One of my social media friends, Tyropearl, who pens the Interesting Observations blog tweeted an article suggestion request to me recently. Pearl wanted to know how someone in her position as a part-time blogger should declare blog income. It seems that she pulled in just enough money in 2009 to wonder how that income should be reported.
Without having all of the facts handy related to Pearl’s request, I can answer certain tax questions based on my own experiences. As my regular readers know I’ve been doing this kind of work full-time for seven years and have relied upon Turbo Tax since the very beginning to help me work through what has proven to be an increasingly difficult federal tax return to complete.
But the question at hand isn’t about someone like me rather it is about people like Pearl who are part-time bloggers, bringing in a small amount of revenue on the side.
Let me first say this: any income you pull in through your blog whether that be Google AdSense income, banner ad revenue, sponsored posts, text links or what have you is taxable. Mostly everyone makes something off of their blogs unless they purposefully have decided not to monetize it. That money is income and it is taxable.
You’re probably familiar with 1099 forms too, right? The 1099 series is for reporting income and can cover a wide variety of income sources. For example, a 1099-INT is for interest income derived from a bank account. A 1099-DIV is for dividends and distributions. A 1099-G is for government payments. And so on.
But when it comes to blog income you should receive a 1099-MISC which is what self-employed or independent contractors get from their clients. Even though you work elsewhere primarily, to the IRS it is all the same: you made some money on the side and you need to have the correct form to prove it.
What’s more, if this income is more than $400 for the year, then the IRS requires tax filers to file Form 1040, Schedule SE and pay a self-employment tax on those earnings. Yes, you may end up owing some money on that side income so ask everyone who paid you in 2009 for the appropriate form.
But get this: they only have to give you a form if your earnings from them totaled $600 or more for the year. Still, you are required by law to declare that income even if you weren’t given the form. Somebody may report what they paid you to the IRS and if you don’t declare that information you could be audited and penalized.
I am not a tax accountant so my advice will stop right here. If you are still not certain where you stand, then getting help from a tax professional may be the best course of action for you.