I have a new neighbor. She is one of those women who always, always looks perfect. I don’t understand how this is acheived. If I wear a white shirt to work, there is a 78% chance I am going to spill coffee on it. I always have at least one chipped nail and/or hair going in an unwanted direction. I forget to reapply my lipstick after lunch. My students have not noticed or indicated that they care, so it’s all good.
Anyway, my neighbor sells Mary Kay cosmetics. She gave me a makeover while our kids played Let’s Pretend to Kill Each Other in the bedroom. I ended up looking a bit like Johnny Depp in Edward Scissorhands, only not as cute as Johnny Depp. Whatever.
Anyone who has ever encountered a Mary Kay person knows that you get “the opportunity to make loads of cash” while having the time of your life giving facials (guys, quit reading that crap and you won’t think that way) and parties. My new buddy also told me how she writes off everything as a business expense. For example, if she travels 3 hours to visit her aunt, and her aunt buys a lipstick, our gal gets to write off the entire trip as a business expense. Just as I was about to plunk down $100 bucks for a starter kit containing seven shades of foundation, I thought…”How would this apply to blogging?”
I’m no expert, but I do know that the IRS lets people lose money for three years before really taking a close look at all of those lunches. At least that’s what I’ve heard. Do you know how many times I’ve been eating a sandwich or some Pocky and thought about blogging? Talked about blogging? It’s time to write those babies off! Here are some other areas where you can write off your blogging expenses!
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1. Your mileage. Have you ever driven to a friend’s house and then mentioned your blog? Bingo! 44.5 cents per mile.
2. Tech gadgets. What about that sweet laptop you’ve had your eye on? Need a new digital camera? Scanner? Video camera?
3. Your house. Personally, I carry my laptop all over my house while blogging. I blog from the kitchen table, the couch, and my bed. I often use air-conditioning while I am blogging. The portion of your home that you use for your business can be deducted as a business expense–just figure the percentage of the house that you use for your office, and deduct that portion of your rent/mortgage. And utilities. (I do think that it is supposed to be a part of your house dedicated solely to business. I’d better not write off my bed just yet, as the other business option for that location is currently illegal.)
4. Restaurant meals. These add up! How about brainstorming writing ideas next time you go out to eat? Save those receipts. You get to write off 50%. This also applies to entertainment expenses. Does anyone blog about pricey concerts, rugby or strippers?
5. Your cell phone and accompanying bill. I use mine to talk to other bloggers, as I do not have Skype. Some people use theirs to take pictures and send them to their blogs.
6. Etc. Software, outsourcing, gifts (think contests) up to $25, office supplies, Internet service and a whole lot of other stuff.
Here is an excellent article for those of you who are thinking along these lines. As always, take what I say with a grain of salt and check it out with someone who actually knows what they are talking about.
Tax professionals, and anyone else who knows more than me about this subject, feel free to let me have it in the comment section.
On another note, check out Doug from Easy Tech Talk swilling the sake! It’s looking like he’s going to have a great time with his new shot glass chess set (or the $25 cash) because so far, only four of you have entered my September Shot Contest. Doug’s in the lead with 10 points. Go Doug!
How many contests give YOU publicity and a link? Hmm?
look at that handsome devil! that was really good sake by the way
MmmmMMmm… Gotta love the Sake. Till mornin anyways.
If you indeed have a business license for your at home business of ‘blogging for money’ then whatever falls in the ‘business’ category for the IRS should be legal. (but save those receipts and document, document, document) That’s what I am thinking…and I did have two legitimate businesses…around here the fee for a business license is $35. Sounds like a good investment to me.
I blog about rugby. Not sure how I could write it off as a business expense though, suppose if I blog about it, as you suggest.
I went to watch Japan vs. Samoa in the world cup a few years ago, reckon it’s still valid to write off?
Wow, I think I might finally be able to afford that fashionable coke habit if I can write it off!
Stay away from the Mary Kay cult!! It’s a pyramid scheme that’ll have you chasing an unattainable profit.
Brilliant! I bet I could make a killing being a mom too! Expense trips to soccer and ballet practice…food…milk…hmmm.
I would be careful following the advice you just gave. I know you mostly write with tongue firmly planted in cheek but the rules for what you can and cannot deduct are a little more complicated than you presented. Home office is a lot tougher to get as well. If you or any of your readers need help with their taxes (which I would suggest that anyone with a home business get professional help.. tax help that is
please send me an email.
Small business deductions are a great part of having a side business but knowing the rules can make the difference in getting a nice refund and keeping it or paying some hefty penalties and the refund back later. BTW I am also working on a financial blog but it is still in rough form. http://www.thewealthsquad.com
Hope you are doing well and truly enjoy your writing.
Scott
Well, let’s see.
1. Your mileage. Have you ever driven to a friend’s house and then mentioned your blog? Bingo! 44.5 cents per mile.
– No. You need to document it in a mileage log and state a legitimate business reason why you are using your vehicle. A casual mention is not a business reason. Visiting a prospect would be; going to the bank; etc.
2. Tech gadgets. What about that sweet laptop you’ve had your eye on? Need a new digital camera? Scanner? Video camera?
– All of the above are only deductable to the extent that you use them for business. If you use them 20% of the time, then only 20% can be deducted, and be prepared to defend them as business tools. Also, whatever you deduct is amortized (spread out) over a number of years (as much as 7 in some cases, I forget the rules.)
3. Your house. Personally, I carry my laptop all over my house while blogging. I blog from the kitchen table, the couch, and my bed. I often use air-conditioning while I am blogging. The portion of your home that you use for your business can be deducted as a business expense–just figure the percentage of the house that you use for your office, and deduct that portion of your rent/mortgage. And utilities. (I do think that it is supposed to be a part of your house dedicated solely to business. I’d better not write off my bed just yet, as the other business option for that location is currently illegal.)
– Yup, only the part of your home used *solely* for business. If it’s a corner of a desk, it’s a corner of a desk as a percentage of your entire home. If you use 1% for business and your bills come to $2000 you can deduct $20. And you will need to show all bills.
4. Restaurant meals. These add up! How about brainstorming writing ideas next time you go out to eat? Save those receipts. You get to write off 50%. This also applies to entertainment expenses. Does anyone blog about pricey concerts, rugby or strippers?
– Again, no. The IRS is really picky about this one. You can wine and dine a client. Brainstorming ideas is not IRS-proof.
5. Your cell phone and accompanying bill. I use mine to talk to other bloggers, as I do not have Skype. Some people use theirs to take pictures and send them to their blogs.
– Only the calls directly related to business, and see above for amortization. Also, not having a separate phone for business could raise a few eyebrows.
6. Etc. Software, outsourcing, gifts (think contests) up to $25, office supplies, Internet service and a whole lot of other stuff.
– Gifts, yes. Software: depends, and it gets amortized. Internet services, yes, that portion that is business only.
Good books to read: “Tax Savvy for Small Businesses ” (Nolo Press); Small Time Operator (I forget the author’s name, but it’s a standard book that gets updated often.
Oh, and as this is my first time commenting: (1) I’m not a tax pro, I’m just a 10-year veteran of IRS/business; (2) Hello. Your blog is very good and I subscribed already.
I have been thinking about starting as a Mary Kay Consultant. How much do you think I would make in the first year if I was doing this part time on top of another job?
Nice meeting you over blogging. I just saw your site on the top female blogger list on Preblogging. I look forward to reading more on your blog!
Definitely, a good idea to write off as much expenses as possible. Like Linda, I also use Tax Savvy for Small Business. Incorporation and getting EIN number is definitely very easy, and for some States, it is cheap.
I am hoping you were kidding about considering joining Mary Kay. If you weren’t I have a few words for you - don’t do it! You’re welcome to email me for details if ya like.
Great tips. I only recently started collecting my receipts for business meals and I must have wasted a fortune in taxes in the past. Probably best to put them down as business, rather than brainstorming though!
Your taxes are probably different over there to the UK though. I think I would struggle to get away with number 1!
Scott would know more about this than me, but be careful what you claim and deduct everybody. If you call your blog a “business” — like we all do just cause we lay in some ads — let’s assume you’re not making much money. Deduct too much and you’re claiming a loss as a sole propietor. If you do that too many times within a period of years (like 3 times within 5 years), your business may get flagged as a “hobby”.
I’ve claimed writing pay for years, and some of those years I didn’t deduct as much as I could have — just so I could show a profit.
Good one Michelle. See you again.
Norm S.
http://www.meetinthelobby.com
You might be able to get away with this, but just be prepared for the IRS to dig deep into your pockets and ask for the reciepts and justification every time you send in your taxes. Hehe, good luck.
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