Ask an Accountant: Blogging as a Business or Hobby

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Thanks to Mom on Dealz for sharing her series, Ask an Accountant!  Sharon is married to an experienced accountant.  Although tax season is over, tax questions arise year round.

Question:

When should a blogger start considering themselves a business for tax purposes? Is there certain criteria that, once hit, a blogger must start to consider their blog a business instead of a hobby?

Answer:

The blog is considered a business when there becomes a profit motive. Either way, business or hobby, the income needs to be reported. With this in mind, the hobby expenses are limited to the hobby income, meaning you can never take a hobby “loss”. A business can show a loss that may offset other income sources based on the way the business is structured.

*Please keep in mind this post is for informational purposes only and answers given are very general. Do not rely on this column for definite tax answers as many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

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