How To Save Yourself from Tax Headaches

Bloggers need to pay taxes as well. In fact, if you are a professional blogger, you are going to have a more complicated tax process than someone who’s working as a blogger for another company. The self-employment tax process can be a bit more complicated, so you want to make sure you do everything possible to save yourself time with the process without putting your business in danger. Most bloggers work with multiple companies to make money online. Their revenue consists of affiliate commission checks, adsense (advertising) checks, and maybe sponsorship funds. You are going to have to pay taxes on all these items. Things would be simple if you were working with only a handful of companies. But chances are you work with multiple affiliate companies and sponsors. That’s why you want to make sure you stay on the top of your taxes and keep track of things so you don’t have to scramble when preparing your taxes the following year.

Here are 5 simple ways you can save yourself time and effort when dealing with your taxes:

• Stay organized: I can’t emphasize on this point enough. There are a lot of bloggers who like operating in chaos. There is nothing wrong with that if it works for you. However, you can’t take the same approach with your taxes. If you are dealing with multiple companies, you can’t afford to be lazy. Besides, staying organized does help you to focus more on things that matter the most to your business, such as creating high quality content.
• Keep track of your expense: while you don’t want to go overboard with what you write off as your business expense, you still want to keep track of all your blog’s expenses to bring your taxes lower. Using a business credit card could help here. Most business credit cards provide you with an annual expense report each year. If you have only used one or two credit cards, you’ll have an easier time tracking your costs. You’ll be more ready for an audit as well. 
• Get a business checking out: another way to keep track of your revenues and expenses is by opening a business bank account. Not only you can brand your checks with your company name, you can also stay on the top of your costs and checks easily. There are plenty of companies that offer free business checking accounts (e.g. PNC Bank). If you happen to own a more mature blog and make a decent amount of money from it, you may want to sign up for a premium business checking account.
• Use PayPal: there are lots of affiliate programs that don’t send you checks. That has actually worked out better for me. PayPal transactions are much easier to keep track of and the reports you can get out of the system are just superb. PayPal is your best friend if you are too worried about doing your taxes.
• Use Software: I am not a big fan of tax software kits, but accounting software packages are another story. Whether it’s Quickbooks or Peach Tree software, it always pays to be organized and use a software package to keep track of the state of your business. You never know when you are going to get audited, but when you are, you’ll be ready for it.

Preparing taxes is not exactly my favorite activity. But you’ll have to do it if you want to stay in business. Being organized and keeping track of everything (including your receipts) can go a long way towards saving you future tax headaches.

What say you?