Tax Advice for Bloggers
…or: “All My Free Stuff Isn’t Actually Free”
Whether you’re blogging full time, or it’s just one part of your artistic empire, you should find this information helpful for tax season and beyond!
One of the best things about being a blogger is the fun “gifts” they often receive at blogging events or from retailers looking for marketing exposure. The problematic thing about these great gifts is: they are not actually gifts…or free. All the goodies you get are seen as compensation in the eyes of the IRS and should be reported as taxable income. Technically, you’re supposed to be claiming the value of everything you receive from retailers or at blogging events, especially if you’re taking deductions for attending them. It would be nice to assume that you’re getting all these gifts because you’re such a cool and talented blogger, but since they are not given “solely out of affection, respect or similar impulses”, it is best to report them.
Trade shows and conferences are great places for bloggers to receive and show off their exciting new gear. Similar to the gift bags, they aren’t really free clothes and appliances, as the company or event that’s handing you this sweet stuff most likely wants something from you. The reason they’re “giving” you something is so you will hashtag it, Facebook it, Pin it, and of course, talk about it on your blog. Payment in money, products, or services can all be considered income, and this includes whatever you generate from affiliate income.
You are responsible for reporting your income even if you don’t receive a 1099-Misc form! Anyone who receives more than $600 as an independent contractor should receive a W-9 form initially and get a 1099-Misc in the mail or electronically at the end of each year to report your total income received. You may even get one from one of those expensive “free” gifts you blogged about.
If this isn’t bumming you out enough, remember: free trips aren’t really free either! If any company, brand rep or the like is flying you around, it isn’t because they like you, it’s because they want something in return (but they might like you, too). The cost of the plane ticket, hotel, car service, and ANYTHING of that nature that should be reported as taxable income, regardless of whether you actually get any money.
A few other examples of things that would be considered taxable income are: ad spot sales, sponsored posts, and paid reviews. There are plenty of things that bloggers will get that the IRS sees as taxable income, even if you don’t actually make any money. It doesn’t matter if you get to keep an item forever or just play with it for a bit- the value of the product is considered compensation and the IRS is expecting you to report it. No matter how much you don’t want to report all of your new things, keep in mind, that you also won’t be able to take the charitable deduction if you decide to donate them.
As a blogger, and a human being in general, the best tip overall is to keep records of everything. Be organized! Try to keep all of your receipts and detailed notes of business related transactions. We have attached a blog income tracker below which should help with this process! It’s always better to be prepared in case an audit comes your way (feel free to check out our other article “What to Avoid When Filing Your Tax Return” which includes auditing red flags the IRS looks for). Typically, you won’t receive a 1099 for all of these fabulous things, and you also probably don’t want to report them all. That being said, you can choose to proceed forward however you feel is best; there are no guarantees. We’re just here to tell you the expectations of the IRS.
By working with Paragon Accountants you can rest easy knowing that we work with stylists, artists, and designers who all have a place in the blogging world and are well versed in the financial side of the industry. We are happy to answer any questions you may have so we can keep you happily (and successfully) blogging.
If you have any questions whatsoever, please contact us today. We’d love to hear from you!