Ask an Accountant: Blogging as a Business or Hobby

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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5 a Day Rule ~ an Easy Way to Declutter (Guest Post)

Thanks to Moms Ideas for today’s guest post:

I have a little trick that I try to do most days. Some of my friends & family have called it a little neurotic (what did you expect? I am neurotic!), some have said it’s a great idea that they have adopted themselves. Then there are my kids who see me coming & hide their treasures!I don’t have a clever name for it, so we will call it the “5 a day rule”. It’s very easy, especially at the beginning, and I find it is an immensely helpful weapon in the war on clutter.

Every day, as I go about my daily duties, I try to find 5 things to go in my donate box, the yard sale box, or the trash. Yep, it’s that simple. It may be an outgrown piece of clothing that I find while doing laundry, one of those little toys that come with a kid’s meal at a fast food restaurant, a broken toy, a trinket that I no longer love or use or a book or magazine that I no longer want to spend valuable time to read.

I am constantly trying to reduce the clutter that tries to take over my house. This isn’t a cure all solution to that, but it is something that has become a daily habit that I have no doubt helps!

Some days this is harder than others and I don’t always reach my goal, but that’s ok. It creates a consciousness for me so I am always examining what ‘stuff’ is valuable enough to earn valuable real estate in my home, and in my life. Aside from the obvious benefit of reducing the amount of stuff I have to find a home for and clean, I think the thought process is by far the most valuable trait developed by this system. It causes me to really question what is important to me in terms of accumulation. It doesn’t just affect what I bring home from the store; it affects what I bring home period. That can mean saying no to a commitment of time or energy, saying no to a recurring financial commitment, or saying no to an emotional/mental commitment. Pretty heavy stuff, right?

If I have a day where I can’t find 5 things, I will ask my girls if they have anything they no longer want/use. I will ask my husband. If we don’t have 5 things, that is fine! Maybe that means that we have less clutter to choose from? I love this habit because it doesn’t require me to devote several hours to this task; it is just part of my daily routine. I am one of those people that is not good at making decisions and have to mull them over before I act. So trying to ‘declutter’ or organize a closet or drawer in one session is very hard. This habit allows me to make those decisions in stride.

Try it! Start with 1 or 2 items as your goal. Involve your family. Don’t put too much pressure on yourself. It will start to flow naturally. It isn’t meant to be painful, but allow your comfort level to be stretched a little! Good Luck and feel free to share your victory with me!

www.momsideas.com is a blog dedicated to sharing tips to help women live a simpler life by saving time, money, the earth & their sanity! The author is a wife, SAHM to 3 beautiful girls and living with a disability. These are just some of the roles she is trying to master. With 2 daughters thriving with Aspergers and living with a disability herself, making life simpler is not just a hobby, it is a necessity! She enjoys sharing all of those words of wisdom learned from other moms and herself, to create a life of simple and joyful living for her family.

Photo Credit: shelterpop.com

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Ask an Accountant: Early Withdrawal from a Rollover IRA

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:

I am considering taking an early withdrawal from the Rollover IRA account ($13k out). I recently had surgery and this is needed to clear bills, debt and get the budget back. I know I am looking at a 10% hit on the taxes next year for a penalty ($1,300), but what else am I looking at? How much else should I expect ?

Answer:

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Ask an Accountant: Claiming Day Care & Moving Expenses


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:

I have two questions:

1. Can I claim the after school program my son is in? He is in Kindergarten and instead of paying for an after school sitter we are paying for an after school program at the school. Is that deductible?

2. Can we claim/deduct our moving expenses?

Answer
:

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Ask an Accountant: Reporting Affiliate Income Under $600

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:
I am a blogger who works with various affiliate companies and vendors. Is it true that if one of them pays me less than $600 a year then I don’t have to claim that income?

Answer:
No, that is not true. You have to claim everything you make. However, if you earn less than $600 from a company, they do not have to send you a 1099.  Basically the company is not required to report it but you still should.

*Please keep in mind this post is for informational purposes only and answers given are very general. 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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Ask an Accountant: Paying Estimated Taxes


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:
I have an at home business that has started making me a small amount of income. Should I be paying estimated taxes on what I am making?

Answer:
You need to pay in at least 90% of your prior year tax through withholding and estimated payments by January 15th. If your income is expected to be the same as last year and more than $150k, then you need to pay in at least 100% of last year’s tax. If your income is higher than last year and greater than $150k you must pay in 110% of last year’s tax by January 15th. Now is an excellent time to discuss year end taxes with your accountant.

*Please keep in mind this post is for informational purposes only and answers given are very general. 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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Ask an Accountant: Claiming Blog Sponsorships


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:
I am a blogger and frequently attend conferences. I accept sponsorship from companies for these conferences. How would these sponsorships be taxed?

Answer:

The sponsorship would be recorded as ‘Other Income’ and the costs related to the conference would be an written off as an expense. If the amount of the sponsorship and the amount of the conference were equal, there would be no taxable profit from the transaction. If the sponsorship did not cover the total expenses of the trip, there would be a net loss on the transaction. If the sponsorship exceeded the expenses of the trip the difference would be ordinary income(profit) and included in the Net Profit of the business, thus taxed at the appropriate income tax rate

*Please keep in mind this post is for informational purposes only and answers given are very general. 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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Dating on a Dime: Anniversary on a Budget

Creating quality time in a marriage or with a significant other is imperative to the strength of a relationship.  But how to you stay on budget with everything else going on in your lives?  Living on Love and Cents & Madame Deals have put together a great article for this weeks Dating on a Dime series:

This week’s post is from Heather at Living on Love and Cents. She is talking about celebrating your anniversary on a budget.

Next week my husband and I will be celebrating our ninth wedding anniversary. This weekend we have a babysitter and will be celebrating. WOOHOO! This month was one that was tough on the budget. We didn’t have alot left for a big weekend trip out of town, So I had to get creative for our celebration. Usually we head to a small bed and breakfast somewhere.But this year we are doing something different!

This year we are having a stay-cation. We are heading to the beach, which is about an hour from our house. I will be packing a picnic basket with our favorites and a blanket. A nice relaxing evening eating and spending time on the beach sounds very romantic. Since we are close to home we can come home afterwards.

No matter where you live you can create a romantic stay-cation. There is no need to spend money on a hotel or long road trip. You can have a romantic evening and make moments to treasure without the added expenses. Cut costs on your date by staying close to home.

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Dating on a Dime: Memories

Creating quality time in a marriage or with a significant other is imperative to the strength of a relationship.  But how to you stay on budget with everything else going on in your lives?  Living on Love and Cents & Madame Deals have put together a great article for this weeks Dating on a Dime series:

This week Madame Deals is bringing us a great idea!

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Dating on a Dime: Beach Picnic Under the Stars

 

Creating quality time in a marriage or with a significant other is imperative to the strength of a relationship.  But how to you stay on budget with everything else going on in your lives?  Living on Love and Cents & Madame Deals have put together a great article for this weeks Dating on a Dime series:

 

This week Madame Deals is bringing us a great idea!


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