#MonetizeYrBlog 11: All About The Money

Allrighty then! Now that you’re monetizing your blog and rolling in the dough (;-)), it’s time to talk finances

Your blog is a business, and as such, you have both financial responsibilities and advantages.

MonetizeYrBlog

Let’s start with the good news.

Writing off expenses:

You can now start to write off on your taxes any expenses related to your business/blog. For example, you can claim your costs of purchasing your domain name, and your web-hosting. You can claim any expenses around hiring professionals or consultants to help you set it up: graphic designers, web designers, the lot. You can also write off your internet expenses.

In addition, anything that you purchase that you talk about on your blog you can write off. So, for me, for example, if I buy a new kitchen utensil or tool that I then use and talk about on my blog, that is an expense. I can even write off the food I purchase to create recipes (but it has to be specifically related to a blog post).

I also write off things like business card printing, and a portion of my car expenses.

You can do this, even if you are in a ‘loss’ situation, which means that your expenses exceed your blogging income. You might not be able to do this for 20 years, but the first couple? You likely won’t get any grief from Revenue Canada.

Declaring Income: 

You need to declare as income any money you make from your blog. If you make over $30K per year in income from your blog (that would be amazing, by the way!), then you need to start charging GST in addition to however much you are charging your client(s).

What about the free stuff? 

I often get swag or things for free as a blogger. Should I be declaring these things as income? I asked a financial advisor, Colin Ritchie, and here’s what he said:

If you are a blogger and get swag in lieu or as part of payment for services rendered, that would be taxable income (although how it would be traced is another question).  On the other hand, as I see it, bloggers who are given ‘stuff’  for promotional purposes are like those happy people nibbling on free samples at Costco.  You are being wooed and courted by these various businesses in the hopes that you will have warm and fuzzy feelings about them, which you will communicate in written form to your adoring public.  You are getting a gift, pure in simple, and shouldn’t have to pay tax on it, even though the giver will be able to write it off as a promotional expense.

How to manage it all: 

You need, at the very least, a spreadsheet for tracking income and expenses. You may want to take it a step further and get fancy with a program: I recommend FreshBooks, which is a really great, online accounting program. It even has apps for iPhone and Android, and does neat tricks for you, like taking a photo of your expense receipt and then inputting that data into the program.

Keep your receipts for 7 years after you file taxes just in case you get audited. When I get a receipt (for example, I have coffee with a prospective client–that’s an allowable expense), I write on it who the meeting was with. Then I track it on my spreadsheet, which is broken down into categories and months (so, for example, a coffee meeting with Bob on Oct 1 would go into the column for October under “Meals”).

Keep your income sorted in a similar way. Have rows for guest posts, sponsored posts, advertising, etc. So, for example, this month, I made $100 from a sponsored post on my blog, $65 for a guest post I put up on my blog, I sold 3 books, and got $10 in affiliate kick backs. I would have a line item for each of those, and they would all go into column for September.

Read this great blog post from The Food Bloggers of Canada. Also–I added some new pins to my “Monetize Your Blog” Pinboard this week, including a downloadable spreadsheet to track your blogging income and expenses.

Next week will be our last! 

 
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Rebecca Coleman

Social Media Marketing Strategist, Blogger, Author, Teacher, Trainer. Passionate foodie, mom to Michael, fueled by Americanos. I love my bike. Soon-to-be cookbook author. Localvore with a wanderlust.

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