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Blogger tax deductions

Blogging is supposed to be free right? Who would spend anything for blogging? One of my friend asked me this question. A lot of people don’t realize the amount of time AND money that goes into blogging. Yes, it can be free but free blogspot or wordpress.com can only get you so far. For control freaks and blogging addicts like me who want total control of the blog, we have to spend some money – hosting and domain at the very least. The bright side of this is we also have a ton of blogger tax deductions (or general online or home based business tax deductions that will work for any online freelancers). As I promised in my previous 2010 tax deduction post, here are the list of expenses (where applicable) you can deduct as a blogger or online freelancer.

List of Blogger tax deductions

Equipment and tools

If you have equipment that you use exclusively for blogging activities they are legitimate blogger tax deductions.

  1. Computer
  2. Computer accessories (Mouse, keyboard, router, etc)
  3. Printer
  4. Fax machine, dedicated fax machine.
  5. Printer accessories- toner, paper or special photo paper.
  6. Web camera, if you have webinars and podcast
  7. Mic, same as above.
  8. Camera (if you have a photo oriented blog)
  9. Cell phone or secondary business phone line.
  10. External hard drive for dedicated back ups.Blogger tax deductions
  11. Voice recorder, if you voice-to-text your blog entries.
  12. Smart phones or any other gadgets used exclusively for blogging.

Internet related expense deductions

  1. Web hosting
  2. Domain fees
  3. Any premium word press plugin that you paid for, like Scribe SEO
  4. Premium word press theme (e.g. Thesis theme or Woo themes)
  5. If you use a newsletter service, like Aweber to manage your subscriptions, the monthly fee is deductible.
  6. Web design fee, if you hired a professional to work on your web design
  7. Graphics – Did you pay someone to create a logo or a header for your blog? That is deductible too.
  8. SEO services
  9. Social media consulting fee
  10. Stock images from sites like iStockPhoto
  11. Research tools/software fee –If you use a research tool like Market Samurai or Traffic Travis to research keywords, that is a valid blogger tax deduction.
  12. Paid research site subscription like LexisNexis.
  13. Other Software. For example, you purchased Photoshop for making pretty pictures for you blog or antivirus for the computer that you use exclusively for blogging.
  14. Blogging platform fees – example : Typepad fees
  15. Online advertising – Ad words, advertising in other blogs, etc.
  16. Any fee you have to pay for webinar creation or video editing, etc.
  17. The internet charges itself. If 80% of you internet usage is for blogging, 20% personal, 80% of your internet charges are deductible.

Communication

  1. If you have a secondary phone line, the charges for that.
  2. If you have just one phone, make extensive records on what was personal call and what was business call, time, purpose and duration of the calls. The business part of the charges are deductible.
  3. Smart phone/data charges
  4. Mailing charges (stamps, supplies, etc)
  5. P.O.Box fees
  6. Fax line charges

Advertisements and promotions

  1. Offline advertisements – flyer or any sponsorships
  2. Giveaway sponsorships you participate in, with other blogs
  3. Photo session fee (if you take any headshots for your blog or for any media promotions)

Education and knowledge tax deductions

  1. Any classes/courses you take to further your knowledge on your field (No, you can’t deduct that wine tasting course, if you don’t blog about wines).
  2. Library book charges (though as a personal finance blogger, I have to say this is a real waste of money, please avoid any late fee, library or credit card or whatever it is)
  3. Conference registration fees (BlogHer, BlogWorld, etc)
  4. Magazine subscriptions related to your field that you would need for blogging.
  5. Any books, videos, ebooks you buy to make your blog better.

Travel & entertainment tax deductions

  1. Air fare to the conferences and client meetings.
  2. Rental car
  3. Hotel charges
  4. Meals while traveling for business
  5. Laundry while traveling for business
  6. Long distance charges

Networking

  1. If you pay to belong to any professional organizations (example pfblogs.org)

Business expenses deductions

  1. Business incorporation fee
  2. License renewal fee
  3. Liability/Insurance fee
  4. Salary or any fees you paid for your employee (W2 form) or contractors (1099) or even if you outsourced some task or hired someone off ODesk or Elance to help with your business.
  5. Tax preparation fee
  6. Book keeping/accountant fees
  7. Banking fees
  8. Business credit card annual fee
  9. Trademark filing fee
  10. Any charitable donations your business makes
  11. Trade show fees
  12. Paypal fees
  13. Any money you pay to others for their services – babysitting fee when you attend a meeting or the pay for your virtual assistant or if you pay your son $10 to clean and organize your messy work desk :)

Supplies and stationary

  1. Business cards
  2. Letter head
  3. Any stationary used for business – Calendars, Pens, post its…

Home office deductions

Blogger home office deduction is not different than any other small business tax deduction.

  1. Part of rent or mortgage (for the area that is used for business exclusively and regularly)
  2. If you rent a separate office for blogging, that is 100% deductible.
  3. Part of utilities
  4. Home/Renters insurance
  5. Chair/Desk

Some people say lot of tax deductions is a surefire way to get audited. I personally feel that as long as you follow the rules and are truly eligible for these blogger tax deductions, IRS doesn’t have a problem. If we have meticulous records and separate our personal expenses from business expenses very clearly, we should be good. These expenses sure add up fast. After all the time and money we put into our blogs, I am all for taking every single deduction I am eligible for. Won’t you?

{ 22 comments… read them below or add one }

Robert @ The College Investor

Great list! I was looking for this earlier! Thanks for putting it together!

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Yakezie

Nice one!

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Sustainable PF

Agreed – very good list. It will come in handy for us next year when we have income to report.

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LaTisha @FSYAonline

Very comprehensive list, thanks for the information. I need to keep this so I can keep track for this year…

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krantcents

Good list! If I am blogging in my car (not moving), can I use my car as a deduction? Only kidding. I noticed all our time is not deductible! Oh well! Generally speaking, I would be real careful about deducting office expense. The IRS uses that as a red flag.

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Suba

@Krant I think a lot of people go “easy” on the home office and deduct everything from their door mat to bedroom lights :) I think if I have proof for all the expenses and they are within the rules, they won’t have a problem. But this is IRS we are talking about and the Government is broke, so we never know…

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Julie @ The Family CEO

Very comprehensive list! It’s always such a balancing act, isn’t it? During the year I try to keep expenses to a minimum and yet at tax time I am wishing there were more!

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Lisa @ Cents To Save

This is a great list. I am going to bookmark it so I can use it as a reference.

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Everyday Tips

Your lists are so comprehensive and valuable Suba. Really good job!

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Suba

Thanks, Everyone.

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101 Centavos

Great work, Suba. This one is definitely a bookmark.

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Financial Planning Tips

Wow amazing list. I think you pretty much hit it all. How do you keep track of everything – software or spreadsheets?

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Suba

@fptguy right now, its been in a spreadsheet. But I also use Mint and mark my business purchases with a “business deductible” tag. If next year my spreadsheet and mint list matches, I might move to mint alone. As this is my first year of deducting expenses I am still experimenting.

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Ken @ Spruce Up Your Finances

Very comprehensive list. Thanks for sharing as I think you may have list them all, even for the ones that other bloggers think are not deductible.

Bloggers need to be more careful about claiming tax deductions though. As in the case of a computer, if you only have one computer that you use both for personal and blogging, you may not be able to deduct the whole thing. Same thing works with the home office tax deductions as there are specific requirements or test that you have to meet before you can start deducting utilities, insurance, etc.

Anyways, great job again for this list!

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Sunil from The Extra Money Blog

great list

i learned early in life that IRS audits are not too bad. once i got $800 more than i already has gotten after an audit concluded. the other time was a wash.

wonder when the next time will be :-)

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Zahid

This is a great list…

Try to use the categories provided by the IRS on Schedule C before creating your own. I see people having all sorts of names under Other Expenses even though it is possible to use the ones provided by the IRS. For e.g. Don’t use the acronym “SEO” or the phrase “Link Advertising.” Use the category Advertising on Schedule C line 8.

FYI: Majority of the items listed under “Equipment and tools” above need to be depreciated and not used as an outright deduction.

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Financial Samurai

What a great list! Popped up as #1 under “list of blogging expenses” :)

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Karen Bryan

I certainly keep a note of all my expenses for when I fill out my annual UK tax form. I think as long as you don’t take the mickey and try to inflate your expenses and keep all receipts, there is no problem even if you are audited.

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The Nerdy Nurse

What if I don’t have a home office, but I blog from my living room. Can I deduct part of my power because I need the internet and power to blog?

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Suba

You can deduct part of the utility, but you have to calculate “exactly” how long you used for business and personal use and divide the total by that. When I did the calculation with my $35/month internet, it was very low amount compared to the total, I decided it was not worth risking. But def. do the calculation and see.

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Juice

I write about my pets, their health problems and I use them as models when I test earthquake preparedness products on my blog, usually about a third of my monthly blog posts involve my pets. over the course of my year, my pet blog posts consistently hold up as my most popular. Can I deduct the pet expenses the way people can deduct expenses of guard dogs?

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karen

What if you need to buy products for reviews ? would that be deductable ?

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