How to Keep Track of Your Blogging Expenses
Last month I shared with you how I keep track of my blogging income. It’s been a lifesaver for me so I always know how I’m doing and who owes me money. I had a few requests about how to keep track of the other side of the coin: the expenses!
Keeping track of your blogging expenses uses a very similar method as the blogging income. I keep records by month in a Google spreadsheet and then at the end of the year just have to grab the totals from the various categories to plug into my tax return. Please note that tax laws vary depending on where you live so you will need to check on what you can and can’t claim. What I’m showing you here is just basic bookkeeping so take what you can use and leave out what you can’t.
Remixed. Image Source.
Keeping Track of Money Owed
The first sheet in my blogging expenses spreadsheet is for Payables. This is when you owe someone money. Often times, you have to pay when you buy something, but there are times when you can pay at a later date. This sheet just helps you keep track so you never forget!
Recording Your Monthly Blogging Expenses
Each month, I record the money I pay out for various blogging expenses. Some common examples of expenses I incur are my monthly hosting costs, office supplies (stamps, printer ink, envelopes, etc), blog design costs and advertising. I lump a lot under Advertising. For instance, when I self-sponsor a giveaway or pay money to join a group giveaway, I consider that to be an Advertising expense. Also, I use my cell phone almost 100% for my blog as I check my email, Twitter, Facebook, etc so I put my monthly cell phone bill in the spreadsheet as a direct expense. If you travel to a conference or a press trip, you would keep record of your out-of-pocket expenses in the Travel column. If you are sponsored, you would only claim the money you had to pay yourself that wasn’t covered by the sponsor.
In-Home Office Expense
I’m not sure how other countries work, but I know in Canada we can claim In-House Office as an expense. I work from home so I’m able to claim a portion of my home expenses (like home insurance, heating, power) on my tax return. However, I cannot claim the full amount and only a portion. The way I figure it out is to take the square feet of the room you use most to blog in and divide that by the total square footage of your home. Then take that percentage and multiply it by the total expense to get the business portion of your in-home office.
Figuring Out Your Expenses at Tax Time
The last sheet in my spreadsheet is for Year End Totals. This is the sheet that you input the totals of each category from each month to get your final year end totals to use on your tax return.
Keep Physical Copies
Do not throw away your receipts!! After you input them into your spreadsheet, put them in an envelope for safekeeping in case you are ever audited. They may want to see the original copies.
If You Buy a New Computer
If you buy a new computer or basically any asset over $200, you won’t be able to write off the entire amount. I know when I do my tax returns I can only write off a portion of it each year. Again, you will need to check on your local tax laws to see what the amount is where you live and what class (category) the asset falls under. I keep track of any big ticket items I buy under the Assets Purchased sheet.
Blogging Expenses Spreadsheet
I’ve created a Blogging Expenses Spreadsheet that you are welcome to make a copy of and use to keep track of your expenses. Just go to File and then Make a Copy and name it something that appropriate for you like YourBlogName 2012 Blogging Expenses.
How do you keep track of your blogging expenses?