The income you earn as a blogger can come from several different sources. You might earn direct income from selling products through your blog, or you might make a nice sum on affiliate marketing or advertising. No matter how you bring the money in, you need to be aware that all of it is subject to federal and state tax laws. Filing taxes on your blog income can keep you out of trouble with the tax agencies and it also allows you to list the write-offs on your expenses over the past year to keep your business running.
Here are some more reasons why you must file your taxes:
Tax Forms Provide Proof of Income
If you’ve had enough success with your blogging enterprises, you might not even have to work outside of the home anymore. That’s great for pocketbook and your blogging business, but it may not be so great when you want to make your next major purchase. When you don’t file taxes on the income you bring in from your blog, there is no way to prove that you make that income when you need to list it on a loan application. Your tax forms, however, are an excellent record of the money you have brought in through your freelance work over the past year.
Write-offs Help Offset Expenses
When you work as a blogger, you provide your own office space and equipment. Everything that contributes to your ability to work is something that can be listed as a write-off on your taxes. If you work from home, you can list a portion of your electricity, heating, cooling, natural gas, mortgage or rent, and anything else that is needed to keep the work space comfortable and available. Your equipment can also be written off. The money you spend for your internet connection is something else you can receive a return on through your taxes. Contact an income tax advisor to get a full list of your tax deductibles. If you neglect to file taxes each year, you are giving up the ability to be compensated for the money you’re spending to keep your blogging business in operation.
Planning in Advance Lets You Save for Tax Expenses
The taxes will eventually have to be paid, whether you’re ready or not. You can do yourself a favor by preparing for those taxes in advance rather than waiting until the last minute. Set aside a percentage of your earnings every month so that you will have the money ready when the tax bill comes due. You can find information about your state tax rates online so that you know exactly what you should set aside to cover your tax liability.
Consequences of Not Filing Can Be Expensive Later
In the end, the government will eventually figure out that you have some untaxed earnings. It might take several years, but your tax bill will come due. Remember that it was the IRS that caught Al Capone, not the police. Taxes should be taken seriously and accepted as one of the responsibilities of being in business. Unpaid taxes can collect fees and fines that you could avoid simply by paying attention and paying your taxes when they are due in the first place. Ignoring taxes can be one of the most expensive choices you can make as a successful blogger.
Not paying your taxes might seem very tempting for some bloggers, but paying your dues will give you more benefits in the long run. If you want to know how to file your taxes, visit R&G Brenner, the oldest and largest privately owned all-year income tax preparation company in the United States.