If you run a profitable blog, Instagram or YouTube channel, there are certain tax deductions you can take in Hayward, CA. You should be able to write off some of your business expenses so you can enjoy more of your hard-earned money.
Not sure if your online presence qualifies you as a professional blogger or influencer? Here’s how to tell whether you qualify, and what kind of deductions you can take.
How do I know if I’m a professional influencer?
The IRS qualifies bloggers or influencers as businesses based on how much (if any) profit they’ve made over the last few years. If you want to claim deductions, your online presence must have made a profit in at least three of the last five years—otherwise, it’s seen as a hobby.
Generally, bloggers and other influencers are regarded as independent contractors. You’ll need to file a Form 1040 in order to claim deductions. You can use the 1040 to claim all standard deductions, and Form 1040 Schedule C to claim anything above the standard amount.
Deductions to consider
Wondering about some of the specific deductions you might be able to take? See which of these items might apply to you:
- Supplies or subscriptions: The money you pay for your internet (at least partially), domains, hosting, website design, paid articles and tax or business software can all be deducted from your yearly tax bill.
- Startup and operating expenses: You can write off up to $5,000 of startup and operating expenses on your taxes—anything else will be depreciated over the next 15 years. This includes expenses like renting office space, marketing, online services and equipment. Your accountant can help you understand which expenses count for these purposes and which do not.
- Educational expenses: Education is important for business owners, especially if they want to stay competitive. You can write off the costs of education, such as conferences, classes and even online educational subscriptions.
- Services for your business: If you spend money on advertising, business coaching and other services, you can write those off on your taxes as well.
- Clothing: Clothing has to be specifically for your job—just like lawyers need suits to wear to court—so if you have a particular “uniform” that you wear for your online presence, feel free to write those expenses off as well. Be prepared to prove that they’re necessary for your job.
- Travel: Any travel that you do for business-related purposes, such as traveling to conferences and other events, can be written off as well. That includes planes, trains, rental cars, taxis, rideshares and more. Talk to your accountant if you’re not sure whether your travel qualifies.
- Home office: Finally, you may be able to deduct some of your mortgage, property taxes and more under the home office deduction. However, since this tends to be an audit trigger, be sure to have your accountant verify your deductions before you file.
For help getting the maximum tax deductions in Hayward, CA, call Menjivar & Company CPAs, Inc. We’re happy to help you get the best return possible.
Categorised in: Tax Preparation