One of the most confusing parts of owning a business, is knowing how to do your business bookkeeping and taxes.
And now that you have started your blog, you want to make sure that you are doing things right.
Or maybe you've had your blog for a while now, but still aren't sure about what qualifies for tax breaks and expense deductions for your blog.
There is a shortage of accountants and CPAs in the business world who fully understand online business. I regularly get asked about accountants and tax preparers that can help with online business.
But the list that I have is very short because I have had a hard time finding accountants that I can recommend my clients and friends to since there seem to be so few who are taking the time to expand their knowledge base to include the online world.
But as a business owner, you can arm yourself with the proper knowledge before you go to an accountant and then you will be able to help yourself and your accountant when you know exactly what you are talking about.
In this guide, my aim is to make sure that bloggers know what deductions and tax breaks they can take when it comes to their business.
So let's dive in.
What is an expense?
First of all, what is an expense?
An expense for your business, whether you are a blogger or not, is something that is ordinary and necessary for the running of your business.
An ordinary expense, according to the IRS, is an expense that is common and accepted in your type of business. What is common for one business trade is not always accepted for another type of business trade.
A necessary expense, according to the IRS, is an expense that is helpful and appropriate for your business trade.
For example, as a blogger, your email service provider (Active Campaign, Convertkit, Mailchimp, Drip, etc.) is both an ordinary and necessary expense for your business. But car expenses are not ordinary and necessary expenses for a blogger.
There is a detailed list of expenses that apply to most businesses. In this post, we are going to dive into the expense deductions that are specific to food bloggers.
You can find travel bloggers expenses here.
You can find photographers expenses here.
You can find home decor/DIY sellers and bloggers here.
You can find crafters and craft bloggers here.
You can find beauty bloggers here.
You can find online coaches here.
You can find the general blogger's expenses here.
You can find the general list of expenses here.
You can find more information on the home office deduction here.
What expense deductions can food bloggers take?
The food blogging expenses are a tad bit different as compared to the other businesses.
Let’s have a look.
As a food blogger, you tend to make the food you are writing a post about. And you may even write your own recipe.
If you don’t make the food and just post roundup posts and use other people’s recipes, then you really don’t have many expenses anyway, just your normal business expenses that aren’t specific to just food bloggers.
When you create a recipe of your own, you have to figure out the right measurements and ingredients that are needed in the recipe. This also means some trial and error.
The cost of the ingredients used for creating these new recipes are deductible, even when the food is consumed by you and your family.
BUT once you have the recipe worked out, everytime you make it again, the cost of those ingredients are not deductible.
The cost of ingredients for the mess ups are deductible.
Recommendation for your Food Ingredients
Many of the food bloggers that I have personally talked to have basically two sets of supplies/ingredients in their kitchen.
They buy a set of the ingredients for their home use (not deductible) and they buy a set of ingredients for their blog use (deductible).
They should be separate receipts, it will make your bookkeeping and accounting much easier.
When you buy any ingredients that are being used for blog purposes, it is best to buy them on a separate receipt than when you buy your household groceries.
This way, you always know what is included for your business and what isn’t. Having separate receipts makes the bookkeeping easy, and even an audit easy. You don’t have to spend the time explaining which purchases were business expenses and which ones were personal expenses.
And you should also have a separate bank account for your business, so you can just pay with that account, instead of your personal account when it comes to making the purchase.
Expense Deductions for Food Bloggers
The biggest part of these deductions is to make sure that you keep your personal food ingredients and your business food ingredients separated.
Buy them on separate receipts. Use your business bank account funds to pay for the business expenses.
When you work from home, especially using your kitchen, having a separation between business and personal is very important, otherwise you don’t usually get the deductions.
Questions? Anything confusing?