A huge part of putting an organized medium or small business bookkeeping system into practice is tracking expenses for your blog business. Many small business owners don’t keep close track of their expenses and then panic when tax season arrives and they can’t provide proof of all their deductions. Here’s a quick overview of how to track business expenses and the types of expenses you should be tracking.
Track Mileage/Vehicle Expenses for your Blog Business
If you use your car for your blog business, you can deduct some of those expenses; as long as you track the business expenses. You might use your car to shop for supplies, travel to conferences, and the like. Here’s the key with deducting vehicle expenses on your taxes: you have to keep track of miles driven for business. You can use the Standard Mileage Deduction, which offers a certain dollar amount per mile driven for business. For 2017, you can deduct 53.5 cents for every mile driven. That way, you don’t have to keep track of receipts for gas, oil changes, car washes, etc. You just track your miles driven for business use and use the Standard Mileage Deduction come tax time. Visit this post for tips on tracking mileage.
Track Travel Expenses, Conference Fees, Meals, and Hotel Stays for your Blog Business
One of the great perks of having a blog business is travel. Whether you’re taking an exotic vacation in order to offer recommendations and reviews on your blog, or traveling to a conference or training, money that comes out of your pocket is deductible. You can deduct the entire expense of conference fees, since they are to better yourself and your business. Travel to and from conferences is also 100% deductible, along with hotel stays. Meals while on a business trip can be deducted at 50%. The key with deducting travel expenses for your blog business is to make sure your travel is truly work-related and not just a family vacation turned business trip. Make sure you keep any paperwork on your trip so that you can track your business expenses come tax time.
Track the Expenses of Products used in Blog Posts
Bloggers often have to purchase numerous products to use in their posts, and deducting these items can be tricky. If you’re making a craft, recipe, or home decor piece for your blog, you can deduct the items you purchased specifically for that post. However, if you’re going to eat the dinner or use the piece to decorate your personal space, or give the craft as a gift to a family member, things get tricky. Technically, deductions are only legitimate when they’re for your business. As you can see, the lines get a little blurry when that business is a blog. This is a gray area that the IRS has not addressed directly. A safe way to claim these deductions is to use the 50% rule. If you are using the items purchased for your blog AND for your personal use, deduct the expense at 50%. If you’re using it only for your blog, deduct it at 100%.
Track Personal Expenses for your Blog Business
There is often some overlap in personal expenses and business expenses. (See category above.) If you’re using your home for your blog business, then you can deduct some of your personal home expenses on your taxes. If you’re claiming a “home office” on your taxes, you can deduct things like a portion of your mortgage, utilities, electric bill, and so forth. In this case, you would simply use the size of your home office in relation to the size of your entire home and deduct accordingly. For example, if your home is 2,000 sq. ft. and your home office is 200 sq. ft., you would deduct 10% of those bills. Other personal expenses that may be deducted for a blog business are your internet bill and phone bill. These are also deducted at the percentage they are used for your business. If you use your phone 50% of the time for business, you can deduct 50% of your phone bill. It is up to you to determine how much these items are used for business vs. personal use.
It’s important when you run a blog to track business expenses, so that you can determine if your blog was profitable. If you have any other questions about what business expenses you should track please ask us and we’re happy to help you out!
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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.