I’m taking a break from regularly scheduled programming to talk about something that’s been on my mind lately: taxes.
If you’re an American travel blogger, this post is for YOU! If not, here’a a post about how to kiss in Mongolia that you might like.
Let’s talk taxes. No one likes ’em, but everybody’s gotta pay ’em.
For most salaried employees, however, they’re fairly straightforward. For self-employed people, it gets a lot more complicated. And for travel bloggers? Forget about it.
I’ve searched all over the internet trying to find information on how to do your taxes as a travel blogger, and I’ve had zero luck.
So I decided to enlist the help of Helena Swyter, an accountant who specializes in taxes for creative entrepreneurs. How perfect?!
Since she’s a gem, she kindly agreed to answer all of our questions about how to do taxes for travel bloggers.
You might think taxes are boring, or that there’s not much to know. WRONG.
Not only could you get audited if you don’t file your taxes correctly, but you could end up paying more money than you should! And we all know that I am never into paying more money than I have to.
If you want to know which expenses you can deduct and what income you have to report, keep reading.
I guarantee you’ll learn something new and important from this post — and maybe even save some money!
Travel bloggers, let’s do our taxes right!
How to Do Taxes for Travel Bloggers
Disclaimer: This information is for American residents, and should not replace the advice of your own certified tax accountant. Please use it as a guideline only — and seek personalized help from a professional if you have questions.
If a blogger is constantly on the move, how do they determine their state of residency?
Your state of residence is where your main home is located for the year. This is the place you return to after each trip, the place where your mail is received, the place where you are registered to vote.
If you have a driver’s license, it was likely issued from your state of residence. Each state has its own rules to determine residency, so check with the state department of revenue for more information.
How does being away from their state of residency affect their taxes?
Spending time in other states for business may trigger a filing requirement (i.e., owing taxes in that state in addition to your state of residence).
Each state has a different threshold for how long you can visit on business before you owe tax, but some are notorious for lower thresholds (New York!) or complicated city-tax structures (Ohio!) so check with your tax adviser about all the locations you visited for the year.
If your permanent residence is abroad, your American tax liability may differ, so speak to your tax adviser.
Can they receive per diem deductions?
Per diems are technically for employees, not those who are self-employed. In fact, the IRS only allows self-employed people to use the per diem meal rates. I’d recommend tracking actual expenses instead.
What income does a travel blogger have to claim? Advertising, giveaways, etc?
The federal government is interested in all the income you make from your blog, regardless of how it is made. If you make money from advertising, it’s taxable. If you make money hosting a giveaway, it’s income. Same goes for sponsored posts, affiliate links, and paid appearances
Note that giveaways can have complicated legal ramifications, so make sure you have yours set up properly and are following all state and federal rules to avoid accidentally setting up a lottery and reporting prizes issue. Here’s where I’ve written more about claiming income from blog giveaways.
If they receive a complimentary hotel room or activity, do they have to claim it? How do they determine the amount?
Occasionally, travel bloggers will receive products or services in return for writing about it on their blogs. These items should be considered income in the amount of their fair market value (i.e., the amount an average person would pay to buy the item at retail).
Note that this is a place where you can benefit from good contracts: before you accept an item from a brand or sponsor, get its value in writing. This value can be the actual cost of the item to the company rather than the retail price.
Example: You agree to write about a new backpack in exchange for getting the item for free. You know it retails for $99.99 but the actual cost to the company (the cost to make the item) is likely far lower. Ask the brand what this actual cost is, and put this value in your contract.
If you make this arrangement in advance, you only have to claim the agree-upon value of the item as income, so get those contracts in order!
Another common question I get concerns the swag that seems to show up in your mail once you are known in your industry. Brands you haven’t contacted may send you items in hopes that you will mention them to your followers. If you receive items unsolicited in your mailbox, they are not considered income, even if you end up reviewing them on your blog.
Most travel bloggers do freelance work on the side (or as their main job). Can all of this income be grouped under one sole proprietorship?
The answer to this question really depends on the type of work done and how the blogger treats his or her sources of income.
If you write a travel blog and, on the side, write for other publications, sell your photography, or help others develop their blogs, it’s understandable that you would roll all these activities into one “business” as the items are all related.
If, however, you write a travel blog and also work part-time as a dancer, those two activities would likely be considered separately – operate under different business names, maintain separate bank accounts, etc.
Notice I said they would “likely” be considered separately – we can create one business that covers everything you do (e.g., Helena Swyter Creative Enterprises, LLC could cover tax prep, painting, and house-cleaning if I set it up properly). Talk to your accountant.
Should travel bloggers be paying quarterly estimated taxes on their income?
Absolutely! Not only is it required, but it will reduce the burden on April 15th. (Also, while they aren’t worth losing sleep over, penalties are assessed on those who don’t report income quarterly when required).
I’m assuming that travel bloggers can deduct the normal business expenses that all bloggers or freelancers do — but are there any ones that you think would be particularly relevant for travel bloggers?
One common issue I see is that people think they need to use an asset 100% for business in order to be able to claim the cost on their tax return. This not the case. Certain assets that a travel-blogger would use (cameras, computers, travel-gear) would be a business and personal asset.
This means that we can deduct or depreciate the portion of the asset that is business-related. For example, if you use your computer for the blog 75% of the time, we will depreciate 75% of the cost.
The biggie: are travel expenses deductible? (Other than blogging conferences, which I assume are.) For example: I’m going to a wedding in Hawaii. I’m not going solely for business purposes, but I am working with different vendors while I’m there and will be writing about the trip on my blog. Which, if any, expenses can I deduct?
For those of us who are self-employed, there are many examples of when something is both business and personal (like that trip to Hawaii). The trick is to determine the “business percentage” of the activity. Let’s use your trip as an example.
Let’s say you fly to Oahu and will be there for 6 days – 2 days with the bride and groom, and 4 days exploring the island for the blog and meeting with brands.
From a time perspective, the trip is 66% for business (4/6). Use this percentage to determine how much of your plane ticket to deduct. Other expenses you’ll experience are more clear – the hotel for the time you are attending the wedding is personal whereas lodging during the business portion is a business expense.
What if I go on a trip and don’t work with any vendors, but just post photos and updates on my business social media accounts? Would that travel count as a business expense?
This really depends on the amount of work (e.g., photography) done. In all trips, consider the business percentage of what you are doing (as mentioned in the previous question) and deduct accordingly.
Is travel gear and clothing deductible?
Clothing is VERY rarely deductible – it has to be a uniform (something your boss makes you wear) or protective (steel-toed boots). Clothing for travel bloggers would likely not qualify.
Gear used for the business of travel blogging would either be deductible as an expense (meaning that the entire cost would be taken in the year the item was purchased) or depreciated (meaning that the cost would be spread across a few years depending on what the IRS deems is the “useful life” of that asset).
Smaller items – like a backpack, for example – are likely to be considered expenses. Larger items – like a camera – are depreciable. The short answer is yes, your travel gear is a business asset. When and how depends on what you purchase.
TOOLS & TIPS
Should travel bloggers have separate business and personal bank accounts? What about credit cards?
I advise all bloggers who are treating their blog as a business to open a separate bank account for the blog. Separate credit or debit cards are good as well. This shows that you are treating the activity as a business (rather than a hobby) which may be helpful if anyone ever questions a year when your blog had a loss.
Additionally, it’s good practice to keep things separate – you will be in a good place should you ever want to change the legal entity associated with your blog (i.e., incorporate).
What digital tools and resources do you recommend for travel bloggers to keep track of their expenses and deductions?
- Milebug: to track miles driven for work on a car you own
- Shoeboxed: receipt scanning with your phone
- Your phone’s camera: not a flashy app, exactly, but can be used to snap photos of receipts if needed
Susan’s note: I love Freshbooks! I use the free version for invoicing freelance clients, tracking my time, and recording business expenses. Click here to see more of my favorite digital nomad resources.
At what point do you think it makes sense for a travel blogger to hire an accountant for their taxes?
Bloggers of all sizes can benefit from working with someone who knows their industry and can advise on everyday matters to ensure that taxes are as painless as possible!
Consider working with an accountant if you’d like to have someone on your “team” to answer all your questions about bookkeeping and deduction and help you wade through the world of multiple state returns.
Need help? Get in touch with Helena!
A licensed Certified Public Accountant (CPA) with her Masters in Taxation from the University of Illinois, Helena Swyter helps people turn their passions into careers.
After seven years in the corporate world, Helena formed SweeterCPA – a company dedicated to providing tax, accounting, and business advisory services to creative entrepreneurs, creatives, and independent small businesses.
A big THANKS to Helena for sharing her knowledge with us! Was that helpful? What else do you want to know? If you have basic questions, please post them here in the comments so that everyone can benefit!
This post may contain affiliate links. Click here to read my full disclosure.