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Blogging Tax Questions – Is My Blog A Business Or Hobby?
Why do I say this? Because I want to pay it forward, I now want to help other bloggers start making money and do what they want to do, travel, quit that 9-5, or stay home with the kids. So that leads me to today's question. When does your blog cross that threshold from a hobby to the business in the eyes of the IRS?
When should a blogger start considering themselves a business for tax purposes? Is there certain criteria that, once hit, a blogger must start to consider their blog a business instead of a hobby?
The blog is considered a business when there becomes a profit motive. Either way, business or hobby, the income needs to be reported. With this in mind, the hobby expenses are limited to the hobby income, meaning you can never take a hobby “loss”. A business can show a loss that may offset other income sources based on the way the business is structured.
*Please keep in mind this post is for informational purposes only and answers given are very general. Do not rely on this column for definite tax answers as many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.
So basically, when you decided you want to start making money is when it is no longer a hobby. Trust me, once you start making money you want all those extra deductions you can take anyway! I urge you to find a tax accountant who knows the basics of blogging or who is willing to sit down with you and learn. The H&R block guys, bless their heart, normally have no idea. You will need the extra help don't try to do your taxes on Turbo Tax unless you get a Profit and Loss statement from an accountant!
Starting a Blog? Start Here!
How to Start a Blog – Step by step (with pictures!) how to get set up and online!
See all my posts on How to Make Money Blogging
Thank you to Sharon over at Mom on Dealz for graciously sharing her series Ask an Accountant with The Frugal Navy Wife.
Looking to take your blogging to the next level, whatever that might for you? See what you need to know to get started blogging and make money.
Did You Know?
I am a mom to 5 kids, homeschool mom, blogger, social media junkie, Frugalista, Book Worm, and Closet Want-to-be Chef. We are a Roadschool family (homeschooling on the road while traveling fulltime).
I grew up learning ways to save from my mom and grandma. I started my own coupon journey when my first child was born in 2009 and started the blog on 2010 when baby #2 was born to share my tips with everyone who kept asking about how I was getting diapers for $1 a pack!
Click here to learn more about starting a blog.