Tax Tips for Bloggers
First, keep really good records. Record every bit of income you earn from your blog. You don't need to invest in an expensive accounting program. You can create and use an Excel worksheet to record the date you earned the money, who you earned it from, and how much you earned. It's also a good idea to choose a category for the income (such as "guest posts" or "products received") so that you can sort the Excel worksheet at the end of the year to easily add up your category totals.
You also need to record every bit of expense you spend on your blog. An Excel worksheet works well for this too. You can use two worksheets, like I do, one for income and one for expenses, or you can combine them into one worksheet and use double columns like a checkbook. Again, record the date you spent money, the company name, and the amount you spent.
Expense categories are very important, because you will need to itemize your expenses on a Schedule C to best take advantage of tax deductions. Include categories like "advertising" and "office supplies" as well as specific categories like "small business web design" and "computer software." The more specific your categories are, the less likely you will raise a red flag that could trigger an IRS audit.
Make sure you save all receipts to prove what you spent. I always make a photocopy of every receipt because receipts often fade; staple the original receipt to the copy and save them all. Save your tax records for at least seven years because the IRS can ask for those records during an audit. Don't be afraid to do your own taxes! It simply requires you to read the directions on the tax forms. You can do that, right?