Here’s a true story. Cynthia Hess—aka Chesty Love when she’s on stage as an exotic dancer—believed that if she had her breasts enlarged, she’d be more competitive in her profession and therefore make more money. So she went for it…big-time. She went up in bust size to fill a 56FF. But when she tried to deduct the cost of the procedure as a business expense, the IRS disallowed it.
She later appealed to the tax court and won. Why? The court’s view was that her breasts were unusually large and not the type normally desired by women attempting to improve their personal appearance. In other words, they were a “stage prop” purchased solely with the intent of increasing her business income.
Since most writers and bloggers don’t rely on their physical appearance to earn a living, we’d likely have a difficult time convincing the IRS that any cosmetic surgery procedure is tax deductible. Fortunately, though, there are plenty of other expenses which you may be able to write off. So how does one know which can be deducted and which can’t? The general rule of thumb is this: you can deduct almost anything, provided the expense, according to the IRS, was both ordinary and necessary to your attempt to produce an income as a business person. In layperson’s terms, if you spend money on something you need to run your business, or that will help you generate or increase business income, it is likely tax deductible.
To give you a better understanding, here are some examples of expenses you may be able to deduct.
BLOGGING EXPENSES
- Hosting Fees
- Domain Registration Fees
- Internet Access Fees
- Blogging Software or Services
- SEO Services
- Royalties
TECHNOLOGY
- Computer
- Computer Repairs
- iPad/Tablet
- e-Reader
- Router/Hub
- Peripherals
- Software (i.e. anti-virus, bookkeeping program, etc.)
- Web Camera
- Printer
Read Related: 9 Year-End Strategies to Lower Your Taxes
COMMUNICATIONS EXPENSES
- Cell Phone and Service
- Email Service
- Land Line and Service
- Fax Machine
- Camera
- Voice Recorder
OFFICE EXPENSES
- Office Rent
- Furniture
- Office Supplies (i.e. stationery, paper, etc.)
- Office Decor
(If you work out of your home, and have a room used exclusively as your office, you may be able to deduct a portion of your rent or mortgage interest, utilities, insurance, repairs, and depreciation.)
PROMOTION
- Business Cards
- Design Services
- Advertising (phone directory, web sites, logoed clothing, newsletters, etc.)
- Promotional Giveaways (i.e. imprinted pens, calendars, greeting cards, etc.)
TRAVEL & ENTERTAINMENT
- Conference Fees
- Hotel Charges
- Meals on the Road
- Entertainment for Prospects or Clients
- Transportation (air, train, car, etc. to and from business meetings/conferences)
PROFESSIONAL FEES
- Association Dues
- Guild Memberships
- Civic Organizations
RESEARCH & DEVELOPMENT
- Books
- Magazines
- Online Subscriptions
- Interviews
- Data Banks
Of course, this list is by no means complete. And the subject matter you blog about may also allow for some additional deductions. For example, if you do product reviews, you may be able to write off the cost of items purchased. Or if you write about food and restaurants, you’re likely able to deduct the cost of the ingredients and meals.
In addition, if you are an independent contractor, or self-employed, you are probably eligible to make a tax deductible contribution to a retirement plan.
Since the rules are constantly changing, it’s a good idea to hire a tax professional to give you advice and help you prepare your return. If you choose to do it yourself, there are several great software programs (tax deductible, by the way) to make it easier. In addition, you can reference IRS Publication 535, which discusses common business expenses and explains what is and isn’t deductible.
One final note. The main reason most people hesitate to deduct legitimate business expenses is because they are afraid of getting audited by the IRS. Don’t let this keep you from deducting expenses to which you are entitled. The chances that you’ll be audited are very low. If by chance you do get audited, as long as you haven’t intentionally provided false information, the IRS will likely just correct your return for you and make an adjustment to your tax due.
