I’m a Blogger. Does the IRS Consider my Blog a Business or a Hobby?

We get a lot of different questions regarding tax code, but one of the most frequently asked from bloggers and creatives is if the IRS considers their blog a business or a hobby. If you have a blog and it’s providing you with even a small income, read on.

According to the Internal Revenue Code, all income is taxable unless it is specifically exempted. Translation – even if you’re not breaking even, any money you receive from your blog is definitely includible when it comes tax time.

That said, one of the main concerns, for established and novice bloggers alike, is how their blog is viewed by the IRS. It may not seem like a big deal now, but it might end up being one when you get ready to file.

There are two ways to classify blogging income – earnings are either reported as coming from a hobby or a business. So, when it comes to taxes, where does your blog fall? Answer the following questions to find out:

Does the time and effort you put into your blog indicate an intent to make a profit?
If there are losses, are they due to circumstances beyond your control or did they occurring the “start up phase”?
Do you depend on income from the activity?
Have you changed methods of operation to improve your profits?
Do you or people advising you, have the knowledge needed to carry on the activity as a successful business?
Have you made a profit in similar activities in the past?
Does the activity make a profit in some years?
Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
If you’ve made a profit during at least 3 of the last 5 years, including the current year, the IRS assumes your blog is a business.

If you’re answering yes to most of these questions, your blog is a business. So what to do if you’ve got a mixed bag of answers – error on the safe side and consider your blog a business or consult with a tax expert or accountant.

To learn more about accounting for bloggers, visit these posts:

Accounting 101 for Bloggers

Taxes for Bloggers

Can I Pay My Family For Their Help?

Top 20 Items Bloggers can Deduct on their Taxes

How Do I Legally Operate a Contest or Giveaway on My Blog?

3 Tips to Increase Blog Profits

How Do I Pay My Blog Employees?

Can I Deduct Conference Registration Fees, Travel, and Meals?

Can I Deduct Hosting, Web, and Design Fees?

Ben Sutton

Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses. Since founding Mazuma, Ben has established himself as an expert in the small business world. He’s still driven by that same desire to provide accounting help to all small businesses – from photographers, bloggers and creatives to lawyers, doctors, and dentists, everyone needs affordable accounting help. Ben is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants. But Ben considers his greatest achievement and credential to be his happy wife and four children.

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Mazuma is a licensed accounting firm (CPA) based in Orem, Utah, and members of the AICPA. We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes.