- Hobby blogging – blogging done specifically as a hobby for fun and creativity
- Side income from blogging – Blogging done on the sides to generate additional income
- Full time blogging – Blogging as a full time business
In this article, you will learn how you need to file your income tax as a blogger belonging to one of these groups. It is essential to understand that if you are making money from your blog then you will need to pay taxes for that income.
Income Tax for the hobby blogger
The hobby blogger will blog primarily for sharing interests, telling stories and documenting general aspects of life. The primary concern in these types of blogs is not to make money. During the initial stages of blogging, it can feel a bit difficult to be differentiating between your hobby and business; in fact it is quite common to be not generating any income in the initial few months and years also. Thus, you will need to decide if you are indulging in hobby blogging or business blogging. Although this shall depend a lot on your own mindset.
Basically in order to transform your blog from just your hobby to your business, you would have to start looking it at it as if it were a business. You will need to keep an accurate account of the expenses that you incur in running your blog. In addition to this you will need to maintain regular schedules and your content. You can use this to show the IRS that you have a running business blog.
It is important that you should choose if you want to change your blog from just a hobby blog to a business blog. There are some additional concerns here:
- Your hobby blog will need less amount of work compared to your business blog.
- It will be important that you keep a track of your expenses and profits but accounting is minimal.
- Hobby blogs do not have any freedom to subtract your expenses from blogging.
- You may deduct your expenses only up to the amount that you make as a profit. Thus if case you have a $ 1000 laptop for working on your blog, and you make about $ 500 in profits then your deduction allowance is only $ 500.
But, you must focus on your income and in case it reaches over the minimum taxable income after all the deductions then you will have to file an income tax return on your income.
Blogging as a side income
A blog that is run for generating a side income is similar to full time blogs from the tax perspective. However, it does not require a lot of effort to manage. In the event that your primary source of income is your job which provide you with more income that your blog income, then your income tax filing would be easier to do. You will need to be treating your blog as a form of separate business entity and this will require you to keep a detailed record of all your income and expenses. The procedure requires you to file your income taxes with an attached Schedule C with your Standard 1040 tax form.
Hence, when your blog generates small proportion your income then you may file for blog tax with your personal income tax return along with the Schedule C and you will not need to file for any separate tax return.
Blogging as a full time profession is more complicated with regards to income tax filing. You will have to show that you are generating all or a substantial part of your income from your blog. You will have to file for your blog tax separately as your main income tax file.
You can consider using an online Income Tax Return Calculator to help you calculate your income tax returns.
Running a blog requires you to file for income tax returns in case you generate revenue from it. Hopefully, the information mentioned in this article will have helped you.