The Food Bloggers’ Guide to Tax Deductions

No one enjoys doing their taxes – but they are necessary. Many small business owners, including food bloggers, often make mistakes on their tax returns, which means they end up paying more tax than they should. In fact, QuickBooks found that 51% of small business owners in the UK have experienced this issue. This is partly because many self-employed people are unaware of the wide range of expenses that can be deducted as “allowable expenses” to reduce their taxable profits. You read that right – you can actually deduct things from your tax bill. And we want to help you do this. 

By the end of this guide, you will have a better understanding of the various common tax deductions available to you. We’ll cover all tax deductibles, from expenses like groceries and kitchen gadgets to your website and essential food blogging tools! 

Food blogging as a self-employed profession

There are loads of ways to make money from your food blog, including advertising through ad networks and selling digital cookbooks. But taking it from a hobby to a full-time profession takes time, hard work, and an understanding of the following implications:

IRS Guidelines

The IRS has specific criteria for determining whether an activity is a hobby or a business. To be considered a business, you must demonstrate a profit motive and conduct your blogging activities in a businesslike manner. This includes keeping detailed records, operating in a professional capacity, and consistently seeking to improve profitability.

Greater Tax Benefits

Being classified as a business comes with significant tax benefits. As a business, you can deduct ordinary and necessary expenses, such as ingredients, kitchen equipment, and even home office costs. Hobby expenses, on the other hand, are only deductible up to the amount of hobby income and must be itemized deductions.

Professional Practices

Treating your blog like a business involves creating a business plan, developing marketing strategies, and maintaining a professional website. Using tools like WP Recipe Maker can enhance your blog’s professionalism, making it easier to manage recipes, optimize for SEO, and increase ad revenue.

Setting Profit Expectations

It’s essential to have a reasonable expectation of profit. The IRS often uses the three-of-five rule: if you make a profit in at least three of the last five years, the activity is presumed to be a business. Consistently making a profit helps solidify your blog’s status as a business.

Strict Record-Keeping

Maintaining detailed records of income and expenses is crucial when blogging is your job. Proper documentation not only substantiates profits but also supports your tax deduction claims.

Consulting a Professional

If you are unsure about your classification or how to maximize your tax benefits, consider consulting with a tax professional. They can provide guidance tailored to your specific situation.

Business Bank Account

The Butter Half, a successful food blogger using WP Recipe Maker, advises keeping your business and personal expenses separate. This practice simplifies tax filing and helps you stay organized. As she puts it, “Less time stressing about taxes = more time running an awesome blog!” 

From groceries to gadgets: What’s tax deductible?

For self-employed food bloggers, a business expense must be both ordinary and necessary to qualify as tax deductible. According to IRS guidelines, ordinary expenses are those that are common and accepted in your trade, while necessary expenses are those that are helpful and appropriate for your business. To help you understand what you can deduct, we’ll explore a list of common food blogger expenses and clarify their tax-deductible status:

Ingredients and groceries

Ingredients and groceries specifically purchased for creating content, such as recipe development and food photography, can be deducted.

Deductible items	Any food used for blog content, including ingredients for recipes and special food items for photography, qualify as business expenses. However, personal groceries are not deductible.
Challenge	It can be tricky to separate personal and business expenses.
Solution	Use a dedicated business card for all blogging-related purchases to simplify tracking and ensure you only deduct legitimate business expenses. This makes it easier to keep your financial records organized and accurate for tax purposes.

Kitchen equipment

Kitchen equipment used for content creation can be deducted as business expenses. An example of this might be mixers, blenders, food photography props, and any other appliances used for creating content.

Remember, high-cost items may need to be depreciated over several years rather than deducted in a single year. This means spreading the deduction over the useful life of the item, as defined by the IRS. Also, maintain receipts and records of how the equipment is used for business purposes to support your deductions.

Challenge	Understanding depreciation rules can be confusing.
Solution	The IRS provides guidelines on the ‘useful life’ of different assets, which determines the period over which the asset can be depreciated. Consulting these guidelines can help you apply depreciation correctly.

Internet and phone bills

A portion of your internet and phone bills can be deducted if they are used for business purposes. To do this, calculate the percentage of internet and phone use that is business-related. For example, if 50% of your internet usage is for blogging, you can deduct 50% of your internet bill. Just remember to keep detailed records of business-related internet and phone usage to support your deductions!

Challenge	Accurately calculating business use can be tricky!
Solution	Use tracking tools or maintain a usage log to simplify the calculation. This ensures you have accurate records and can confidently claim the appropriate deductions.

Other home utilities

Self-employed individuals can deduct a portion of their home utilities as business expenses if they use part of their home exclusively and regularly for business purposes. This is known as the home office deduction.

To qualify for this, the space used for business must meet the following criteria:

• Exclusive use: The area must be used solely for business activities.
• Regular use: The area must be used regularly for business.
• Principal place of business: The home office must be the principal place where business is conducted.

If you meet the above criteria, you can deduct a portion of your home utilities, such as:

• Electricity
• Heating
• Water

Direct expenses (specific to the business area) are fully deductible. Indirect expenses (utilities, rent, mortgage interest) are partially deductible based on the business use percentage. Keep detailed records and calculations to support your deductions!

Gadgets and electronics

We all love a new gadget, which makes this next part even better! Gadgets and electronics used for blogging activities can be deducted as business expenses. Things like laptops, desktops, tablets, smartphones, cameras, tripods, and lights are eligible, along with other electronics used for writing, editing, and publishing content.

As with anything like this, always keep logs or records of how these devices are used for business purposes. If items are also used personally, you need to calculate partial deductions. You can calculate the percentage of use that is business-related and only deduct that portion.

Use time-tracking software like RescueTime to track how long you use the gadgets for both personal and business purposes. Next, determine how much of that time is specifically for business using this handy sum: 

Business Use Percentage = (Business Usage Time ÷ Total Usage Time) × 100

Use this percentage to determine the deductible portion of your expenses for each gadget!

Website expenses

Website-related expenses, including hosting fees, domain registration, and premium plugins are deductible. These might include website building fees, hosting fees, domain registration, website design costs, and premium plugins.

And we don’t want to sound like a broken record here but make sure to keep invoices and receipts for all website-related expenses to support your deductions.

Challenge	Managing multiple website expenses can be challenging.
Solution	Use accounting software to track and categorize expenses efficiently, ensuring you capture all deductions accurately.

Plugins like WP Recipe Maker

If you’re using WordPress, plugins are essential for enhancing the function, performance, and user experience of your websites. The good thing about them is that they can be included as a deductible expense! 

WP Recipe Maker was created specifically for food bloggers looking to make more money from their recipes. Not only does it help organize and present your recipes professionally, but it also enhances your blog’s SEO, driving more traffic and potentially increasing your ad revenue. Some of its best features include customizable recipe cards, SEO benefits, and affiliate links, all managed in one place.

And, you guessed it…keep purchase receipts and subscription records for WP Recipe Maker to make sure you can claim these expenses! 

Marketing and advertising

Effective marketing can be pricey – but don’t worry. Expenses for promoting your blog through various marketing strategies, such as social media ads and email marketing services, can be deducted. Things like social media advertising, Google Ads, email marketing services, and promotional materials like business cards all come under this category!

Gifts and giveaways

Costs associated with running giveaways or sending gifts to followers or collaborators can be deducted, but there are specific rules and limits. Things like costs of prizes for giveaways, gifts to followers, and promotional items are deductible all come under this! However, remember that the IRS limits deductible gifts to $25 per recipient per year.

Business meals

A portion of the cost of business meals can be deducted, typically 50%. As with everything, keep detailed records of the meal, including:

• Date and time: Record when the meal took place.
• Location: Note the name and location of the restaurant or venue.
• Business purpose: Document the business purpose and the nature of the discussion.
• Attendees: List the names and business relationships of the people present.
• Receipts: Keep detailed receipts showing the cost of the meal.

This might not seem like the most fun thing in the world, but it is worth doing to save yourself some money! 

Educational expenses

Justifying educational expenses can be difficult. But thankfully costs for food blogging online courses (such as Food Blogger Pro), workshops, industry conferences, and educational books that help improve relevant skills can be deducted.

Don’t get caught out though – make sure the expenses are directly related to improving or maintaining skills in food and/or blogging. Education should not qualify you for a new trade or business.

Mileage and travel expenses

Travel expenses for business purposes, such as attending conferences or meeting clients, can be deductible. These might be mileage for business travel, airfare, hotel stays, and meals while traveling for business.

The IRS standard mileage rate for business travel can be used to calculate your deduction. Multiply the total business miles driven by the standard rate to determine your deduction.

Tracking travel expenses can be challenging, right? However, there are apps and software designed for tracking business travel and mileage, such as TripLog, to simplify the process and ensure accurate records.

Professional services fees

Fees paid to accountants, lawyers, or other professionals for services related to your blog can be deducted. Due to the high costs of professional services, deducting these expenses can significantly reduce your overall tax burden! These include accounting services, legal fees, consulting services, and professional memberships such as the International Association of Culinary Professionals (IACP).

Should I hire an accountant or do my taxes myself?

Tools for tracking your own expenses

If you’re not at the stage where you need professional help, there are various tools and software available for food bloggers to manage their own taxes. Staying organized is probably the most important first step, and these tools offer features to simplify tax preparation:

• QuickBooks Solopreneur offers features like expense tracking, mileage tracking, and quarterly tax estimation. It integrates with TurboTax for tax filing. QuickBooks is popular among small businesses, with 43% of them using it.
• FreshBooks provides invoicing, expense tracking, and time tracking. It’s useful for bloggers who also offer services or freelance work.
• Wave is a free accounting software that includes expense tracking, invoicing, and receipt scanning. It’s suitable for budget-conscious bloggers.

Benefits of using expense tracking tools include:

• Saves you money: The QB Solopreneur costs just $20 a month, compared to accountant fees ranging from $50 to $100 hourly for basic services.
• Organization is easy: Keeps all financial information in one place, making it easier to track expenses and income throughout the year.
• Accuracy is almost completely guaranteed: Reduces the risk of missing deductions or making errors in tax filings.
• Saves time for other things: Automates many aspects of financial management, saving time compared to manual tracking.

Want some handy tips for effective expense tracking? Sure thing: 

• Regularly update and categorize expenses to avoid a last-minute rush during tax season.
• Keep digital copies of receipts and invoices for easy access and organization.
• Set aside time each week or month to review and reconcile accounts.

Tax professionals for bloggers

Not sure when to consider hiring a tax professional? Think about this:

• If you have multiple income streams, such as ad revenue, sponsorships, and affiliate marketing.
• If you are unsure about applicable deductions and tax laws.
• If you have experienced significant growth or changes in your blogging business.

There are a number of benefits to hiring a tax professional to help you out. These include:

• Expertise: Tax professionals familiar with the blogging industry can identify and maximize deductions specific to food bloggers, such as home office expenses, ingredient costs, and equipment purchases.
• Time savings: Outsourcing tax preparation frees up time for bloggers to focus on content creation and other business activities.
• Minimized risk of errors: Professional accountants can help avoid costly mistakes and ensure compliance with IRS regulations, reducing the risk of audits and penalties.
• Quarterly tax filings: Assistance with estimated tax payments and quarterly filings, which are crucial for self-employed individuals.
• Stress reduction: Peace of mind knowing that a professional is handling complex tax issues.

With these pros, there are some drawbacks to hiring a tax professional:

• Cost: Professional services can be expensive, which might be a concern for new or smaller bloggers with limited budgets.
• Finding the right professional: It can be challenging to find a tax professional with specific experience in the blogging industry. To find the right professional for the job, think about:

• Interviewing a few potentials: Gauge their understanding of your industry and find someone you trust and feel comfortable working with.
• Inquire about their client base: Ensure they have other clients who are bloggers or influencers to ensure they are familiar with the nuances of your industry.

Maximize your tax savings today

It feels good to save money, right? And knowing exactly how feels even better. Now that you have a greater understanding of the main tax deductions available to food bloggers, you are ready to start organizing your expenses!

By taking a step into the professional blogging world, investing in high-quality equipment ensures you give yourself the best chance of success – especially knowing that such equipment and tools are tax-deductible. Integrating WP Recipe Maker into your blog can elevate the overall quality and appeal of your content, making it easier to manage recipes and integrate ads and affiliate links, which can be a great source of income for bloggers.

Check out WP Recipe Maker’s pricing plans and take control of your blogging business today!