Paying Taxes on Online Blogging Income Simply
It’s getting to be that time of the year: tax time. Well, not exactly. The actual tax date is April 15, 2008, but with your W-2s rolling in and 2007s finances finished from your blogging or online business, you might as well get started on your taxes.
Disclaimer time: I’m not a professional tax advisor, so don’t take these recommendations as fact. I’m just trying to help out anybody new to the blogosphere/online business arena. It’s probably best to always get professional help. We’re not responsible for any mistakes you make. Always consult the IRS website and their tax information for sole proprietors.
So paying taxes for your online business is really not that difficult if you are not looking to get creative. Until your revenue starts to become a major / full-time income source, filing as a sole proprietor is your easiest option. Note, it may not be your best, because good tax preparers will always be able to find some write offs that may benefit you, but that requires quite a bit of time or money. If you’re a noob and/or not a meticulous bookeeper, this may be your best option.
For a barebones federal tax filing for your online income, you’ll only need to file the following:
- W-2 (assuming you’re an employee somewhere else)
- 1040
- Schedule C EZ
Where to file? E-filing may be the easiest, and this can be done for free online at many places. I like H&R Block’s Taxcut service.
Basically, all you have to do is document your online revenue (Google Adsense, Text-Link-Ads, Linkworth, etc.) and your business expenses. But for this barebones tax filing, you’re probably not going to be able to get away with deducting your laptop, ISP fees, travel fees, entertainment fees, and depreciation. Instead, I think it’s best to stick with your actual business expenses that can all documented. These probably include, but are not limited to, the following:
- Hosting Fees
- Domain name fees
- Web Design Fees
- Any expenses from contract / freelance work (employees require a lot more paper work, and I assume you can’t include bills from yourself to yourself for work done unless you opt to ALSO fill out the self employment form: Schedule SE)
Generally, this is all that needs to be done if you want to pay your online business income as a simple, sole proprietor. Hopefully this post may give you a better general idea for what is required from you. As mentioned earlier, this probably isn’t the best way to go about filing since some sort of corporation would probably have much greater benefits, but this is easy.
Before filing, research this much more thoroughly at the official IRS website and its page on Sole Proprietorships.
Share your thoughts!!!