This is going to start an ongoing series-within-a-series as to the business-side of sponsored blogging. While I know you have read many, many, many "how-to" articles that suggest you "treat your blog like a business" and so on and so forth, that is not what this is about.
Sure, you should approach your blog as a business, but that's because, if you accept advertisers and sponsored posts - even low-paying programs like AdSense and Amazon Affiliate - it is a business! It doesn't really matter if you get dressed as though you are going into the office (I don't - in fact, I am nekkid right now!); it doesn't make much difference how well you research your subject; it does not matter how good your grammar are. These little rules and tips are about approaching your blog as a business; no matter how you approach your blog, if you are making money, the IRS considers your blog a business. So you can approach your blog however you choose, but you have a legal obligation to handle your blog as a business.
Obviously, none of this applies if you do not advertise on your blog or otherwise receive monetary compensation. While it may apply if you receive PayPal donations or readers send you things from your Amazon Giftlist, you'd have to receive a shitload of either; unless your donations/gifts amount to several hundred dollars, I wouldn't worry about it. Of course, just to cover your butt, I highly suggest you look into it on your own.
On the other hand, if you make $400 or more from your blog, you must file taxes on that. You are considered "self-employed"; specifically, probloggers are considered independent contractors.
What I am going to do is continue adding to this series as I prepare my taxes for the 2007 year. While it would be neater to wait until the end and write one, overall post telling you what needs to be done and so forth, the very nature of researching is finding things as you go along, then dismissing them when you are finished; in this process, a lot of the intermediate steps which are not pertinent to my situation (but may be to yours or others') will get lost in the shuffle and would not make it to the final draft. This way, I can basically give you a kind of flowchart of my progress which you can then use to direct your own research into the matter.
For the most part, I would expect all of our tax needs and so forth to be the same, but because of the very nature of the business - some receive products/services to review, some make more than others, some may choose to actually set-up a business (with a DBA, license, so forth) - there will likely be exceptions.
Look forward to following articles on this subject over the next several days.
© C Harris Lynn, 2008
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