It is that time of year again. Everyone is scrambling to figure out what to do about their income tax returns. As a blogger, do you know how you are going to file your blog income? Is your blog a hobby or a business? Keep in mind that every tax situation is different. Your blog friends online most likely know nothing about your taxes. Even I, a former tax preparer of 9 years, have no clue about what you should do about your tax situation. I quit doing taxes about 7 years ago and have no clue what the laws are now regarding taxes. As a former tax preparer, even I have questions about filing my own taxes this year. The question is-where do I get this information? Getting information from someone online that “says” this is how you should do your taxes may end up costing you in the long run.
I can’t tell you how many “tax advice” articles and webinars I have seen online. My question about this advice is who is providing this information? Another blogger? Are they tax professionals? Who is this person telling me how to file my taxes? Keep in mind that not everyone online is who they say they are. Believing what these people say can lead you into a lot of hot water in regards to your finances. Trust me, you don’t want to be on the receiving end of the letters from the IRS telling you that you owe them money. I know this dreaded feeling all too well. I have had two years in a row when I was self-employed where I owed over $10,000 per year. The IRS started garnishing our paycheck. We had to get a loan to pay it off and we are still paying the loans off. These debts are from over 6 years ago. I still feel my heart drop when I see mail from the Internal Revenue Service in my mailbox-even though I know I been doing everything the right way. I seek professional advice when I have a question.
Being a member of several blogger communities, I have seen many of my blog friends discussing their taxes. Everyone has a different take on what to do with their taxes as far as their blog income, review items, winnings, etc. This is where I tell you to be careful. Everyone has their own interpretation of the tax laws regarding this. Some say you should claim the review items as income and others say it is a gift and therefore is not taxable. So, now you wonder, how do I find the right information? My advice as a former tax preparer is to speak to someone that you KNOW is a tax professional. NOT some stranger online that may or may not know the laws. I have contacted my former supervisor, an enrolled agent with the IRS, with all of my questions. She has been doing taxes for about 40 years. She has also taken extensive testing from the IRS to attain the designation of being an enrolled agent. I trust her with my life as far as taxes go. An enrolled agent or other tax professional can even give you advice as to whether you need to pay taxes in quarterly so you won’t end up in a pickle at the end of the year.
So, who should you talk to regarding your taxes? I would advise talking to an enrolled agent or a CPA. They take continuing education courses annually to maintain their credentials. Most have a network of other knowledgeable tax professionals that they can turn to in the case of something that they may not have had experience with. Keep in mind, you may be the first blogger that they have talked to and they may need to do a little research before giving you an answer to your questions. There is nothing wrong with this. The first time I did a tax return with a farm on it, I had no clue where to start. I took down all of the person’s information and then consulted with my supervisor, the enrolled agent. I ended up doing a professional tax return for my clients and they were very happy.
My final advice is to BE CAREFUL who you trust-you may end up in a mess with your taxes and believe me-that is the last place you want to be. Granted, a professional will most likely not be free, but it is well worth the expense.