This guest post on Tax Deductions for Bloggers is by Kelly Phillips Erb from Tax Girl.
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The most popular question in response to my guest post on Problogger last time was invariably some form of “Can I deduct…?” It makes sense. Figuring out what constitutes income in the blogging world is pretty easy. But what constitutes a proper deduction is another story – and bloggers usually err on the side of not deducting enough (and not the other way around).
Don’t get caught leaving money on the table. Here’s a list of potential deductions that you might have overlooked. Consider:
- Monthly Hosting Fees
- Annual Domain Costs
- Design/Logo Fees
- Internet access fees – this clearly includes DSL and dial-up, but don’t forget charges that you might pay away from your home or office such as wi-fi charges in Internet cafes
- Paid blogging platform charges (such as Typepad monthly charges or “add ons” through WordPress)
- Cell phone usage
- Long distance usage related to your blog – remember that the IRS will not allow you to deduct the cost of your primary land line but you may deduct long distance charges
- Second phone line for business or fax
- Design or word processing software – this includes Photoshop, Illustrator, Word and similar programs for business use
- Keyboards, mice and other periphery
- Web cameras
- Digital cameras – and memory cards
- Film processing for traditional cameras
- Costs paid to use or reproduce images
- Downloaded music or other audio
- Blackberry, Treo, iPhone charges
- Business cards
- Headshots for web site or promotional materials
- Letterhead – remember that printed materials not be professionally printed to be deductible!
- Promotional stickers and items – Frisbees, magnets, etc.
- Web advertising – text and banner ads
- SEO services
- Paid site submissions
- Prizes for giveaways and contests
- Postage – it’s impossible to keep track of every single stamp that you use in your business, so buy a sheet or two and keep them in a folder just for business use
- Post box fees – I recommend this if you’re working from home, it looks professional, it’s inexpensive and it keeps sales people from showing up on your doorstep late at night (trust me, MCI has seen me in my pajamas)
- Transportation – this includes mileage for car transportation, train and bus fare for public transit, cab fare, airline tickets
- Dining while away on business
- Hotel charges for overnight conventions and business travel
- Entertainment for clients
- Professional advice (from lawyers, accountants and tax preparers)
- Tax software
- Accounting software
- Copy paper, memo pads, photo paper
- Office supplies – pens, folders and post-its can add up!
- Books, magazines and subscriptions
- Professional affiliation and membership dues
- Professional informational sites (like imdbPro)
- Paid research sites (like LEXIS/NEXIS)
- Trademark fees and related costs
- Conference fees – such as for BlogHer and BlogExpo
- Promotional sponsorships – golf holes at tournaments, that sort of thing
- Charitable donations – limited to the cost of the production, not the FMV of the final product (in other words, if you blog about quilts and you donate a quilt, your deduction is limited to the cost of the quilt materials, not the FMV of the quilt)
- Backup tapes
- Zip drives
It is by no means an exhaustive list – you make think of more (feel free to add them below). The key is to make sure that the expenses are related to your business. They should also be both “ordinary” and “necessary” (a wide screen TV might feel necessary for your sports blog, but likely isn’t according to the IRS) for your business – if you’re not sure, ask other similar bloggers what they do. You can get some good advice and make great contacts at the same time!
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation. If you have a question, ask the taxgirl.
It’s impressive how that list may change if you live in third-world country. The fact I live in Ukraine gives me right to cross-out nearly half of that list.
I wonder how fuzzy this gets when blogging doesn’t make me money, but rather supports the writing venture that constitutes my primary income.
Either way, I’m SO glad I found this. Wish I’d saved more receipts this year.
Eliza, Kelly would know, but it seems to me that if your blogging counts as PR then it would be a business deduction.
What about it, Kelly?
This is a really awesome list. Considering I pay $55/month for my reseller account, which provides the hosting for the blogs I use to make income, AND that I purchased a digital camera few months back, which I use on a weekly basis for pictures, this is a big help.
this is a great list, and very helpful. but here’s a question i’ve been trying to figure out — for my food/cooking blog, is the cost of the ingredients i use deductible? say, if i have a dinner party and cook three dishes, and all three go up on my blog, but are also eaten by me and my guests, are they deductible?
There is a lot of discussion here but no clear answer. Here is a question. What do you advice if your say earning yearly is around $2K or $3K from google. How much of that can be deducted ? Hosting, Domain Renewal, etc is clearly understood but what else? A book or CD you purchased to learn .php ? would that count? Also say your money from google is now combined from your youtube partner program? would the purchase of a new camcorder you did count ? How much ?
Anyone here giving an approximate answer to this question ?
What % of of the income you make from Google can be deducted ? Anyone ?
Exellent, now I will get some more money back from my taxes :-)!!