Unless you're a business owner, and your blog is an extension of your business website. I think most take up blogging because we think it might be a fun hobby. After we start building up a few blogger relationships, it becomes a really fun hobby.
It's also a great outlet, where we can talk about things we love and enjoy. We can let things out and not drive our close friends and family crazy hearing about all the things we are passionate about all the time. Not only that but we learn and grow, and we in return teach others and help them learn and grow as people and bloggers.
Eventually we start seeing other bloggers getting paid to do things, or cool products or free race entry fee's. It doesn't take long before small business and start ups will start contacting us asking us if we want to try things out for reviews, or run giveaways. One day, we decide to accept one one of these offers. Which is where the topic of this post comes into play.
How do you know if your blog is a hobby or a business?
This is a subject so many bloggers actually get wrong for themselves. There are so many hobby bloggers out there, who are in fact running a small business and probably don't even know it and it could come back and bite them in the butt one day.
So if you want to know where you fall , here are 3 questions to ask yourself.
Do you ever accept product in return for a review?
Do you ever accept money in return for a review or guest post?
Do you sell a product or service on your blog?
Do you run ads on your blog?
If you answered YES to ANY of these, then your blog is a business.
If you answered NO to ALL then you are still a hobby blogger.
I know what some of you are thinking, how can receiving a product or a free race entry mean my blog is a business, not just a hobby? I'm going to give you a little insight into this.
So many think that blogging is just a hobby and trying things out, trying different products are an extension of that hobby. They don't realize if you accept ANY product ANY free thing to write a post on, you are accepting that as payment for that service.
Yes, product and free things given to you in return for your review are in fact payment! If you are making a profit, even by product only. Additionally, you can sure as bet the IRS considers this a business!
Those business who send you those things, write those things off on their taxes and note that they sent them to you.
Do you need to set it up as a business and obtain a Tax ID # and all that jazz?
Maybe, maybe not. That is only a decision you can make after speaking to an accountant regarding your own specific situation.
If you are doing this a couple of times a year, you may be fine to declare it on your own personal taxes. If you are receiving free product, you will list and declare the product value.
However, if you are thinking of making it a steady thing. If you are working with ad agencies and companies whether you are receiving payment, or receiving product frequently, you should consider speaking to an accountant, mostly for your own protection.
The great news for business bloggers!
You also get to declare some things on your taxes as well. Some examples:
* Monthly Hosting Fee's & domain name fees.
* Any purchases you made for your blog.
* Paid blog conferences/workshops.
* Your camera, your computer.
* Software, purchased images.
* Paypal fees.
* Postage fee's (for sending out giveaway prizes.)
* Supplies you used to help create the posts and tutorials for your blog: Ex. ingredients for recipe's, DIY projects...
There are more things, you'd just have to look at your own situation and make that determination.
Yes, I did ask my own accountant if I could count race entry fee's:)
While you can, you have to be very careful, are you making enough revenue off your blog and your race recaps and paid race promotions that the IRS would consider your running these races as part of your business. If the money you are making, out does the cost for the races and you have formulated it into your blog's business plan, then you might be able to.
But if you start doing it, and it's not legit, be prepared to possibly be audited! Before doing this, I highly recommend you seek advice from a professional accountant!
Should you be filing taxes on your blog this year?
Well that is a question you should ask your accountant, I am not a professional to give you any sort of advice on what you should or shouldn't be doing.
Let them guide you and help you determine what is required by you!
My hope is you will now have a better understanding of the difference between a business blogger and a hobby blogger.
Can you go back and forth between the two? Of course! Each year is a different year so if this year you turned into a business by accident, then next year you will know what you need to do, to stay a hobby blogger.
I hope this was helpful for some of you who come across this post!