As a blogger, you’re probably a creative person with a knack for pretty images and beautiful writing and are an expert in your niche – whether that be DIY, travel, food, etc. What you may not be an expert in is accounting (aka the language of business) which at some point or another WILL come into play as your blog grows.
Let me guess…you started a blog as a little side gig or hobby to occupy your spare time alongside your full time job that you only sorta, maybe or maybe not, enjoyed. After a bit of time you suddenly discovered your “little blog” can actually make some pretty decent cash! Excited and overjoyed at how your blog’s potential could change your work life, you put everything you had into it and started treating it like a business.
With your new boss-girl vibe and business-savvy mentality, you started chipping away at your make my blog a thing to-do list. But soon it hits you…”crap what the heck do I do about taxes and bookkeeping and paying people and what about receipts and OMG am I going to jail??”.
Sound like you?
Well you’re in luck because due to the nature of my own small business, The Fit Peach, accounting for bloggers has become my specialty! Yes, I’m a weird unicorn in the creative space and have a food blog as well as an CPA license – the dynamic duo!
After years in both the blogging space and accounting space, I’m spilling all the beans on how exactly “accounting for bloggers” actually works…
Bookkeeping
The backbone of a well-run business is good record keeping – otherwise known as bookkeeping! Yes, I know you probably just thought to yourself “ughh what a bore”. While it can be a mundane task, if done properly it will take you 20 minutes TOPS a month to get it all neat and tidy and leave you feeling fresh and new like you just left the salon 😉
Get a business bank account
This is very important if you want to treat your blog like a business. Not only does a separate account help keep all of your business’ ~mula~ in one place, it also makes the IRS happy (something we all strive to do).
When finding a new fancy financial home for your business, here is what you need to think about:
- What is the minimum monthly balance?
- Do they charge for international wire fees?
- Are there any perks like cash bank or rewards?
- Do they accept Zelle payments?
- Does the bank integrate with Quickbooks (more on this later)
- Can you do remote deposits?
And because I get asked on the reg where to open one up, here are my top recommendations to look:
- Bank of America – Their Business Advantage Fundamentals account is great! I also like that they have physical branch locations to go to if needed.
- Bluevine – If you love online-only banks this one is for you. They offer a hight-yield business checking account that is very enticing.
- Chase Bank – The Chase Business Complete Banking is a great account for small businesses. They also have physical locations.
Use a business card
When you open up a business bank account, you will also get a debit card linked directly to that account.
If you like to play the credit card point game, then get a card used exclusively for business purposes. When deciding on a card, consider what type of transactions you will mostly use the card for – like travel or groceries or online software, etc. Pick a card that has a program that rewards those types of purchases!
Know what qualifies as a business expense
Ah, a pretty important part of bookkeeping. A business expense is when you purchase something to use in your business in hopes of producing revenue. For most bloggers this is software, apps, plugins, camera equipment, computer equipment, and materials needed to create blog posts! If you’re a food blogger, groceries will be a business expenses. Crafting materials will be an expense for most DIY bloggers. And travel expenses (with some exceptions) would be write-offs for travel bloggers.
Keep your records updated
I highly recommend recommend Quickbooks Online as it’s very user friendly and pretty affordable. You can connect your bank and all of your transactions flow through into the software so all you have to do is categorize. Most bloggers will eventually need a software like Quickbooks.
If you’re just starting out though, you can also use a simple spreadsheet – check out our shop page for our accounting template for bloggers! If using a spreadsheet, you will want to go through your bank statement and credit card statement every month and manually log your transactions with a category – like job supplies, software, bank fees, etc.
Set a reminder for the first day of each month to do the bookkeeping for the prior month. It will only take a short amount of time each month if you stay on top of it!
Financials
If you use Quickbooks Online then you can easily pull reports to see how your business is doing. If you’re using a spreadsheet, a few charts or graphs will do the trick!
It’s a good idea to look at your profit and loss reports (revenue – expenses) every quarter or so to see how your business is performing. It’s like going to the doctor for a checkup every now and then!
Your profit and loss report can also show you what revenue streams to focus on more or less and give you a bird’s eye view of how your expenses rack up. You might be surprised at how much you really spend on some things (hello me and photography props….).
Check out this post about the different types of reports you might find helpful!
Taxes
Yes, even bloggers need to pay ole Uncle Sam. Specifically, you’ll pay these 3 taxes on your business profits:
- Federal income tax
- State income tax (if you live in a state that has one)
- Self-employment tax (or payroll tax) – this is included in your federal tax
If you make $1, $1,000, $100,000 or even it you have a net loss, you need to report your business income on your tax return.
If you’re a sole prop or LLC, your income will go on a Schedule C which is a part of your individual tax return (1040).
Partnerships will file a form 1065 and S Corps will file an 1120S – both of which will distribute a K-1 which then gets recorded on your individual tax return (1040).
This is where good bookkeeping comes into play! Whether you use TurboTax or some fancy smancy accountant for bloggers (hi, it’s me!), you will need to have your total revenue and expenses ready to provide.
And if you don’t want to get hit with penalties and interest and generally have a better grasp on your finances, you’ll make estimated tax payments throughout the year.
I highly recommend making these online – it takes 10 seconds and you’re done! Like ripping off a bandaid.
Make estimated payments here for federal income tax. Click “make payment” and then select “estimated tax” for reason for payment and apply it to your 1040ES and proper tax year. You will need to verify your identity with some personal information and then input your payment amount and you’re done!
Be sure to save confirmation of your payments so you know what you have made throughout the year.
If you live in a state that has an income tax, Google your state + estimated tax individual income tax payment online and you should be directed to a site specific to your state. You will follow a similar process to that of federal estimated tax payments. And remember, these tax payments are done at the individual level, not the business! This is important – be sure to select that your state payment is applied to your individual tax payment.
Phew!! That was a lot of information. But hopefully now you know what exactly you need to do if you’re a blogger looking to level up your business.
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