Jan 16 2009
Keep Track of Earnings
As a blogger, you need to be able to report your earnings at all times. The income that you generate often isn’t taxed initially, but you have to report this income at tax time. You are responsible for reporting any financial income that you generate from your blog(s) or Internet activities.
You are always better safe than sorry when it comes to this aspect. Small amounts (less than a dollar), such as interest, don’t always have to be reported, but any time you increase the amount, you are more susceptible to being audited - and you don’t want this to happen.
The best way to monitor your earnings and where your money is going is to use an application, such as a piece of financial software. This way, you don’t have to use the “manual” method, and the taxes will be done for you more rapidly when it comes time to report them yearly.
You have to be aware that there are ways to save money with your taxes. If you purchased products, such as blog themes, advertising, etc. related to your blog, you can report them as expenses and get a bigger refund or not have to report as much income. You will generally have to pay rates similar to small businesses, unless you reach the threshold (very few do) in which you can save money by reporting income as a corporation (I believe that it is much higher than 99% of bloggers make).
