I am home from work today with a sick child. She just finally fell into a much-needed nap on the sofa, so I thought I’d finally catch up on this series of posts I wanted to do from my trip to the Blissdom Canada conference. You can read the first post here, and this is the second one.
There’s no formal training to become a blogger. You teach yourself what you can and you learn from other more experienced members of the blogging community. That’s why blogging events are such a big deal in our world — we get to connect with our community in a face-to-face way and we also get to learn more about this crazy craft called blogging.
I just attended one of this “big deal” events — Blissdom Canada — over the past weekend (I attended last year too). Held in Toronto, 500 bloggers flocked in from all provinces to learn, network, and party.
To Book Keep or not to Book Keep
If you keep a blog, you can consider it a hobby and leave the taxman out of it. But once you start accepting advertisements and products to review, you’ve got a business and the taxman will want his share.
To book keep is a burden. This alone makes me question (regularly!) if I should cut out all advertising and product-related talk on the blog. It’s an internal dialogue that I don’t enjoy because more than anything I enjoy my blog and I do enjoy what I write about here.
Nothing in Life is Free
It’s a bit of a grey space in the blogosphere at the moment on how to book keep and what you should and could claim. I have yet to speak to a blogger and hear the same answer twice on how they manage the notion of book keeping. So my curiosity led me to a Blissdom Canada microsession on Book Keeping for Bloggers.
More than anything, the session simply reinforced in my mind that ‘nothing in life is free’.
The Summary
This session was led by Brian Kent-Baas. I’ve never spoken to Brian before, and yet despite being a complete stranger to me, I attended his wedding. So that was weird. Anyhow, he was a lovely guy who likes to fill his head with tax-related knowledge and isn’t afraid to say when he doesn’t know the answer to a question (which I really appreciate).
Like any business, you need to track your income against your expenses. If there’s anything left over at the end, that is profit and it’s taxable. I’ve heard of many people trying to run their businesses at a loss so they can avoid taxes, but according to Brian, you can only do this for three years. After that point, you need to show some profit.
What is income?
Income for a blogging can be any of the following listed below. That means that you need to know the value of the product or service and have the paperwork to back it up. This is a mind-shift from thinking that “income” is something you can pay your bills with because “income” could be a tube of toothpaste a company just sent you!
- Any product a company sends you to review (whether you write about it or not) or giveaway to readers
- Any trip a company or agency sends you on (yep – airfare, hotels, food, the whole bit!)
- Any advertisement shown on your blog or revenue received from an advertising network
- Now that your blog is a business, you have office space in your house and you can claim expenses related to its upkeep. That includes a portion of your home’s insurance, heating, electrical, etc.
- Your internet is a necessary business tool. You can claim 100% of it.
- When you drive to meet a sponsor or attend a networking event, you can claim the mileage and/or fuel to do so.
- Also, those additional services you might need for your business such as book keeping (of course!), website design or coding, hosting, and domain name ownership.
What did I miss?
If you attended this same session or if you have your own experience related to blogging and book keeping, please let me know any other tips that might be helpful!
I was there! It was a great session. Did you ask Brian for his spreadsheet to keep track of your expenses? I got a copy but I have to admit, even filling in “simple” numbers is pretty tough for me. We’ll see what happens at tax time!
Some things I would add to your summary:
* you have to show profit after three years or else your income becomes reclassified as “hobby” income, not business income. You still have to claim it, but since it a hobby you can no longer claim any expenses.
* if you make less than the basic exemption amount you technically do not need to bother messing around with expenses, but Brian recommends doing it anyway to a) establish yourself as a legit business for future growth purposes and b) just to get in the habit of keeping track of everything
* keep EVERY receipt, and sort them by expense TYPE, not by date – i.e. all the marketing stuff together, all the advertising stuff together, all the house-related expenses together, etc. You will require some sort of paperwork from people who are giving you products as to what the worth of that product is – an email with this info in it is okay.
* if you have a regular day job, the income from the blog business gets added in with that – which means a small amount of blog income will still be taxed at the same rate as your day job income. This might eat up all your blog income, but you can help get some back via expenses – just remember you still have to show a true profit from the blog within three years or all your past expenses are invalidated (because it was “just a hobby”).
Wow … okay, so I missed A LOT! Especially this: “…Just remember you still have to show a true profit from the blog within three years or all your past expenses are invalidated” – yikes! I totally missed that part. The whole thing sort of makes me feel like weeping … just like anything to do with html coding … Thanks so much for sharing all these extra details Lynn!
Great points all, this is an excellent summary. Julie and Lynn you hit the nail right on the head, blogging is turning into a very legitimate business and I am so happy that theses main points came through I feel like I held a successful session.
Lynn your point on getting your self started by tracking is great advice, every time I meet with a client I find that I am helping them get organized and encouraging them to track everything, because how else do you know if your actually making money.
Another quick tip to add is: you can have digital receipts, if you choose to have digital receipts ensure they are in a format that can be viewed by CRA. So taking a digital scan is ok, and will make your organization a lot easier just be sure to save a back up because if you loose them, CRA is going to say too bad
I forgot about the digital receipts! I do remember you mentioning some handy dandy gadgets for that. Thanks for coming by to visit and add some extra points, Brian.
Thanks for sharing! I didn’t go to this session and I wondered what they talked about… I have a lot to learn! Sigh.
I have not attended a Blissdom Canada conference or any other blogging conference for that matter, but I really hope to attend 2013. Just reading through some of the posts attendees have shared and I am getting so stoked! This is all fantastic information and I appreciate the depth you have gone to Julie ( and Lynn) in sharing it. I hope to be able to put this all to good use someday.
Suz
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