Bloggers should get professional liability insurance and other kinds of coverage if necessary, as “blogging insurance” is not a well-established form of coverage. Even if bloggers work for larger firms, there is no guarantee that their employer will protect them from liability claims.
Do you need a license to be a blogger?
If you’ve already founded your business entity, getting a business license is the next step in turning your blog into a small business. Varied cities and states have different licensing requirements, so the licenses you’ll need may vary depending on where you live.
- Business License: The Small Business Administration (SBA) has a guide that explains the federal and state licenses you’ll need for your small business. Although most bloggers do not require a federal license to operate, most states do require that they have a general business license.
- If you plan to sell goods or services on your blog, you may need to obtain a sales tax license or permission. Find out if you need to apply for a sales tax permit or a resale number by contacting your state’s revenue or taxes department. If you sell, rent, or lease things or provide a taxable service on your blog, you’ll almost certainly need one.
- House Occupation Permit: If you plan to run your blog entirely from your home, you’ll almost certainly require a Home Occupation Permit. For additional information on what you’ll need to lawfully operate a home-based business, see the Small Business Administration’s website. The websites of your local government can provide you with all of the following licenses and permissions.
- Employer Identification Number (EIN) or Tax Identification Number (TIN). For your blog, you will need to obtain an EIN. Visit this site for more information on how to accomplish it. Your EIN is a one-time request that is valid for the duration of your company’s existence.
You’ll want to keep track of when your business licenses and permits need to be renewed. Most require annual renewal, and you should be notified of your renewal date via letter. License and renewal costs are tax deductible, so keep track of them.
You’re ready to start blogging as a real business once you’ve formed your business entity and obtained the necessary permits. Your responsibilities as a small business owner, however, do not end here. Estimated quarterly taxes, accounting and small company bookkeeping, and submitting taxes as a business are just a few of the maintenance obligations that must be kept up with.
Does a blog need an LLC?
Is an LLC required for my blog? This is a typical question, and the answer will depend on your specific situation. In the end, you must decide whether an LLC or another business structure is right for your blog or brand.
Bloggers establish a corporate structure for a variety of reasons, the most prevalent of which is to protect their personal assets. LLCs and S corporations are two of the most prevalent solutions considered by many bloggers in these situations. An LLC is typically a better alternative than a traditional C corporation or S company since it is faster to set up and has less formalities.
Is blogging considered a business?
Although blogging is a relatively new job, it is subject to the same tax regulations as many other professions. The primary tax risk is that, unlike traditional employees, you will not have your taxes automatically deducted from your profits as a self-employed blogger. You’ll also owe self-employment taxes, which most employees fail to pay. However, you may be able to minimize your tax payment by taking advantage of certain deductions.
Estimated taxes
Be aware that as a blogger, you’ll almost certainly have to deal with anticipated taxes, which most typical employees don’t have to deal with.
The American tax system is based on a “pay-as-you-go” model. You must pay estimated taxes to the IRS every quarter because no taxes are deducted from your blogging income. Estimated tax payments are due on April 15, June 15, September 15, and January 15. (with some exceptions for holidays, etc.). You may owe an extra tax penalty if you don’t pay your anticipated taxes on time. You may be eligible to avoid paying anticipated taxes if you had no tax liability the previous year or if you owe less than $1,000 in taxes.
Self-employment tax
Don’t forget to set aside extra money for self-employment tax when saving for your expected income taxes. Working as a blogger means you’re running your own business, according to the IRS.
Even if you only work part-time as a blogger and work full-time at another job, the blogging portion of your income counts as self-employment income. As a result, you must pay self-employment tax on that income, which is equal to the sum of an employee’s and an employer’s Social Security and Medicare taxes. You must pay both the employee and employer parts since you own a business. Whether or not you owe federal income tax, you must pay self-employment tax.
Deductible expenses for bloggers
The good news is that if you run a blog as a business, you can deduct expenses that are considered reasonable and necessary for your trade. If you spend for advertising, supplies, office furniture, electronics, insurance, or other items and services directly related to your business, you can deduct those costs from your blogger earnings. You may be able to deduct some of your domestic expenses, such as rent and utilities, if your office is in your home.
Business as hobby
If your blogging business is classified as a hobby, the IRS will disallow your tax deductions. You must show the IRS that you are running a legitimate business in order to claim your deductions. Earning a profit is the most obvious way to demonstrate this. You can normally qualify your business as genuine if you have made a profit in at least three of the last five tax years.
The IRS may also look at how much time and effort you put into the business, whether you rely on it for revenue, and if you can fairly anticipate to generate a profit in future years.
How do I legally start a blog?
There are five steps that every blogger should do to become legally recognized.
- Make sure that all of your sponsors, collaborators, contractors, and vendors are covered by good contracts.
Do blogs need privacy policy?
If you own or administer a blog, it’s vital that you post a Privacy Policy that complies with the laws of every jurisdiction where your blog’s users live. This safeguards your readers’ privacy while also shielding you from legal repercussions.
Can a blog be a tax write off?
Your blog will be classified by the IRS as either a business or a hobby. If you have a blog as a hobby, you won’t be able to claim any tax benefits. To be considered a business, you must have made a profit in at least three of the previous five tax years.
Treat your blog like a business.
You can’t get enough of it. From your peers. At conventions. During podcasts, for example. On other websites. From our end.
Many people like the notion of running their blog like a business, but they’re not sure how to go from hobby blogger to business owner.
One of your first tasks should be to assess whether or not incorporating your company makes sense. After you’ve learned about the advantages of incorporation, you’ll need to figure out which business structure is best for you.
Because starting a corporation has legal and tax ramifications, we recommend consulting with an accountant and a lawyer to be sure you’re choosing the optimal structure for your company and personal circumstances.
Sole Proprietor
You are a sole proprietor if you decide to run your blog as a business with you as the sole owner and haven’t filed any paperwork with the Secretary of State.
Cons of Sole Proprietorship for Bloggers:
- It’s possible that you’ll still need to apply for a business license. To learn if your state requires a business license, go here.
- If you want to operate your business under a different name than your own, you’ll need to file a DBA. (For more information, see below.)
- You will be responsible for your company’s assets and liabilities. If your company is sued, for example, you will be personally liable for any judgment entered against it, and your personal assets may be taken. (This includes your home, automobile, and bank accounts.)
DBA
We’re frequently asked if a blogger has to file for a DBA, or “doing business as,” license. A fictitious name registration is the name given to this type of application (but the phrasing may vary depending on where you live). This is typically utilized when your company has a different name from the entity that controls it. For example, if your blog is called Smithtastic Smoothies and you are Joe Smith, you should file for a DBA as Smithtastic Smoothies.
While a DBA is usually required whenever the business name changes, it does not replace the necessity for a business license for a lone proprietor. Check your local requirements to be sure you’ve filed everything you need to.
Cons of the C Corp for Bloggers:
- Corporations are more regulated than other structures and require more formality. Shareholders elect directors, and directors appoint the corporation’s officers.
- Annual board and shareholder meetings are necessary (together with the minutes of those sessions).
S Corp
Legally, a S Corp is the same as a C Corp; nonetheless, a S Corp is an unique classification with the IRS that allows it to be taxed differently than a C Corp. We recommend speaking with your accountant to see whether the S Corp taxation method is appropriate for you.
You can also elect to have your LLC taxed as a S Corp if you decide to use the LLC as your legal business structure.
LLC
An LLC is a limited liability firm that has many of the advantages of a corporation (limited liability) but none of the formalities. Taxation is handled differently as well.
Cons of the LLC for Bloggers:
- Because you can’t issue stock, it’s less appealing if you’re looking for finance.
Bloggers routinely argue the differences between an LLC, a C Corp, and a S Corp. A comparison of some of the aspects of each construction is shown below.
One thing to keep in mind is that a S Corp will be treated similarly to a C Corp from a legal standpoint.
Which form is best for YOUR business?
It will ultimately be up to you to choose the optimal structure for your company. Bloggers establish their business structures for a variety of reasons, but the most common reason we hear is that they wish to protect their personal assets. When we speak with people, they are usually contemplating whether to form a S Corp or an LLC.
We usually advise bloggers to form an LLC since it is simple to set up and requires less corporate formality. Furthermore, and perhaps most crucially, an LLC will provide you with the limited liability that you desire while avoiding many of the headaches that come with a C Corp.