Unless you're a business owner, and your blog is an extension of your business website. I think most take up blogging because we think it might be a fun hobby. After we start building up a few blogger relationships, it becomes a really fun hobby.
It's also a great outlet, where we can talk about things we love and enjoy. We can let things out and not drive our close friends and family crazy hearing about all the things we are passionate about all the time. Not only that but we learn and grow, and we in return teach others and help them learn and grow as people and bloggers.
Eventually we start seeing other bloggers getting paid to do things, or cool products or free race entry fee's. It doesn't take long before small business and start ups will start contacting us asking us if we want to try things out for reviews, or run giveaways. One day, we decide to accept one one of these offers. Which is where the topic of this post comes into play.
How do you know if your blog is a hobby or a business?
This is a subject so many bloggers actually get wrong for themselves. There are so many hobby bloggers out there, who are in fact running a small business and probably don't even know it and it could come back and bite them in the butt one day.
So if you want to know where you fall , here are 3 questions to ask yourself.
Do you ever accept product in return for a review?
Do you ever accept money in return for a review or guest post?
Do you sell a product or service on your blog?
Do you run ads on your blog?
If you answered YES to ANY of these, then your blog is a business.
If you answered NO to ALL then you are still a hobby blogger.
I know what some of you are thinking, how can receiving a product or a free race entry mean my blog is a business, not just a hobby? I'm going to give you a little insight into this.
So many think that blogging is just a hobby and trying things out, trying different products are an extension of that hobby. They don't realize if you accept ANY product ANY free thing to write a post on, you are accepting that as payment for that service.
Yes, product and free things given to you in return for your review are in fact payment! If you are making a profit, even by product only. Additionally, you can sure as bet the IRS considers this a business!
Those business who send you those things, write those things off on their taxes and note that they sent them to you.
Do you need to set it up as a business and obtain a Tax ID # and all that jazz?
Maybe, maybe not. That is only a decision you can make after speaking to an accountant regarding your own specific situation.
If you are doing this a couple of times a year, you may be fine to declare it on your own personal taxes. If you are receiving free product, you will list and declare the product value.
However, if you are thinking of making it a steady thing. If you are working with ad agencies and companies whether you are receiving payment, or receiving product frequently, you should consider speaking to an accountant, mostly for your own protection.
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Is my Blog a Hobby or a Business? http://goo.gl/DSM774 @runwybridlplanr #workfromhome #blogging #business #hobby
Is my Blog a Hobby or a Business? http://goo.gl/DSM774 @runwybridlplanr #workfromhome #blogging #business #hobby
The great news for business bloggers!
You also get to declare some things on your taxes as well. Some examples:
* Monthly Hosting Fee's & domain name fees.
* Any purchases you made for your blog.
* Paid blog conferences/workshops.
* Your camera, your computer.
* Software, purchased images.
* Paypal fees.
* Postage fee's (for sending out giveaway prizes.)
* Supplies you used to help create the posts and tutorials for your blog: Ex. ingredients for recipe's, DIY projects...
There are more things, you'd just have to look at your own situation and make that determination.
Yes, I did ask my own accountant if I could count race entry fee's:)
While you can, you have to be very careful, are you making enough revenue off your blog and your race recaps and paid race promotions that the IRS would consider your running these races as part of your business. If the money you are making, out does the cost for the races and you have formulated it into your blog's business plan, then you might be able to.
But if you start doing it, and it's not legit, be prepared to possibly be audited! Before doing this, I highly recommend you seek advice from a professional accountant!
Should you be filing taxes on your blog this year?
Well that is a question you should ask your accountant, I am not a professional to give you any sort of advice on what you should or shouldn't be doing.
Let them guide you and help you determine what is required by you!
My hope is you will now have a better understanding of the difference between a business blogger and a hobby blogger.
Can you go back and forth between the two? Of course! Each year is a different year so if this year you turned into a business by accident, then next year you will know what you need to do, to stay a hobby blogger.
I hope this was helpful for some of you who come across this post!
great information! I wondered about this last year, but I am definitely in the hole :) I think I read that the IRS gives you 3 years to figure it out but you are right, ask an accountant!
ReplyDeleteI'm definitely a hobby blogger. I'm very wary of reviewing products because if I don't like it, I'm not going to write a favorable review. I haven't been asked, which is a good thing. I do talk about books at times, but I paid for those books and recommend them only if I enjoyed them.
ReplyDeleteGreat information. I'm still a hobby blogger but will keep all of this in mind as new opportunities seem to be presenting themselves more often.
ReplyDeleteGreat advice, it's so important to talk to an accountant you trust!
ReplyDeleteAnd yet again you give me GREAT knowledge!!! I had no idea that doing reviews would classify me as a business. Something to really think about and consider. I do enjoy reviewing products because i selfishly want to try them out myself. Hmmmm-I will need to really think about this. Thanks for the info!
ReplyDeleteThis is me right now.....'It's a great outlet, where we can talk about things we love and enjoy. We can let things out and not drive our close friends and family crazy hearing about all the things we are passionate about all the time.'
You're actually 100% right on that, as long as it's not over a certain amount:) there is that 3 year rule. I just didn't mention it above because I was trying not to give advice, LOL I wouldn't want anyone to say, well Kristy said and it was wrong.. LOL
ReplyDeleteThat is awesome! I am a very small business blogger, but this year I have been far more picky and quit doing any reviews on anything that I don't actually use or plan to use in the future, I just wanted to go back to a more personal blog, however I do use my social media channels for other kinds of promotions frequently.
ReplyDeleteThanks HoHo, glad you found it informative!
ReplyDeleteOh, I hear you on that! A great accountant can be a world of difference. In fact mine once said, most accountants will tell you to write off all your races and go by a fine line of what is okay or not, but she wouldn't do it because she is honest and has ethics/integrity. I knew she was the best I could have found from that moment on:)
ReplyDeleteThanks, I am glad you found it useful! Ya, a lot of bloggers I have talked to in the past take on tons of products for review and each time I tell them it's a business and stuff, they roll their eyes then look into it and find out I was right, LOL I actually wrote this post a long time ago when I was talking to a couple friends on the subject and realized its a bout time I run it, LOL
ReplyDeleteBut you are so right, blogging is such a great outlet to get things we are passionate about out to others who like the same things, and not have to push it onto our family and friends, and in return keep those family and friends wanting to talk to us, LOL LOL
You know really a lot .
ReplyDeleteBut here it is a bit different .
When i take money for review its a small business ,when i take product its nothing :)
And dont forget an imprint on the blog ;)
Thanks, I worked in online advertising and marketing for many years so it's nice to share the info I have learned.
ReplyDeleteBut ya, this is definitely info for the U.S., not the rest of the world as I would have no idea what the rules are in other countries.
But im happy with all the great things i learn here.
ReplyDeleteAfter the bloghop i will send you an email with some questions.
Wow, really useful information. I never thought about blogs like a business before, but it make sense once you break it down like you did in this post.
ReplyDeleteAll useful information, Kristy. I think most bloggers start off blogging with no idea of where their blog can take them. When I started blogging in 2013 I had absolutely no idea that my blog would develop into what it has today. And I'm sure that in the coming years it'll continue to develop in ways that I never imagined possible.
ReplyDeleteI only answered yes to one of those questions, but I still consider myself a hobbist when it comes to blogging.
ReplyDeleteI guess my blog's a business! I still have a hard time thinking of it as a business sometimes, since it still very much feels like a hobby to me, but I do treat it like my second job, so go figure! :P Thanks for all the useful information! <3
ReplyDeletethis was really informative! I've been keeping track of my income and free products but did not take into account all of my expenses too! Thanks
ReplyDeleteThis is great information!! My blog is 100% a business and I think this is one of those posts that will help so many beginners! :)
ReplyDeleteGreat post. I really think when you start you have no idea where this road takes you. Sadly I've seen so many people fall into the comparison trap and start to replicate another bloggers path. Blogging as a profitable business is really a hard nut to crack unless you have the right ingredients (good writing, expertise, something useful to give back)
ReplyDeleteGreat advice Kristy, the key I think would be as with any other business, you need to be organized. You need to know what you did on what, where this came from and that came from. I could so take my own advice on this! If you start out being organized, when you get to be a big time blogger, the foundation work will already be there! Thanks for this!
ReplyDeleteKristy, this was so helpful. I really didn't realize all the things I could declare on my taxes as business expenses. Just today I spent $30 on a mail give-away. Good to know!
ReplyDeleteI love that your blogging topic posts are so informative but not over complicated! I don't think there's anything wrong with building ones blog into a business, as long as it's never the number one reason! I've enjoyed blogging for the short time I have, and the blog hop has only furthered that growth and joy. I hope to build my blog and monetize it once I find my rhythm to help grow it more in reaching and helping more people. Whether that means providing them some insight into a product, experience, or solution! Thanks for the information! And thanks for all the support throughout the blog hop. It's much appreciated and I will be looking forward to all your crazy adventure posts and all the knowledge you continue to share!
ReplyDeletehttps://curlycaroline.wordpress.com/
Glad you found it useful:)
ReplyDeleteI think you are right about that! Blog evolve and change so much, which is actually a good thing, I think! Who know where they will take us, and that is one of the best parts I think too:)
ReplyDeleteI bet it's totally different in Australia than it is here in the U.S., but in the U.S. anything that brings a profit is essentially a business:)
ReplyDeleteLOL, I am kinda the same way. It's a business that is combines with a hobby I love and it's a lot of fun!
ReplyDeleteOh, you probably have a ton you can keep track of for deductions, especially since you do all the recipe's that alone can probably help in your return!
ReplyDeleteThanks! Ya, I think a lot don't realize what they are doing when they start out, and I hoped a few would find this helpful as they are discovering their way into the blogging world!
ReplyDeleteI would agree with you totally on that, so many do fall into the copying others and they completely lose their individuality.
ReplyDeleteI've seen many bloggers through the years who were so into it and when they started doing everything like a few others, eventually they just drop out and my guess was once you start replicating others you lose your individuality and the thing that made it fun and interesting.
But you are so right, turning it into a profitable business is hard, and you have to have all those things you mentioned and a little luck on your side definitely doesn't hurt, that and a lot of money to throw into it, to get it kicked off into that I think helps too!
Exactly, I think organization is a huge key with anything, especially blogging!!!
ReplyDeleteOh definitely, things like that are great deductions. Glad you found this helpful!
ReplyDeleteI agree with you, except for when it's a business that needs a blog for their business then it makes sense to create one for that reason.
ReplyDeleteBut I think it's okay to want to take your hobby and turn it into a way to grow and make money off of. I enjoy the small income mine provides me with, and I do look forward to it growing, it would be nice to turn it into something even more profitable, but I just don't have the time or money to put into it right now to do it. So for now, it stays a hobby with a little part time job income:)
I think you have a great voice in the few weeks I have been reading your blog, once you find as you put it your rhythm, I think you will find you might enjoy monetizing it and turning it into a little more. Or not, and there is great things in both!
Ah yes, this is a topic of discussion in my house right now. My dad is a tax accountant and we have discussed this a lot. It's time to start claiming things, but it's not enough that we can't do it on our personal taxes. But it's funny because I still consider myself a hobby blogger, lol.
ReplyDeleteMy hubby is a CPA so I'm all too familiar with this :-) His opinion is we treat my blog like a small business! Great post!
ReplyDeleteThis is all great to know! I never really considered my blog a business but I guess it is! I still think of it as a hobby and something fun to do!
ReplyDeleteNot sure how I missed this post last week - very interesting information! I've always considered my blog purely a hobby - it's weird to think in the eyes of others it could be considered a business. I'll definitely have to re-visit this post when tax season rolls around!
ReplyDeleteI know I am the same way, I know it's a business in one sense, but if it wasn't still part hobby I think I would get sick of blogging or at least bored:)
ReplyDeleteThat's awesome, having a husband as a CPA you probably got started right from the start in the right way.
ReplyDeleteI think a lot of us have a business blog, but it's still a hobby. I personally feel if it wasn't a fun hobby then I probably wouldn't keep it up, but with that said I don't mind making a little money off it too:)
ReplyDeleteThanks Sun! I know I think a lot of people blog as a hobby even though it's a small business. This was a big topic of discussion last year with my accountant and I figured as the end of the year is approaching it's something that a lot of bloggers might not be thinking about but can use the info to take advantage of come tax season, that and know they should consider what they need to claim:)
ReplyDelete