If you’re a blogger and aren’t sure if you need to pay taxes, it will depend on whether you’re making money with your blog and whether you consider your blog a business or a hobby. I received the question below and Amanda Henson of High Impact Mom researched the answer and wrote it up.

Dear Blogging Basics 101:
I am building a blog. I thought it would be no big deal to put up a few affiliate banners and make a little spending money, but I didn’t realize that even the smallest income must be reported. Is that correct? I know nothing about how to report my income, or which forms to use. Can you explain how things differ for bloggers (hobby or business?)? Can you recommend a book or article or resource for me? Specifically, if I make less than $600 per year, do I have to file?

Answer: Congratulations on building a blog and great question. Let’s begin by discussing the differences between hobby and business blogging. If you have been lucky enough to make a profit from your blog, or small business, in three out of the last five years the Internal Revenue Service (IRS) considers it a business rather than a hobby. Even more precisely, if you have treated your blog like a business by regularly working on it with the purpose of making a profit, the IRS would also deem this a business and as such would also qualify for business deductions. If your blog is considered a business and you are filing as self-employed, you are also expected to pay self-employment taxes quarterly rather than at filing time.

Wondering what you need to claim? According to the IRS, taxable income is defined as all “employee wages and fringe benefits, and [all] income from bartering, partnerships, S corporations, and royalties.” The blogger must claim all review items, blog conference sponsorships, ad purchases and generally anything you are given that has value. The IRS also states “[y]ou have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions.”

As a business you are also able to deduct certain expenses and losses, though it should be noted that it is not generally a good idea for your expenses to outweigh your income outside of any first year start-losses. In order to make sure you’re taking advantage of as many deductions as you legitimately qualify for, I recommend seeking professional advice from an accountant or tax professional.

The long list of possible blogging tax deductions includes:

• Blog Conference Fees
• Hotel costs for business trips
• Mileage for business trips
• Webinars
• Industry books
• Website hosting fees
• Website design
• Jump drives
• Graphic design fees
• Business cards, letterhead

To learn more about tax law and how it affects bloggers, visit these articles:

• Hobby Versus Business — A Significant Tax Difference via Small Business Legal Blog
• 7 Things That Every Blogger Should Know About Tax[es] via ProBlogger
• How to Avoid Legal Trouble, Income Tax Fines, and Penalties as a Blogger via ProBlogger
• What is Taxable and Nontaxable Income? via IRS
• Self-Employed Individuals Tax Center via IRS
• 101 Tax deductions for bloggers and freelancers via Wisebread

photo credit: Dave Dugdale

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Here are my tips for e-books bloggers need to read.

Do-It-Yourself Blog Critique

Author: Melissa Culbertson
Price: Regularly $14, but on sale for Cyber Monday for $10.50!

Melissa has made a name for herself by doing blog critiques at MomComm.com. She was receiving so many requests for help that she decided to create an e-book. Learn how to engage your audience via strong navigation, design, and content — Melissa will show you how. She’s having a terrific deal on her book for Cyber Monday, so now is the perfect time to buy. The book is usually $14, but for Cyber Monday you can pick it up for you or a blogging friend for $10.50! Just use code CYBERAWESOME on November 28, 2011 before midnight and you’ll get the deal.

Mom Blog SEO

Author: Kelby Carr
Price: $19.99

Search engine traffic is vital to the success of your blog. Learn how to set up your blog so it’s as SEO friendly as possible and find and use tools that will help you optimize your content and site so the search engine bots can find you. Kelby explains the ins and outs of basic SEO and how it affects the success of your blog. This e-book isn’t just for mom bloggers! Regardless of your niche, you’ll be able to use the information in this e-book to improve your SEO rankings and traffic.

31 Days to Build a Better Blog

Author: Darren Rowse
Price: $22.49

This book is one of the best-selling e-books online, helping over 19,000 bloggers build a better blog. Darren recently revamped this e-book and every day in the challenge has been updated for 2012, most days have new further reading and case studies, the workbook now has Twitter integration, and the e-book has seven bonus days (effectively giving you 38 days of content)! So even if your blogger already has the book, they’ll appreciate receiving the updated version.

30 Days to Make & Sell a Fabulous Ebook

Author: Ang England
Price: $11.99

One of the best and easiest ways to earn money from your blog is to create your own product to sell. When you’re a blogger, that usually means creating an e-book. Ang England is a successful e-book publisher and she’s sharing her experience and secrets with you so you can start creating your own e-books and establish a new income stream from your blog. The best thing about e-books is that, after they’re written, they are largely a passive source of income.

Please note that each of these links is an affiliate link. 

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