Friday, November 30, 2007

Fasten Your Seat Belts, Tax Season is Coming!

As the 2007 tax season fast approaches, we are preparing at the office for the influx of work to begin on the 2nd of January 2008. We currently spend our days doing bookkeeping for our client base, and brushing up on the newest TaxWise software program. We are also getting things ready for our annual meeting with our satellite offices here at the office.

It's been educational this past month, what with working on client's books, preparing payroll, learning Spanish, and divvying up supplies for the satellite offices. What we are all looking forward to now is the onset of the season. I am told it is a hectic six to eight weeks, working 12 - 14 hour days, all in an attempt to assist as many of our current tax clients and as many new clients as is possible with filing their tax returns.

I won't lie. All of this will be a bit overwhelming if it hits all at once. So, I plan on fastening my seat belt and preparing for the fast and furious ride!


Drew said...

Are you going to be using your blogger for hire status to get some tax deductions? I think I'm going to have to set up something to get deductions for my blogging.

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goldengoddess said...

Hi Drew,

As I understand it, for those of us who blog for additional income to our existing full time business or employment, we can report the earnings in one of two ways.

One way is that you consider your blogging income as a hobby. If you do that, then all you do is report the income on the front of the 1040 under Other Income, and then deduct any expenses against that income on the Schedule A. Just remember all deductions on the Schedule A are subject to 2% of your AGI (Adjusted Gross Income) and you cannot deduct more than you made in your hobby.

The other way is to consider your blogging income as business and file a Schedule C for business income and deductions. A professional tax consultant can advise you better as to the actual expenses you can deduct for a business as a blogger. If you are a full time blogger it would be in your best interest to talk to someone to find out exactly what you can claim as deductions.

Remember that even if you do not receive a 1099-Misc form from the companies you do work for, you still need to report your earnings. As advertising businesses they report that information to the IRS.

I found it interesting that there are people out there that report their hobby income as business income and then deduct their expenses to the degree that they end up reporting a loss. In other words, they reduce their taxable income by "sinking" their money into a hobby.

Who wouldn't want to have the pleasure of reducing your taxable income with a loss in one's hobby?