Is Blogging Income Taxable?

Have you ever thought it would be possible for a person to make money through a blog? Similarly, can they make a living out of blogging? And, is their blogging income taxable, or is it just a myth?

The short answer to all three questions is a YES. Blogging and earning money is not a theoretical concept but a reality. Therefore, anyone with a basic knowledge of blogging and SEO can start a blogging business and make money. With the rise of social media, the demand for content creators and bloggers is rising. That’s a fact!

The blogging profession is famous not only because it gives a chance of self-expression, but it is also very lucrative.

Through blogging, one can show creativity and ideas to a broader audience. Whether you live in Australia, the USA, the UK, or Canada, and if you have a blog, your blogging income is taxable.

However, the payment of a blogger is subject to tax provisions under the Income Tax Act in some countries. Taxes for bloggers are easy to manage and relatively straightforward, but it can be confusing in many cases. That aspect will be covered in this article as well.

Before moving further about blogging income tax, it is necessary to understand the concept of blogging. What is a blog and blogging?

What is Blogging?

Blogging is a form of writing, photography, or any other media that one can publish online. It is an opportunity for individuals to write diary-style entries.

Nowadays, most websites incorporate blogging into their business. Some of the hallmarks of blogging include informal language, frequent updates, etc.

It is also an opportunity for readers to start a conversation and comment on a particular blog post. The blog’s content varies significantly, depending on the blog’s niche.

Most entrepreneurs prefer blogging as they see marketing potential. Similarly, the adoption of blogging among the business community makes this medium more popular. However, one can use a blog not only for marketing a business but also as their home business.

How Blogging Works and Why it is Different from Traditional Websites?

In blogging, you have to obtain a website and publish original content. Moreover, tech-savvy bloggers can buy a domain name and build the website according to their niche.

People who don’t have that much knowledge and skills to do HTML can create an account on sites like WordPress, Blogger, Wix, etc. Hence, these websites simplify the web design and the overall publishing process.

Blogs are simple websites with different pages and posts. For instance, a blog website must have an about us page, services page, contact us page, terms, and conditions, privacy policy and FAQs, etc.

However, the blog itself is just a single page that one can scroll down. Thus, it is like a feed on social media sites, just like we see on Facebook.

The best thing about a blog is that it shows the newer content first on the top of the page.

Blogs mostly have single authors, but when any company maintains a blog, they can hire freelance writers or a team of talented writers. These writers write a blog post for these companies and then get the payment according to the word count.

Another unique feature of blogging is that it provides interlinking. Now the question comes to your mind what is interlinking in blogging?

Interlinking occurs when a blogger links to another person’s blog within their blog post.

For instance, if any music teacher has a blog and writes about forming a chord, they can show it as an example by linking it to a musician’s blog. Similarly, interlinking in the comment section is also essential as it fosters a sense of community.

Sometimes confusion occurs that is a blog and website the same thing, or is there any difference between the two terms?

The valid answer to this question is the difference between a blog and a website. However, two essential blog features differ from a traditional website.

First of all, websites offer static information that rarely changes, while one can frequently see new content in a blog.

For instance, if there is a technology blog, one can see blog posts related to new technology updated frequently. Then, a food blog comes with new recipes and other essential blog posts all the time.

Secondly, another essential feature of a blog is that it allows reader engagement.

If a blogger, along with the blog, has a social media presence, then they can reach a larger audience. Some websites allow for conversation, but on the other side, blogs allow more interaction and discussion.

Traditional websites have primarily one-way communication, while blogs enable two-way communication. In blogs, it is easier for the audience to engage with each other and with other content creators.

15 Essential Benefits of Blogging

When blogging began, the original purpose was to share personal lives online. But today, it goes from unique to professional blogging.

In short, people do professional blogging to promote their brand and business.

The following are 15 essential benefits of blogging.

• People do blogging to share their passion.
• If you like to educate others, blogging is the best choice.
• Business owners
  do blogging to increase the exposure of their brand.
• As you blog about the niche in which you have more knowledge, people recognize you as an authority in that particular niche.
• Another great advantage of blogging is quickly ranking in search engines.
• You can also post on different social media channels by creating blog content.
• One can quickly build trust and online identity through blogging.
• Through blogging, one can learn many new things.
• My writing skills improve while continuously writing blog posts.
• You will learn new vocabulary and tech-related systems, tools, methods, etc.
• One of the best benefits of blogging is connecting with others.
• Whether your blog is personal or professional, you can get immediate feedback.
• Blogging gives you the chance to work from any location at any time, so it provides you freedom.
• If you have a business website thus, you can sell more products.
• You can become an author as publishing companies recognize top bloggers and offer them book deals.

Now let’s turn on to blogging income…

Blogging Income

To earn it, one has to think like a CEO and treat their blog accordingly.

All types of blogs express the writers’ opinion, and they are an independent source of information. Bloggers update their content regularly and then apply different monetization strategies to earn income from a blog.

Bloggers Important Sources of Revenue

There are many sources through which a blogger can earn money from a blog.

Below are some of the essential sources of revenue for bloggers.

1. Advertisements

The most popular source of income for a blogger is earning money through advertisements. Most importantly, the blog can also be a platform to promote its products and services. Google AdSense provides good benefits to bloggers. Thus, these bloggers make ad space available on the website for businesses. Therefore, the blogger makes money whenever any reader clicks on the ad.

2. Selling EBooks

Another important source of income stream for bloggers is selling e-books.

When you write, publish and sell an e-book, it is a one-time investment, but it will pay for many years to come. However, writing an e-book is not a simple task; it needs proper time, planning, and research.

3. Affiliate Sales

The blogger in their blog places links to products and services. Thus, when readers come to your blog, they will click on the link. Then, they will purchase that particular product or service. As a result, the blogger will earn money.

The whole concept is called affiliate marketing.

4. Paid Reviews

Many companies can approach a famous blogger for paid reviews. However, these companies will request the blogger to do a paid review. The blogger will then publishes that review and earn money.

5. Create and Sell Online Courses

Well, as everyone is good at something, whatever skill you have, you can turn that into an online course.

There are ways through which one can host an online course. For example, you can create it on Udemy. Hence, when users register so, you will earn money. Moreover, bloggers can charge for the lessons to sell them on their websites.

How to Pay Tax on Your Blogging Income?

When you have a blog and earn income from it, you must pay tax.

When operating a blog business, you have to file an income tax return and pay taxes each financial year.

For instance, if your net earnings from self-employment were $400 or more or under, you still have to file an income tax return. But before determining if you are subject to income tax or self-employment tax, you must calculate your net profit or loss. (remember to clarify these numbers through your Tax Office and Accountant, as the laws depend on the country to country)

The following is the equation for your taxable blog income.

Total Blog Income – Total Blog Expenses = Net Income (or Net Loss)

It is also necessary to understand what kind of blog you are running before determining your taxes.

Therefore, there are three stages of blogging, front of the taxation department.

1. Hobby Bloggers

These bloggers write blogs just for fun and to show their creative side. Their income is low, inconsiderable or no income at all.

2. Side Hustle Bloggers

They do blogging apart from their day job to grow in this field and earn some extra income slowly.

These bloggers are in the early stages of building something significant.

3. Full-Time Bloggers

Bloggers who prefer to give their full time will consider blogging as their primary business. They earn a significant income through their blogging business.

All of the above stages require a different take on managing taxes and practicing bookkeeping. But always remember that every time you earn from a blog, you have to declare that and pay tax on that income.

Is Blogging Income Taxable in Australia?

Managing taxes is not an easy task for most people. Blogging income is taxable in Australia. But, you cannot afford any errors in your tax returns.

The Australian Taxation Office (ATO) can enforce administrative penalties for misleading tax return statements. The penalty can be around $110 to $210, but you have to pay five to twenty times of this penalty, depending on the offense.

Also, it is best if you separate your business and personal expenses. For that, you need to create a company for your blogging business.

Always set up an account for your business and use it for your expenses. However, it is also easier for you to pay taxes.

It is best to prioritize your tax responsibilities alongside building an audience as it helps in flourishing your business. One must also know what tax deductions they are eligible for and pay.

For example, any cost you incur as an income is eligible for tax deductions. Thus, please keep the Australian Taxation Office (ATO) three golden rules in mind.

• You should spend all money by yourself.
• The deduction should relate to your earnings only.
• And, there is a record with you to prove it.

The following are the most common deductions for you as a blogger.

• Computer equipment
• Internet cost
• Communication expenses
• Office expenses
• Advertising Design
• Any other promotion
• Office equipment
• Cost of Accountant

Hence, there are many deductions that you may be eligible for in your tax return as a blogger from Australia.

Is Blogging Income Taxable in the USA?

Blogging is a new but popular profession, but it has the same tax laws as any other occupation in the USA. Therefore, it is correct to say that blogging income is taxable in the USA too.

As a blogger, you have to pay estimated taxes in the USA. The tax system in the USA commonly operates on a “pay-as-you-go” basis.

There is no tax deduction from a blogging income, and the blogger has to pay estimated taxes to the IRS every quarter.

The dates for the taxes are 15 of every April, June, September, and January, with exceptions for holidays. In short, if you don’t pay the taxes, then you will face a penalty.

Another important thing in the USA is setting aside additional money for self-employment tax.

From the IRS perspective working as a blogger means running your own business. Thus, the blogging part of your income comes under self-employment, so you have to pay self-employment tax as it is your own business. It is your responsibility to pay both employer and employee portions.

Is Blogging Income Taxable in the UK?

Yes, blogging income is taxable in the UK too. Bloggers pay taxes just like any other profession does.

If you earn £1000 or more from your blogging activity, you must pay tax via a self-assessment. However, self-assessment means you have to fill out the form to tell HMRC your yearly income. Here you will also calculate how much tax and national insurance you owe. You will submit an income tax online once a year by 31 January. Then, you will pay tax twice a year by 31 January and 31 July. It is also essential to keep track of your income and business expenses.

The Tax Rates in England

Band	Taxable Income	Tax rate
Personal Allowance	Up to £12,570	0%
Basic rate	£12,571 to £50,270	20%
Higher rate	£50,271 to £150,000	40%
Additional rate	over £150,000	45%

The National Insurance Rates

Class	Tax Year Rate for 2021 to 2022
Class 2	£3.05 a week
Class 4	9% on profits between £9,569 and £50,270 2% on earnings over £50,270

Conclusion

Blogging income is taxable, and if you have a blog, it means you have to pay taxes.

Blogging income falls in the Income from Business/Profession section. Therefore, according to the Income Tax Acts, all bloggers will need to pay taxes, excluding allowable expenses.

These expenses include domain hosting expenses, rent expenses, utility expenses, etc.

In all three countries that is Australia, the USA, and the UK, blogging income is taxable, but all countries follow their own rules and regulations that one should follow.