**GIVEAWAY NOW CLOSED**
#41 Sherl B
#48 Costana H
Do you prepare your own taxes? Ever since I earned that first dollar, I’ve done my own taxes. As the years have progressed (and our taxes got a little more complicated), I’ve always relied on tax preparation software. Thank goodness for software!
Did you know that H&R Block is the most recognized tax preparer in the US? In fact, 1 out of 7 tax returns are filed with H&R Block.
H&R Block at Home Tax Preparation Software makes filing easy, and with new tax laws each year, we need all the help we can get.
My friends at H&R Block have generously offered to share a few tips for Bloggers:
Is your blog a Business or a Hobby?
- Regular and continous
- Done with the intent and possibility of turning a profit
- Based on personal experiences, rather than “how-to’s” or marketable information
- Not making a profit (or making a small profit)
What does the IRS consider Taxable Income?
- Fees – If another website pays you to include your content on their site or you sell a post to another website or publication, that income is taxable
- Advertising Income – Other websites may pay you to include a partner link on your blog page – that’s taxable
- Product Trials/Endorsements – Manufacturers and service providers may ask you to try their product or service. Even though they may give you the product or service for free,
the value of what you receive is taxable. This is because the company expects something in return (the endorsement)
So what if you chuck the product in the trash instead of using it or kindly decline the offer? No worries: it’s not taxable
What if you use the product or take advantage of the service and hate it? This time, it’s taxable. You benefited from what was offered, as lame as it may have been
Paying Taxes is No Fun – But Deductions Are!
- Blog hosting fee, advertising, etc
So How Do You File Your Taxes?
If your blog is a hobby:
- Report any income you receive on Form 1040, as other income
- Report expenses as itemized deductions on Schedule A of Form 1040 as miscellaneous deductions
- Expenses you get to report are limited to the amount of income you have and are subject to a limitation of 2% of adjusted gross income
- Special rules also apply to depreciation and a home office deduction
If your blog is a business:
Assuming it’s a one person venture and you didn’t incorporate or form an S Corporation:
- Report your income and expenses on Schedule C
- Good news: your expenses directly offset your income (and you can show a loss)
- Bad news: if you make more than $400 net profit, you must pay self-employment tax
- Generally, equals 15.3% of net earnings, but for 2011 it is 13.3% of net earnings
- Is credited to your Social Security account and can help you get more money from Social
- Security when you retire
- Is deductible – you can deduct half of your self-employment tax from your taxable income even if you don’t itemize
While this is not exhaustive (nor does it cover every scenario), a big thanks to H&R Block for providing this information!
FIVE (5) lucky winners will receive a Promo Code for H&R Block at Home Tax Preparation Software – online Premium version! ($55 Value)
***Includes Federal E-file, but not State (you can add State to it at your expense, it’s easy to do)
HOW TO ENTER:
1. For your main entry, Leave a comment and tell me who normally does the taxes in your household ! That’s it!
You can earn one extra entry for each of the following (only one entry for each ):
2. Comment on a Non-Giveaway post (tell me which one)
3. Subscribe to A Frugal Friend via email or in a reader
4. Follow A Frugal Friend on Twitter
5. Follow H&R Block on Twitter
6. Tweet the following as is: Win H&R Block at Home Tax Prep Software (5 winners) http://tinyurl.com/4skxknl @AFrugalFriend #giveaway #win @HRBlocks
7. Grab my button for your site and/or Add me to your BlogRoll
STAY UP TO DATE: Be sure to Like A Frugal Friend on Facebook to stay informed on upcoming giveaways and deals this holiday season!
Giveaway ends at midnight (central time) on Saturday, March 12th, 2011! Valid for US residents and addresses only. I’ll announce (and contact by email) the winner on this post and the winner will have 2 days to get back to me for delivery details. Limit one set of entries per household.
(A complimentary gift code to redeem was provided, courtesy of H&R Block. The author of this site in no way is giving any tax or legal advice. All tax information is from H&R Block. Please consult a tax professional for any questions you might have.)