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 online coaches.
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 food bloggers here.
You can find beauty bloggers 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 online coaches take?
The expenses for online coaches don’t vary too much from the general list of expenses that you can find above.
But there are a few things I want to touch on.
If you are the type of coach that regularly travels for speaking engagements and conferences and even workcations, then the expenses associated with that travel are deductible.
But they are only deductible for you. If you have family, friends or partners traveling with you, those expenses are not deductible.
On another note, if you have your assistant traveling with you or meeting you there, then their expenses are deductible. They are directly related to your business.
If you do things like site seeing or learning a new recreation skill, those costs are not deductible. They are personal expenses.
Health Insurance/Medical Costs/Daycare Expenses
The costs for medical treatments can be paid by your business and are deductible. These costs are actually quite imperative to you being healthy and being able to run your business, therefore they are considered medical costs.
You can also get an insurance plan for you and/or your family with your business footing the bill. This is a deductible expense.
Want to give yourself other medical benefits, like a health savings account? Yep, that’s deductible too.
Have young children that you need to pay someone to help you take care of so that you can get more work done in your business? Yep, daycare/childcare expenses are deductible in your business. They are a necessary expense for you to keep your business running smoothly.
Buying Office Furniture
You would be surprised how much I’ve actually been asked this question.
I’m turning my spare bedroom into an office, but I also want to get a couch and a daybed and some decorations for in there. Can I deduct those costs?
Sorry, but nope. The couch, daybed and decorations, while they make your office look nice, they aren’t a part of your business. They don’t count as business expenses.
The only office furniture that counts as deductible includes desks, desk chairs, tables that are used directly for your business, etc.
If you want to try to stretch the rules, be my guest. I won’t stop you, but when you get audited, you will be stopped. Just make the extra money in your business, pay yourself and then buy it out of your pocket.
Camera/Video Equipment/Studio Costs
Recording videos, audios and podcasts? The equipment that is needed for the recordings is deductible.
Lighting? Camera? Specific type of chair? Microphone? Yep, all deductible expenses.
The costs associated with soundproofing a room would also be deductible.
Expense Deductions for Online Coaches
For online coaches, the expenses don’t really deviate much from the general list of expense deductions.
It really doesn’t matter what type of coach you are, the expenses are similar among online business owners and coaches.
Any questions? Anything confusing?