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Now that we’re in a new financial year (at least, it is for Australians), it’s time to go through our blogging bills and see how much we spend on our blogs. Now I don’t make a lot of money on the blog but what I do make, most of it goes back into the blog. It’s just like any business isn’t it?
If you’re running your blog full-time and are blogging professionally, you have to take stock of all that you’ve spent on the blog for your annual tax returns, not just how much you’ve made. This doesn’t just include things like domain and webhost fees. It also includes part of your Internet bills, electricity bills, rent (e.g. you blog in your home office. That area can be tax-deductible), etc. I’m not a tax accountant so it’s best to have a chat with yours about it.
I went over my own bills (overhead fees aside) and found out that I do spend quite a lot on the blog on a yearly basis. Today I thought I’d share with you some of the fees I have to pay to keep Beautyholics Anonymous running.
- PicMonkey (US$4.99 per month, US$59.88 per year) – for online photo editing (the best I’ve found so far)
- Feedblitz (US$13.95 per month, US$167.40 per year) – for serving you blog post subscriptions via email
- Dropbox (AU$109.00 per year) – to keep all the important data
- Photobucket (US$24.68 per year) – to store all old images used on the blog. I’ve been transferring a lot of images over to my webhost so I’ll be retiring this by the end of the year
- Dollar Photo Club (US$99 per year) – for all the stock images you see on the blog.
- Domain via Godaddy (US$18.66 per year) – for the blog’s URL
- Webhost via Hostgator (US$119.40 per year) – for the blog’s webhost
- Hostgator CodeGuard (US$15.95 per year) – an automatic website backup solution
- Domain registration for .com.au, .net, .org, .org.au, etc (AU$34.88 per year) – all links to Beautyholics Anonymous that end with those will be redirected to this link.
- CoSchedule (US$10 per month, US$120 per year) – for my editorial calendar and scheduling of social media updates.
This is just for your information in the spirit of transparency and disclosure. The above doesn’t even include the blogging conferences I attend, premium WordPress themes and plugins for web design and all of the beauty products I buy to review on the blog. Ah I bet you’re asking if those are tax-deductible eh, those beauty products? I’ve spoken to two tax accountants about it and to date, I still can’t get a definitive answer. One said that as the products are vital for content creation for the website, I can claim some amount from them. The other accountant said that they’re not tax deductible as they’re, well, just beauty products. If you’re an accountant who deals with bloggers, can you please help shed some light in the matter?
I really would love to be able to claim something for that Tom Ford lipstick. 😉
Seriously though, make sure you keep all of your receipts for any item or service you’ve spent for the blog, to keep it running and for content creation. If you travel for events that you cover on your blog, keep a travel log as well. Whether or not any of these information will be useful for your accountant, at least you’ve got them covered. If the invoices are issued via PayPal, make sure you print all of them out for your accountant or if you’re sorting out the tax returns yourself.
Even if you’re not blogging full-time, it’s a good idea to take stock of all of your blog-related expenditure so that you know how much you spend on it on a monthly or yearly basis. If you do monetise your blog, it’s a good motivation to try to at least make enough money to cover any out-of-pocket costs for your blog.
Again, I’m not well-versed in tax returns so please check with your accountant (or like me, Google the crap out of it) for more information. Tax return season isn’t a fun one so let’s just bite the bullet and get it over with, eh? 🙂
Thanks for sharing and being transparent about your costs!! So freaking expensive to run blogs isn’t it? I’ve recently started looking at how to seriously monetise my blog as I am finding it so costly just to maintain it…le sigh. And don’t forget to factor in costs for travelling to events, business cards, photography equipment…and TIME – priceless I tell ya! But anyway, after all that, we still love to blog right? 🙂 xxx
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Time is the most expensive of all, I tell ya. Photography equipment … omg I forgot about that. And I’m thinking of adding better lighting too! Money going out, need more to come in. 😛
Hopefully in future when I make more than I do right now, I’ll share my income on the blog as well. Right now, it’s far too embarrassing to even tell you. 😛
Gosh Tine you do spend quite a bit! The bulk of my spending goes to the hosting which is very pricey, in high double digits monthly but I’m sticking to my host because he just does the job 🙂 One off costs include premium themes and plugins. But otherwise, the bulk of my blogging costs go to buying lots and lots of beauty crap and the most costly of all, time 😀
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Sigh I know right? It’s damn addictive too all these new tools and stuff. I must say though that they do make my life a lot easier especially CoSchedule. I was hoping not to like it so that I don’t have to blow another $120 a year but dammit I do. And that’s not even on top of the beauty crap I buy! Money going out, need more coming in! 😛
Thanks for mentioning CodeGuard from Hostgator, Tine. My backup plugin stopped working ages ago, and I’ve been winging it with the weekly backup from Hostgator. I will look into CodeGuard which I assume can be a daily backup? My biggest expense, by far, is purchasing makeup. My accountant did let me take a percentage (I think it was either 40 or 50%). Frankly, once I stop blogging some day in the future, I will not be spending anything like what I’m spending now on beauty products, lol
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Hi Allison, they don’t do a daily backup. They only backup your files if any change in your code is detected. Which makes sense because it takes up a lot of bandwidth and space to backup the same files over and over. I do my own database backup on a daily basis and a files backup every month but it’s good to not have all my eggs in one basket in case anything goes wrong on my end. I got the CodeGuard when they had either a 40 or 50% off I think?
I need to speak to an accountant who deals primarily with bloggers because every accountant I’ve spoken to so far told me different stories. One mentioned that products that were received for editorial consideration were considered income even though there’s no renumeration. This means I’ll be taxed on products that don’t make me money! I spoke to another accountant about this and he said that’s B.S. See what I mean? It’s so confusing!
Thanks Tine. This is great information for someone like me who is starting a blog soon x
No worries Grace. Don’t let this scare you though. A lot of bloggers don’t normally spend this much. I got a bit carried away with fancy tools, that’s all. 😛
Good luck in starting your blog. You’re going to love it! x
I was recently writing down all the things I spend for my blog and was a bit surprised at the money I’ve spent. I wouldn’t even consider myself a full time blogger. It is an increasingly costly hobby/job, especially if you want to do it properly and do it well! I am going to do a blog rehaul soon as well and there goes more money out the window but hopefully, in the long run, it will be a good investment not in terms of money (though that would be good) but in terms of friendships made, my sanity (I’m a work from home mum who lives in the country with no friends/family) plus I do use my writing as some form of a portfolio to get other jobs/projects. Interesting to see you lay out the costs by the way. Thanks for being so transparent!
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Hopefully in future when the income looks better (now, it’s just too measly to share), I’ll share that on the blog as well. Very few bloggers share what they make and how they make it on the Internet. Most are very hush hush. I get that but the ones that do disclose help bloggers like us.
Initial one-off investments like premium themes and premium plugins that make your website a whole lot better is worth the investment. 🙂
I spend more on my blog than I earn blogging which is currently – zero .. lol. Oh, well .. it’s a hobby that I’d like to turn into a business if I had time.
Monica.
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Haha we all do! That’s how every blogger starts out! I can’t even recall how much I spent (not just money but a whole lot of time) on my now-defunct personal blog that I insisted had no ads nor any form of monetisation. When I started this beauty blog, I didn’t have any ads either until a number of months down the road with Adsense making me 1 cent daily (if I was lucky. Most of the days, it’s $0.00). Fun times. 😛
Hi Tine! I don’t have a blog but I did run a website a while ago for my portfolio that I still pay hosting for but um… don’t update currently. Thinking of doing a proper update when the current term expires and switching to something a bit more affordable. Any reason in particular why you use Hostgator? Is it cheaper / convenient to use?
Hi Emily, I was using Lunarpages for the first couple of years before I switched to Hostgator almost 2 years ago. The first one was more expensive and the tech support was lousy. I went on Hostgator on the recommendations of a few bloggers I know and once I got on it, I know why they liked it so much. Their 24/7 tech support is fantastic. Previously, I was dealing with tech support only via email and because they were based in the US and me in Australia, many times it took hours before I heard back from them (which is weird because from the emails, it kinda looked like their tech support was in India). With Hostgator’s 24/7 tech support, I was able to reach them and have them work with me at any time. Sure the wait times can be about 30-45 mins long if they’re experiencing heavy traffic but most of the time, I only had to wait 5-15 mins before I was able to chat to someone about my tech problems. They’re not expensive either. I took the Baby plan as I needed to work on unlimited domains with clients as well but if you’re just planning on using one domain (at least for one year), then the Hatchling plan is sufficient.
Thanks Tine! That’s really helpful. I’ll definitely check that out when it’s time to move 🙂
One of the problems with any professional is we tend to get all worried that we know *nothing* and they know *everything* about that subject – a really good example that I have lots of first hand (and second and third hand) knowledge and experience of is migration agents. So many just talk completely out of their bottoms when it comes to Visas to Australia for teachers – the vast majority I have found seriously know NOTHING AT ALL about the specifics for teachers, but because they are qualified and registered, most people accept everything they say. I’m not saying I know more about migration than a migration agent, but I *do* know more about teacher qualifications and registration etc for teachers in Australia, and that has a big impact on visa regulations for teachers, which because those agents don’t know anything about the teacher side of thing, they give completely false information to people. Its the same with accountants – just because they are qualified in Australian Tax Accountancy, it doesn’t mean they know jack all about lots of bits of what is a *hugely* wide area.
It sounds like you have been given some very dodgy advise there Tine about what you can and can’t claim for – the Australian Tax rules are really quite simple imho – having studied a fair bit of accountancy in the UK, and my father being an accountant I have a bit of background there (ok, its a different country, but not a million miles apart in tax systems and tbh the UK system is more confusing for your everyday person in my experience and imho), and for straightforward cases (ie most ‘normal’ people lol), the rules are really simple here.
Remember people – accountants (and anyone else for that matter) are only human – they *don’t* know it all, but will bluff their way that they do sometime, because we have a culture that lets them, even encourages it! Question everything! 😛
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I once attended a Google Hangouts where the host interviewed a tax accountant who deals specially with bloggers. While most of what she said made sense, there was one thing which I can’t wrap my head around and that’s the items are are sent to us for editorial consideration. She said they’re considered something along the lines of non-monetary compensation (can’t recall the exact term right now), which means that the items I receive for review are considered taxable income. I don’t understand why. It’s not income when it’s not money! Is it? I barely studied accountancy (only scraped past in school) so I’m stumped. Surely I cannot be taxed for a bottle of shampoo! I checked with my tax accountant about this and he was like, HAHAHA NO. Then again, he deals mostly with medical professionals (husband goes to him), not bloggers so I’m not sure. Oh I sure am questioning everything but I’m not getting any answers which is really annoying. I’m going to have to ask other bloggers to recommend their tax accountants for me to check out because I need a definitive answer.