Tax Deductions for Bloggers

Read about the many deductions available for blogs that qualify as a business.

If your blog qualifies as a business, you'll be able to deduct your business expenses from the income you earn from the blog. If you have a loss, you'll be able to use it to reduce your taxable income from other sources such as wage income and investment income. What type of things can a blogger deduct? Just about anything that is directly related to your blogging business and ordinary, necessary, and reasonable in amount.

This includes:

Design fees: You can deduct the cost of designing your website, including the cost of creating a logo and other graphics.

Online fees: You can also deduct your Internet hosting fees and the cost of obtaining a domain name for your blog. If you receive payments from PayPal, you can deduct the fees it charges.

Software: You can deduct the cost of software you use in your blogging business

Office Expenses: The amounts you spend on your business office are deductible business expenses. For example, you may deduct the rent and utilities you spend on an office. If you work at home, you may be able to deduct the cost of your home office. This deduction is particularly valuable if you are a renter because it enables you to deduct a portion of your monthly rent, a sizeable expense that is ordinarily not deductible.

Outsourcing: If you hire outside professionals to help with your blog, you may deduct the cost as a business expense. For example, you could deduct the cost of hiring an SEO expert to to pay a writer for blog posts.

Business Travel: You may also deduct your expenses when you go out of town for your blogging business--for example, to attend a blog-related conference or workshop. These expenses include airfare or other transportation costs and hotel or other lodging expenses. But, you may only deduct 50% of the cost of meals when you travel on blog business. If you plan things right, you can even mix pleasure and business and still get a deduction.

Meals and Entertainment: The days of the deductible three-martini lunch are pretty much at an end. To deduct the cost of a meal in a restaurant or an entertainment event like baseball game or theatre visit, you must have a serious business discussion before, during, or soon after the event. Moreover, you may only deduct 50% of your business meal and entertainment costs.

Depreciation: When you buy property for your business that will last more than one year, you may deduct the cost a little at a time over a period of years. This process is called depreciation. Examples of depreciable property include computers, webcams, cell phones, and office furniture. However, you don’t always have to depreciate such long term business property. Small businesses have the option of deducting the entire cost of such property in a single year under Internal Revenue Code Section 179 or using bonus depreciation This enables you to get a big deduction in a single year rather than spreading it out over several years.

Supplies: Supplies are business items that you use up in less than one year. They include everything from paperclips to calendars.

Legal and Professional Services: You can deduct fees that you pay to attorneys, accountants, consultants, and other professionals if the fees are paid for work related to your blogging business.

Insurance: If you have a home office, you may deduct a portion of your homeowners insurance. Self-employed people are also allowed to deduct 100% of their health insurance premiums from their income taxes up to the amount of profit they earn from their business each year.

For more details on business deductions, see Deduct It: Lower Your Small Business Taxes, by Stephen Fishman (Nolo).

December 2012

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