Whether it’s your first day blogging or you’ve been at it for years, you probably do it because you enjoy writing, and you’d probably like to make money while you’re at it. The downside for many when it comes to turning a blog into a business is how to handle paying taxes as a self-employed entrepreneur.
If you’re in this situation or think you will be one day, then take a look at these three critical elements of paying taxes that every blogger should know. They will help to save you from stress when tax season comes along.
Understand Estimated and Self-Employment Taxes
While many taxpayers have a simple copy and paste task ahead of them when their taxes are due, self-employed workers do not have the same luxury afforded to them. When you’re an employee, your employer takes care of paying taxes throughout the year, while the IRS wants self-employed individuals to keep up with their own taxes.
The IRS expects bloggers who make a profit to pay estimated taxes so that they can stay up-to-date with their taxes just as salaried employees do. Fortunately, estimated taxes operate on a quarterly rather than monthly basis, so if you expect to have to pay taxes based on your income, you’ll need to submit payments by April 15, June 15, September 15, and January 15 of each year.
Be Mindful of Possible Deductions
Although paying self-employment taxes can seem like a chore, there are many great benefits to self-employment that other workers do not enjoy, such as business deductions. If you spend money on things like office supplies, travel, electronics, or anything else related to your business, you are likely able to deduct all or a portion of these expenses from your taxable income.
The best thing you can do as a self-employed blogger is to keep receipts and records of everything you do for your blogging business. Track everything and use explanations about how it relates to your business so you can save money when taxes are due.
You’ll want to ensure you’re taking the proper deductions, but you will still need to make sure you’re reporting all of your income. This is necessary even if you aren’t receiving the proper forms from businesses who have paid you.
When to Hire a Tax Attorney
If you’ve ever had to do your own taxes, then you know that filing electronically has made it easier than ever before for to file your taxes. It even saves people from making critical mistakes.
Still, many self-employed people find that doing their own taxes can be more complicated with receipts and invoices piling up, and you could find yourself needing help when tax season arrives. If this is the case, don’t hesitate to hire a CPA, professional tax preparation service, or a tax attorney. It’s better to be safe than sorry when it comes to dealing with the IRS. If your blog is beginning to grow and money has started to pour in, make sure you’re carefully following these simple tips to make sure your tax season goes smoothly