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The first year I filed my taxes as an individual and on behalf of my LLC was so nerve wracking. I had so many questions but I did my best to file taxes according to the law. The next year, I hired a CPA to help with my blog taxes.
If you’re new to blogging, I definitely recommend working with a tax professional or using a software like TurboTax to do your blog taxes. Here is what to expect in any case!
Remember, none of the information in this post is considered legal or financial advice! Consult with a professional before filing your taxes as a blogger.
This guide pertains to filing US taxes as an American blogger.
Calculating Your Blog Income
If you’ve worked as a salaried employee, you are probably used to receiving W2 forms from your employer. Since you’re your own boss in blogging, you need to calculate your total blog revenue on your own.
Personally, I keep a detailed spreadsheet of all my blogging income throughout the year. I update it any time the smallest amount of money enters my bank account. I reconcile it at least once every 2 weeks to make sure I’m not missing any bank transactions on my excel spreadsheet.
These are the tax forms you’ll come across as a blogger.
The 1099-MISC form used to be the main form bloggers received from companies and ad networks they received earnings from. It was a way to report various earnings and miscellaneous compensation. You may see it referenced on older blog taxes articles. However, they are no longer used for self-employment earnings.
They are primarily used for rental income, prizes, awards, and other income payments. These only get sent if the contractor made more than $600 over the tax year.
When it comes to blogging taxes, the 1099-MISC form has largely been replaced by the 1099-NEC form, which stands for “Non-employee Compensation.” The rise of the self-employment and gig economy has caused the IRS to make some changes!
The 1099-K form is used to report Payment Card and Third Party Network Transactions. Online payment processors such as PayPal will send you this form, but only if you made more than $20,000 during the last tax year from that processor.
There are two types of self-employment taxes you’re responsible for paying as a blogger! If you earned $400 or more in self-employment income, you must pay these SE taxes. Even older bloggers who are on Social Security or Medicare must pay these taxes.
Social Security and Medicare Taxes
Since you are now your own employer, you are responsible for paying these additional taxes that normally would be covered by your employer.
The current self-employment tax rate is 15.3% as of 2022.
12.4% goes to social security (benefits for old age and disability insurance) and 2.9% goes to Medicare.
Luckily, you can deduct the employer-equivalent portion of your self-employment blog tax when determining your Adjusted Gross Income (AGI) to pay your Income Taxes.
As a blogger, you’re responsible for paying Income Taxes just like everyone else. As long as your income is more than your expenses, you will owe tax to the IRS. To file income taxes as a blogger, you’ll need to fill out Form 1040, plus pay estimated quarterly taxes during the year.
Estimated Quarterly Taxes
Since the IRS doesn’t trust self-employed people to pay the money they owe at the end of the year, they prefer you pay in installments 4 times per year instead.
However, this can be frustrating because you need to pay your taxes in equal amounts based on your total earnings for the year. Since my Q4 earnings are way higher than my Q1 earnings, it’s hard to predict how much I’ll make in Q4 and pay taxes on that amount divided by 4 in April!
You can use Form 1040-ES to figure out your federal estimated tax.
The quarterly tax deadlines are as follows:
- April 15
- June 15
- September 15
- January 15 (of the following year)
If the 15th falls on a weekend, you have until the following Monday to pay your estimated taxes.
Luckily you can pay these fairly easily online using IRS Direct Pay.
When filing your taxes for the year, you’ll need to fill out the Schedule SE form and the standard income tax Form 1040.
Be sure to read over the IRS official guide to Estimated Taxes.
You have to be very careful not to underpay your taxes because you might get hit with a penalty. To protect against this, opt to go with the safe harbor rule.
You can avoid an underpayment penalty if you pay at least 90% of the tax you owe for this current tax year, or 100% of the tax you owed during the previous tax year, if your adjusted gross income (AGI) was under $150,000 during the last year.
However, if your AGI was greater than $150k, then you need to pay 110% of the previous year’s tax during the current tax year to avoid a penalty.
Furthermore, if you file as married filing separately, the threshold drops down to just $75,000.
Lastly, if you expect to pay less than $1,000 in taxes, you don’t need to worry about underpayment and you can just pay your taxes at the end of the year.
State Estimated Taxes
Don’t Forget: Most states with income tax require you to pay Estimated Taxes, too! Check out the Estimated Tax laws for your individual state to make sure you pay those taxes in a timely manner.
Here are a few quick links to some states’ Estimated Tax guides:
Tax Write-Offs & Deductions for Bloggers
One of the benefits to forming an LLC is the ability to write off certain business expenses come tax time!
Most bloggers know that they can deduct expenses such as their hosting and domain name from their income, but there are actually a ton of other expenses you can deduct as a blogger.
Any expense that is necessary to your business can and should be deducted from your gross income.
I recently took out a Chase Ink Business Credit Card and this has helped me enormously in separating my business and personal expenses. I can simply export all my business transactions and pop them into my Financial Statement excel.
Here are a few common blogger write-offs to add to your list:
- Domain Name: Bought a domain? Renewed a domain? That’s a blogging expense to deduct!
- Web Hosting: Your monthly or yearly web hosting fees are deductible as a blogger.
- New Camera Equipment: Any new cameras or equipment used to run your blog as a business are deductible.
- Health Insurance: You can deduct the cost of health insurance as a self-employed blogger.
- Home Office: Be sure to take the home office deduction if you write your blog posts and do business from home.
- Internet and Phone Bills: Deduct some or all of the cost of your internet and phone bills related to business.
Filing taxes is never fun, but it must be done! I hope this guide to self-employed blog taxes was useful to you!