go old school and use a piece of paper or a spreadsheet on your computer or try out a simple app – this one works well and is simple to use.

Bring in an Expert. If you’re really looking to be profitable it might be time to consider bringing in the experts. An accountant will save you hours when it comes to filing taxes and they can advise you on what you can and cannot write off. If you’re needing more than an advisor, consider hiring that expert to complete and file your state and federal taxes or even reconcile your accounts and provide you with a monthly report. Bringing in an expert will provide you with peace of mind, extra time, and hopefully save you a few dollars!

Here at Vyde we’ll do your bookkeeping and taxes and you won’t have to hardly lift a finger. Vyde clients simply upload their receipts and bank statements and we’ll take care of the rest – that way you’ll have more time to focus on what you do best!

It might seem like extra work up front, but following these 4 steps will keep you and your blog fiscally fit and save time in the log run so you’re not buried in piles of receipts and tax forms.

To learn more about accounting for bloggers, visit these posts:

Taxes for Bloggers

Top 20 Items Bloggers can Deduct on their Taxes

Is My Blog a Business or a Hobby?

How Do I Legally Operate a Contest or Giveaway on My Blog?

3 Tips to Increase Blog Profits

How Do I Pay My Blog Employees?

Can I Pay My Family For Their Help?

Can I Deduct Conference Registration Fees, Travel, and Meals?

Can I Deduct Hosting, Web, and Design Fees?

“Do I have to eat all my dinner?” My kids ask me this frequently. So frequently that it has actually has made me ponder on the question…What in life do we actually have to do? Taken literally, I suppose there really isn’t anything in life we are forced to do…it’s just that the consequences can be so bad if we don’t, that we feel it’s required. For my kids, eating all of their dinner is a requirement if they want to have dessert…which usually works for all but one…but we’ll save that for a different post.

Do I Have To Report My Blogging Income?

Likewise, we ask the question, “Do I have to report my business activity on my tax return?” It really is more of a moral question and depends on whether you want to face the consequences of not reporting it.

There is no minimum amount of income that has to be earned before it must be reported on the tax return. Once the IRS has determined you are running a business, you are required (there’s that word again) to report it on your tax return. Even if you lose money, it is supposed to be reported, and in fact will be a tax benefit to you by doing so.

Now, here is the natural question that follows…”Really? Even if I only make one dollar I still have to report it?” My response connects back to the beginning of this post…”You don’t have to do anything…You only have to be willing to face the consequences of your choice.” The consequences of not reporting one dollar of income are certainly different from the consequences of not reporting $1,000 of income.

So What If I Chance It?

Since the IRS’ tax law enforcement methods are a little more effective than copyright enforcement methods, it is good to at least be aware of what the consequences are. The following potential penalties are applied to the amount of tax you end up owing if/when the IRS finds out that you didn’t report:

  • Late Filing: 5% per month that you are late in getting your return filed
  • Late Payment: 1% per month that you are late paying taxes owed
  • Negligence: 20% for not doing your due diligence to inform yourself of what was required of you (sorry, now that you have read this post, you probably won’t fall under this category, but closer to the “F” word one below …just kidding, there is some wiggle room still)
  • Substantial Understatement: 20% for understating what the IRS considers a “substantial” amount of your income
  • Fraud: 75% for willfully, intentionally not reporting your taxes accurately

If you get audited, an IRS agent will go through your records, transaction by transaction in some cases, and find out how much income you should have reported on your tax return. Any of the above penalties that apply to you will be added together and multiplied by the amount of taxes you should have paid.

So I guess this is really a subjective question. After all, 100% of ten bucks isn’t much of a consequence. So if you are in that boat, the pill may be easy to swallow. The uneasiness comes when you don’t know how big the pill might be. Vyde’s hassle-free accounting service helps with that, but you can also put in the time and energy to figure it out. The next post in our series will give you some help for running your own numbers.

If you have any questions about your circumstance, don’t hesitate to contact us.

Disclaimer: We know our readers aren’t dummies, but have to say this just in case… The information provided above is for reference only and not for your specific situation. It does not cover every scenario and may not apply to yours. Please consult us or another professional before executing any of the above advice.

Another question we hear often is “If a company gives me something for doing a review for them, do I have to report it on my tax return?” For any established blogger this can be a real issue. When you start adding up everything that you’ve received for doing reviews…trips, electronics, gift cards, appliances, etc. it may become a significant amount.

Tax reporting for bartering is pretty straight forward. The quick, unwanted answer to the question, is: Yes, the IRS does expect you to report the “fair market value” of goods or services received in a business related exchange. And what is “fair market value”? Basically the price you would have paid for it if you bought it off the company’s shelf, or what they would have sold it for to a regular customer.

I know this kind of takes the glam out of being a blogger, but that’s the IRS’ specialty…putting a damper on things. Did you know that until the early 1900s there was no income tax in the United States at all!? Nevermind, we won’t go down that road…

Know this about bartering: it only applies to business transactions. So if you aren’t technically providing a business related service or good in return, you may be able to justify not having to report it on the tax return. Let us know if you would like to bounce your situation off of us.

Remember, Vyde doesn’t charge by the hour…that’s so old fashioned.

If you’re planning on holiday customers, employees or client gift giving,  this year, we’ve got you covered! We covered what to give and who to give it to,  what’s tax deductible, and now we’re talking Do’s and Don’ts of holiday gift giving.

holiday gift giving for clients

DO:

-Give. Don’t promote. You have all year to promote your business; allow the holidays to be a time to focus on your clients and let them know how grateful you are for them.

-Send a card. A handwritten card or personal email can be meaningful and memorable. Gift giving has lost its personal touch over the years and your client will love getting a special note from yours truly, with or without a gift.

-Keep an ongoing list of employees, clients, service providers, and others who make your business great throughout the year. The holidays are a busy time of year, making it easy to forget someone. Keeping a small list throughout the year will ease your holiday stress and keep you from overspending at the last minute.

-Set a budget. Not all client gifts are equal, but you do need to have a budget in place before you start shopping. Using a small business bookkeeping system can help you keep to a budget. Check out our post on tax deductible gifts (link) and amounts here before deciding how much to spend.

-Check into a company’s gift giving and receiving policy before shipping your presents. The larger the company, the more likely a specific policy is in place. You don’t want to spend unnecessary cash on a contact who is not allowed to accept your gesture. However, a hand written card will almost always suffice and show your genuine appreciation! 

DON’T:

-Don’t wait until the last minute. Keep in mind many people take a lengthy break from work to travel during the Christmas season, so sending a gift to a client’s office on December 23rd may not work. Try to have your gifts sent out early in December to ensure on-time delivery.

-Don’t feel pressure to run out and buy a nice gift for everyone who sends you one. Again, a quick way to go over budget and not always necessary. However, be sure to send a nice thank you card expressing your gratitude or a holiday card, and add that person to the list for the next year, if need be.

-Don’t send gifts that are too personal or religious. Keep it professional in the work place and avoid gifts like clothing, perfume, and other items people have personal (and sometimes very strong!) opinions about.

-Don’t be a brown-noser. Give gifts because you’re grateful for your client, employee, boss, etc. and keep it at that. Don’t try to out-do another employee or company and keep in mind that as long as your gift is genuine and sincere, the recipient will appreciate the gesture.

company’s gift giving

The best holiday gift to give comes from the heart. Be genuine and sincere and your clients and employees are sure to appreciate the heartfelt gesture.

FAQs for Holiday Gift Giving to Clients, Customers, and Employees

1. What’s the primary approach during the holiday season for gift giving to clients? Focus on giving rather than promoting your business. Use the holidays as a time to show gratitude and appreciation for your clients’ support.

2. Is sending a card a meaningful gesture in holiday gift giving? Absolutely! A handwritten card or personal email adds a memorable personal touch, making your client feel valued, even without a physical gift.

3. How can I avoid last-minute holiday stress while planning gifts? Maintain an ongoing list throughout the year of employees, clients, and contributors. This helps prevent oversights and last-minute rushes during the busy holiday season.

4. Should I have a budget in mind when selecting client gifts? Yes, setting a budget is crucial. Consider using a small business bookkeeping system to manage expenses and ensure gifts are within a reasonable range.

5. What are some things to avoid when gifting during the holiday season? Avoid waiting until the last minute for gift sending, feeling obliged to reciprocate every gift received, selecting overly personal or religious gifts, and trying to impress with extravagant gifts. Keep the gesture genuine and sincere.

The holiday season is the perfect time to show your clients and employees just how much you appreciate them. However, figuring out what to give, when to give it, and what’s tax deductible can be a daunting task. Vyde’s made it easy with our comprehensive, deductible focused Business Holiday Gift Giving Guide.

Finding a gift that is sincere, useful, meaningful to all clients, and tax deductible sounds like a whopping job. Not to mention sending it out on time, staying within a budget and somehow making it personal. So how can you wrap all of this up in one business holiday gift?

Is a Holiday Business Gift Tax Deductible?

Let’s start with the numbers. What is tax deductible when sending a business holiday gift to a client?

Like so many other tax deductions, there is a limit on how much you can deduct when it comes to gifts. Right now, the limit is $25 per recipient per year.

Perhaps you’re especially generous throughout the year and send your clients many gifts. It’s important to know that only $25 per year per recipient is actually deductible. So, if you sent your favorite client three $25 gifts this year totaling $75…you guessed it, you are only allowed to write off $25 for that client.

How about prepping that fabulous gift and sending it off to clients? Wrapping paper, cards, scissors, tape, ribbons and bows are all tax deductible so fancy it up before shipping it out! And when you get to that mile-long post office line this December, keep your receipts because shipping and stamps are deductible as well. These costs are an addition to the $25 per recipient limit, so the actual gift itself can be valued at $25 and these expenses are still deductible.

If the $25 limit feels restrictive to you, there is a circumstance that can help you deduct more—and probably cut your work in half, too. According to the IRS, if you give a gift of “entertainment,” you can deduct 50% of the cost.

Business Holiday Gift Giving Guide

Examples of entertainment gifts are concert tickets, sporting event tickets, movie passes, restaurant gift cards, vacations, hotel stays, etc. Clearly that $25 limit per recipient can quickly be surpassed in these categories, so your deductions may actually be greater than $25 each. Your clients are sure to love the gift of entertainment and you won’t have to bother with the ribbons and bows. In fact, most of this shopping can be done online and sent to your client electronically, so win-win!

FAQs for Vyde’s Business Holiday Gift Giving Guide

1. How can I combine sincerity, usefulness, meaning, and tax deductibility into one business holiday gift?

Finding a gift that ticks all these boxes might seem challenging, but it’s not impossible. Vyde’s comprehensive guide offers suggestions tailored for such occasions, ensuring your gift is thoughtful, practical, and tax-deductible.

2. Is a holiday business gift tax-deductible?

Yes, holiday business gifts can be tax-deductible. However, there are limitations. Currently, the IRS allows a deduction of up to $25 per recipient per year. It’s crucial to stay within this limit to maximize tax benefits.

3. What expenses related to sending out business holiday gifts are tax-deductible?

Several expenses associated with preparing and sending business holiday gifts are tax-deductible. This includes the cost of wrapping paper, cards, shipping, stamps, and other related items. These expenses are separate from the $25 limit per recipient, allowing for additional deductions.

4. How can I exceed the $25 per recipient limit for tax deductions?

One way to surpass the $25 limit is by giving gifts of “entertainment.” According to IRS guidelines, you can deduct 50% of the cost of entertainment gifts, such as concert tickets, restaurant gift cards, or vacations. These gifts often exceed the $25 limit, providing greater deductions while offering clients memorable experiences.

5. Where can I find more ideas for business holiday gift giving?

For additional ideas and tips on business holiday gift giving, explore the comprehensive gift-giving guide provided by Vyde. It covers everything from gift selection to recipient considerations, ensuring your gifts are both meaningful and tax-efficient.

For more ideas on business holiday gift giving, visit the rest of our gift giving guide:

What To Give and Who To Give It To

Do’s and Dont’s of Client Gift Givingp

 

You asked and Mazuma is delivering–we’re talking business expenses today!

What business expenses are tax deductible?

The broad answer to the often asked broad question comes from IRS Publication 535 “To be deductible, business expenses must be both ordinary and necessary. An ordinary ex­pense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or busi­ness. An expense does not have to be indispensable to be considered necessary.”
So as you think about your business, ask yourself, “What do I need to pay for, in order to produce the income my business generates?” Or another way you might word it, “What do I pay for that helps my business succeed in producing income?”
The areas that get a little “gray” and confusing are the things you pay for that benefit your business AND you personally. Such as food, entertainment, or travel. For example, did you have to buy that nice steak at Ruth’s Chris Steakhouse for your client in order to keep your business doors open? Probably not, but did it benefit your business? Yes, filling a client’s belly with melt in your mouth steak increases the chances that they will stick around a little longer. Because of the nature of this “business meal” expense, in that it benefits you personally to some degree, results in the IRS saying you can deduct 50% of the business expenses on your tax return.
Another example, what about your car? Certainly if you didn’t have means of transportation, your business would not be able to operate. Therefore, the amount of your car expenses you can write off depend on the portion of time it is being used for business, versus used for personal purposes. Again, the car benefits you personally at times, so the IRS will not let you take a deduction for all of the expenses. If you drive 10,000 miles during the year, and 8,000 are used for business meetings, and necessary business travel, then 80% of the total car expenses would be for business expenses and thus deductible on the tax return. Or, in order to meet the same objective, the IRS will allow you to deduct 56 cents for each business mile traveled during the year, instead of a percentage of actual expenses.
Here is a list of some examples of deductions that might be applicable to bloggers, but any business that incurs these costs could likely deduct them:
– Advertising and promotion
– Software
– Blog templates or designs
– Books, magazines, online subscriptions
– Camera
– Cell phone
– Cell phone services
– Chairs
– Computer accessories
– Computer purchase
– Computer software
– Conference fees
– Contest prizes
– Crafts for display on blog
– Credit card fees
– Data storage
– Design services
– Desks
– Domain name registration
– Education costs
– Electricity
– Entertainment related to business
– Envelopes
– File cabinets
– Folders
– Food during business meetings
– Giveaways
– Health insurance
– Home improvements
– Home maintenance and repairs
– Hotels
– Images or stock photos
– Internet access fees
– Internet hosting fees
– Paper
-Parking fees
– PayPal fees
– PO Box
– Podcasts
– Postage
– Printer
– Printer ink
– Professional associations
– Professional services (CPA, Attorney)
-Props
– Rent
– Router
– Search Engine Optimization
– Travel
-Utilities
– Wages
– Webcam
– Webinars
– Workshops
What constitutes a “home office”? How do I factor that into my taxes?
According to the IRS, a home office is only a “home office” if the space is used “regularly” and “exclusively” for business activities. This means the are of your home needs to be segregated from other common use areas, like in a room or area separated by furniture. Primarily business activity, such as meetings with customers or working on your computer, happens in this area. The area can’t double as a play room for your kids when you are not there. It can’t be where your kids come to do their school work when you are not there. It’s a designated space used for your business activity, and if an IRS agent walked into your house unannounced, you would be able to point the area out and demonstrate that it is office space and indeed part of your business expenses.
The IRS recently issued a “safe harbor” rule that allows you to take $5 per square foot of home office space, up to 300 square feet.
If you don’t use the safe harbor method, you take the office space square footage and divide it into the whole square footage of the house to get a ratio. Then you multiply that ratio by the total utilities, maintenance, mortgage interest or rent, expenses you paid during the year to get your home office deduction.

Tax day is finally here! For some of us, that means a sigh of relief. For others, it’s the most stressful day of the year. And still others really couldn’t care less because they filed their taxes long ago and have already purchased a new lawn mower with their return. Regardless of which category you fit into, we all file them, we all pay them, we all worry about them. We’re talking about taxes, baby! And now that April 15th has come, why not read up on a few bits of rather meaningless, but totally interesting facts about TAX DAY!

1. The Gettysburg address is 269 words, the Declaration of Independence is 1,337 words, and the Bible is only 773,000 words. However, the tax law has grown from 11,400 words in 1913 to 7 million words today.

2. Nearly 300,000 trees are cut down yearly to produce the paper for all the IRS forms and instructions.

3. The IRS sends out 8 billion pages of forms and instructions each year. Laid end to end, they would stretch 28 times around the earth.

4. The IRS employs 114,000 people-twice as many as the CIA and five times more than the FBI.

5. Even Albert Einstein—sometimes referred to as the smartest man in the world—wasn’t all that wild about taxes. He once said, “The hardest thing in the world to understand is the income tax.”

6. The average number of days a person worked to pay his or her 2009 taxes was 103. (As you can imagine, that number has increased by now.)

7. Excise taxes are also called “sin taxes.” They are taxes on alcohol, tobacco, and gambling.

8. Americans spend over $27.7 billion every year doing their taxes.

9. Wealthier Americans pay higher taxes than middle- or lower-income earners. The wealthiest 1% of the population earns 19% of income but pays 37% of the income tax. The top 10% pays 68% of the tab. The bottom 50% earns 13% of the income, but pays just 3% of the taxes. This does not include payroll taxes for Social Security and Medicare.

10. American taxpayers spend over $200 billion and 5.4 billion hours working to comply with federal taxes each year, more than it takes to produce every car, truck, and van in the United States.

And there you go! Now you can share all of your brilliant tax day knowledge with friends and neighbors who are, like us, glad that April 15th has come and gone yet again.