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 home decor and do it yourself (DIY) business owners and bloggers.
You can find travel bloggers expenses here.
You can find photographers expenses here.
You can find crafters and craft bloggers here.
You can find food 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 home decor and do it yourself (DIY) business owners and bloggers take?
As a home decor and/or do it yourself-er business owner, there are going to be deductions you can take and deductions you can’t take for your business.
Decorating Your Own House
If you are decorating and organizing your own house, whether it’s to showcase for your blog or business, or just to show the process, the supplies and tools you buy for this process, are not deductible.
This is considered personal use, not business use.
You may be showcasing it in your business, but it’s being done for your home that you live in every day.
This also includes things like buying picture frames, rugs, and even furniture. It’s the personal use of your home.
Decorating Someone Else’s House
If you are organizing and/or decorating someone else’s house as part of your business, the cost of any supplies and tools that you buy would be deductible expenses.
You would also claim the income that you make from doing this for someone else and the expenses would offset it.
Make sure the items you purchase are expensed at the price you paid for them.
I’ve seen some people try to expense them at the marked up price that they charge for the client.
Do It Yourself Projects
The DIY projects are also very similar. If you are doing the project for yourself, in your home, it is not deductible.
If you are selling the project after it’s completed, the expenses to create the project are deductible.
If you are giving away the project after it’s completed, the expenses to create the project are deductible.
Deductions for Home Decor and DIY Business Owners & Bloggers
It is pretty simple, if the project that is being completed for yourself and/or your home, the costs are not deductible.
If the project is being completed for someone, whether for a profit or being given away, the costs are deductible.
Any questions? Anything confusing?