Dos and Don’ts of Blogger Tax Deductions
Guest author: Nelia Belkova, Style Blog
Nelia Belkova is a Toronto-based fashion and lifestyle blogger who writes about the latest Canadian and International fashion news, trends, street style, celebrity fashion, and gossip on her website, Style Blog.
As a blogger who runs a blog as a business, figuring out what you can and can’t deduct from your taxes can be a stressful exercise. The industry is fairly new, and the rules can be pretty confusing for someone who is not a tax professional. Well, after chatting with the experts from H&R Block, I put together a list of expenses that you can safely deduct on your next tax return, along with a few items that you probably shouldn’t. The best way to ensure that you’re getting the most out of your tax return is to, of course, hire an expert to help with your individual needs, but in the meantime, here are some dos and don’ts of tax deductions for bloggers.
Domain name registration fees, trademarks and patents are considered eligible capital property but they depreciate yearly at a rate of 5%.
Computer software like Adobe Photoshop is considered a capital property. The depreciation rate is 100% and it is subject to the half-year rule, which means you can only claim half the cost in the year of purchase.
If you buy ads to promote your blog and spend money on SEO services, you can deduct these expenses from your taxes. Same goes for prizes that you buy to give away on the blog as part of contests and promotional giveaways.
If you use your home as your principal place of business, you can claim a portion of home expenses (insurance, property taxes, mortgage interest). The amount you can claim depends on the percentage of the total square footage of your home that you use for business. If you aren’t exclusively using the space for business, the amount you claim must also be prorated based on the amount of time you use it for business.
Blogger equipment like smartphones, laptops, and cameras are capital assets that you can claim on your taxes. However, you will have to deduct the cost of those items over a period of several years as the asset’s value depreciates.
Outfits you photographed for the blog can seem like something you may be able to write-off, but sadly that isn’t the case. Unless it’s a uniform or a costume and is only used for business purposes, clothes and accessories you buy and wear in your day-to-day life can’t be deducted as an expense.
Unless you’re a fitness blogger and can prove that your gym membership is a business expense, gym and other fitness fees aren’t tax-deductible.
You may frequently feature your adorable pet on your blog and Instagram, but sadly, any animal-related expenses like doggy daycare fees and pet insurance aren’t tax deductible.
While professional association memberships are tax-deductible, you cannot deduct club membership dues (including initiation fees) if the main purpose of the club is dining, recreation, or sporting activities.
An H&R Block Tax Expert can help you make sure you claim every deduction and benefit you’re eligible for.