Classify Your Blogging Business
If you generate an income from your blog, and you file a U.S. tax return, you should take a look at the current state of your blog as well as your future goals for it to determine if you need to change the way you report that income.
First, you don't want to pay more taxes than you have to on your blogging income. Second, you want to make sure that your personal assets (such as your home, your car, etc.) are protected if someone ever sues you based on something you publish on your blog.
Tax time is the perfect time to evaluate your blogging income over the past year as well as your expected blog growth in the coming year. Once you get a clear picture of your blog as a business, take some time to review how to classify your blogging business. If necessary, consult an attorney or accountant to make sure you make the right decision for you and your business objectives.
Reminder: if you haven't filed your 2007 tax return yet, take a look at these tax deductions for bloggers then bookmark that article so you can find the list of tax deductions again when it's time to file your 2008 tax return.
I couldn’t agree more. Too often, people start a business before doing any planning for tax issues whatsoever. It’s like they’re surprised that it actually worked! Then they wonder why they owe so much tax. It’s because they planned to fail by failing to plan. It’s a great idea to have a business entity consistent with your goals at the beginning of your business.