Tax time is here and it can get pretty crazy knowing exactly what to do as a self-employed entrepreneur and what deductions you can get back - to either lower how much taxes you owe, or heighten the amount you'll receive. At best, it is always great to seek further advice from an accountant that you can trust, but listed below are a few suggestions as to what you can deduct when you file this year's tax return.

**This post may contain affiliate links and I may receive a small commission at no extra costs to you.**




So What Is A Deduction?
A tax deduction is any related business expense that is deemed 'ordinary and necessary' from the IRS for conducting that business and can be subtracted from your gross income. Once subtracted, you can find out the amount that can be taxed. Again, always double-check IRS regulations and consult with your accountant.

The more deductions, the lower your taxable income, so it's very important to keep track of your expenses from the very beginning! Keeping track of your income can be as simple as using a spreadsheet on your devices, or keeping pictures of your receipts. Anything that tracks the time and reason for the expense will do just in case of an audit.

As a blogger, here are a few business deductions you can claim:


  1. Business start-up costs: let's think in terms of name and domain registration, website hosting, and licensing fees.
  2. Advertising and marketing costs: social media ads, etc.
  3. Educational expenses: courses, or any professional classes you may have taken that relate to your business.
  4. Health insurance.
  5. Business insurance. 
  6. Office supplies.
  7. Travel: business travel, lodging, and transportation. 
  8. Rental fees: vehicles, machines, and/or equipment. 
  9. Transaction fees: Paypal, credit card, or banking fees. Who knew those few dollars they take out per transaction could be deducted? Feels good, knowing you can get those back.
  10. Home office: this is if you have a separate space in your home used exclusively for business.
  11. Internet services. 
  12. Employee benefits and wages: virtual assistants, social media manager, etc.

What's The Best Way To Track These Deductions?
The best way to track these things throughout the year would be to make sure you're using a separate banking account for these purchases. This can be a separate personal, or business banking account. 

Your bank statements for self-employed expenses will only include the deductions above, making writing things off a lot easier. 

A separate business account (or personal account, your preference), can also serve as proof in case you need to turn this documentation into the IRS. 


Is This Only Related To Blogging?
These tax deductions aren't only for bloggers, but for entrepreneurs and small business owners, in general.

When starting a new business, you will find yourself investing more in your first year. Having some surety that these investments will come back is always a motive to stay in business and to keep investing. 

You can apply these self-employed tax deductions for your network marketing business, your online business, your services and more. 


It's great to know that those investments count towards deductions and I can rest assured that that money will come back to me ten-fold. It just makes investing so much easier, don't you think? Especially those crazy, big ones, right?

I'm no expert, so as I stated before, talk to your accountant and make sure it's someone you trust. If you're like me and more comfortable filing on your own, you can use H&R Block's self-employed services and file for less than $50. Or, get 30% off Liberty Tax Filing solution.

Personally, I've been using H&R Block since I was able to file my taxes when I was both employed and self-employed and they have not let me down yet. 

I even thought it was interesting to find that my own accountant (the two years I did file with an accountant) was using H&R Block to file as well

The reason why I am sticking to ONE source, is because I was a victim of Identity Theft and at the time, I was in dire need of my tax refund. So ever since then, I have been avoiding giving out my personal information, along with my kids', to anyone! So beware of this, especially as a blogger and/or entrepreneur! 

Filing your self-employed tax return is super easy with the following online tax companies. I highly recommend filing yourself in the very beginning to save yourself some money. 

Again, I am no expert at this, but I wanted to make you aware of the possible deductions you can write off and how you can save yourself as much money as possible.

xo,
Torche'



Share To:

Being Ecomomical

Post A Comment:

4 comments so far,Add yours

  1. What about the items for the purpose of your blog. If you're a home decor blog and purchase items to inspire others to decorate. Or a DIY projects and the materials used to DIY a project and create content for your audience? I have always wondered about the tax side of blogging and honestly it is the scariest part for me, I am the type of person who likes to do things by the book and the right way...and there is not much information provided about taxes and blogging so thank you!!

    ReplyDelete
    Replies
    1. Haylie,

      Although I’m
      no expert, I’m so glad I could be of help! If you can help it, keep those investments in one account, preferably a business account, so when you write those things off, you can submit them with your return.

      Delete
  2. Do you have to be registered as an LLC to be able to deduct? Thanks!

    ReplyDelete
    Replies
    1. You don’t. The IRS will tax you as an individual in this case! I hope this helps!

      Delete