Did you know that a blog can help you save on taxes?
Want to see how you can get the government to pay for your blog?
It’s that time of year again when everyone is collecting their income tax forms and hoping for a refund. Unfortunately, the average person isn’t aware that by having a blog you could save be saving hundreds of dollars every year.
Tax Strategy
High income earners know how to use tax minimization strategies to reduce their tax bill. This is completely different from tax evasion where you are concealing or misrepresenting your income which is illegal. But a tax minimization strategy is a key part of the wealth planning process and the average person can benefit from it too.
Most of us know that owning a business allows you to write off your expenses related to the business.
But did you know that having a blog IS OWNING A BUSINESS? When you have your own blog and treat it like a business, you can write off your expenses. That includes things such as your hosting costs, purchasing a WordPress theme, ebook & online course fees, advertising, accounting costs and so much more.
But the biggest impact of starting a blog is in the fact that you are a home based business. That means that you can save on taxes by writing off a portion of your rent/mortgage interest, home insurance, electricity, internet fees, cell phone bills, etc.
What most don’t know is that you can use these deductions against income from regular employment income. So anyone, earning an hourly wage or yearly salary from a job, can reduce the amount of tax they have to pay on that income by starting $5 a month blog.
*** Some of the links in this post are affiliate links.
Click here for the full disclosure statement ***
How does it work?
Let’s say, for example, I’m working a full time job earning $35,000/yr. Based on just this, I would have to pay $4,544 in taxes at the end of the year.
Now, if I write off just the business portion of my rent (25%) and cell bill (30%) of $4860, I now only owe $3471 in taxes which means that:
I just saved $1073 in taxes!!!
And the more you earn, the greater the savings. So if I earn $60,000, my tax bill would be $10,832. But with a blog and those same basic deductions of rent and cell, I would only owe $9,462.
Thus saving $1,370 in taxes!!!
I haven’t even included my internet costs, hosting costs, banking fees, hydro, gas bill and more which are allowable deductions for my blogging business. So, this is a very conservative estimation. That’s a pretty good way to save on taxes that would have gone to the government anyways!
Like I said earlier, these examples are only based on writing off a portion of my rent and my cell phone bill. After adding it all other additional deductions, my overall tax bill will be even less.
Get started now with Bluehost and follow my step by step guide on How to start a blog for less than $5/m
Start off right
Personally, I believe that to start a blog, the 2 things that you absolutely must pay for are hosting and a WordPress theme. That works out to about $160 for the year which is tax deductible too! So, even with my most conservative calculation,
Spend $160 to get back over $1,000 in taxes
Don’t forget
Please note that these expenses can only be claimed against income earned in the same year. You can not start a blog today to apply to your tax return for last year.
Why listen to me?
I spent 8 years working in Investment Banking, Insurance and Financial Planning. As a young female in a male dominated industry, I worked hard to earn multiple designations and give my clients the best advice possible.
I have a Financial Management Advisor designation and have completed the Financial Planning and Wealth Management courses. Everything I recommend is based on sound financial strategies backed by years of experience. I even have tips and tricks only the rich know about!
As always, please consult your accountant for specific questions relating to your personal situation. This post is written for general informational purposes only and I am not an accountant.
Related content you may also be interested in:
~ 10 Financial Benefits of Starting A Blog
~ How To Save Money On Everyday Things
~ How To Manage Money During A Financial Crisis
