Over the last two months in our Audit Proof Your Blog series, we discussed transforming your kitchen and organizing and planning. This week in the final post of the series by Angele Lafond, we cover tracking your income and expenses and getting ready for taxes!
You’ve organized your kitchen, planned your posts and expenses, and now it’s GO time. Some of you are living vicariously through your bloggy friends’ tax refresh and you’re looking for that last little boost of dynamite in the derrière to get you moving.
Relax. Breathe. You’ve got this.
Grab a coffee – or something stronger if that’s how you fly – and let’s dig in, shall we?
Revisiting the Planner
That awesome planner we talked about last month? It’s sorta-kinda time to take a second look at it. Don’t worry – you didn’t do anything wrong. But you will be referring to it as we move on to the last step of spring cleaning your blog finances.
Income & Expense Tracking – Simplified!
Using the diagram below as your guide, prepare a spreadsheet to track income, post expenses, and other business expenses. Your post expenses are from receipts attached to your planner. Other business expenses include hosting plans, cell phones, and more.
Tracking income is vital for tax accuracy – the last thing you need is penalties because you forgot to include something in your income. Visa cards, gift cards, coupons (total value), products received (average retail value), incidentals (ingredient reimbursements), specialty items (such as tableware, kitchen equipment, etc.), and the value of media trips received are ALL taxable income.
If you don’t know the value of an item (or flight, etc.) received, you can ask the brand to provide you with a letter indicating the total value received for X, Y, and Z. You can also do a quick Google search to get the information you need. Always print your findings as prices may change over time. If you get audited, you don’t want to be assessed for a value higher than what you actually received.
Visa cards, gift cards, coupons, products received, incidentals, specialty items, and the value of media trips received are ALL taxable income
A Note on Recipe Development & Testing
Testing, research, and development are valid business activities. In the ‘posts’ section of your weekly food blog planner add ‘Recipe A – Testing/Development’ to your list of posts. Include necessary ingredients and add missing items to your shopping list. The key is to have your R&D activities and related expenses recorded.
Taxes – Being Ready
Starting with 2013 tax returns, the CRA requires that you list all income-generating websites on your statement of business activities. You also need to know what percentage of your business income is from these sources.
My suggestion for tax software? Genutax. It’s FREE, it’s ugly, and it works. Providing you use the comprehensive interview and have all your tax documents, you couldn’t mess up if you tried!* Unlike other tax preparation software, once you’re done the interview you’re done your tax return. You’ll have to answer ‘No’ to a bunch of tax situations that don’t apply to you but trust me, it’s quick. A small price to pay to make sure you don’t miss the opportunity to claim important tax credits.
All the Oh Em Gees!
Can you believe we’re done? I’ve held your hand these past three months but I won’t let you sink. As always, be sure to tweet me your questions for live tax support or send me a private email. I can always be found @ShoeboxBeGone on Twitter and at Angele.Lafond on Facebook. And who knows, maybe I’ll see you at #FBC2015.
The Rest of the Audit Proof Your Food Blog Series
*I am not affiliated with Genutax. Also, tax returns are only as accurate as the information provided. These statements are my opinions of Genutax and not a guarantee of results.
Angele Lafond @shoeboxbegone is an award-winning accountant and the leading expert in blogging & taxes. She prides herself on speaking human and in her spare time (Ha!) blogs the funnies at DomestiqueManager.com. Her kids are her life, and she loves cooking up amazing dishes with cheeky names. She’ll try to convince you she’s Angelina Jolie’s secret twin – the jury’s still out. Angele wears many hats in a day: Chief Creator of Genius, Wife, Mother, Writer, Photographer, Public Speaker. Possibly addicted to coffee. Find her on Twitter and Facebook.
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Angele, I had a look at the Genutax website and their product seems to be only for PCs. What tax program do you recommend for Mac users?
Thanks for all the info. I’m curious why a media trip would be taxable income. If I think back to when I worked for the government, if I travelled for work it was paid for by my office and not taxable. It was a necessary part of my job.
So if I travel because of a blog post or article I am writing, and the company I am writing about pays my travel expenses, why is that taxable income?
many thanks!
Hi Nicole,
I’m not the accountant who wrote this post (or an accountant at all!) but yes, it is generally accepted that media trips, FAM trips or press trips must be accounted for when you do your taxes. In a lot of cases you receive the trip in place of payment for your work – so in essence, you are being paid with a free trip and that is viewed as income. In some cases, you may not even be required to write anything in exchange for the trip. it’s the same thing when you receive a free product for “review” on your blog. You may not view it as payment for that review but the CRA does. On the flip side, if you pay for your travel/expenses to attend a conference related to blogging, those are usually tax deductible. In any case, if you have accepted media or FAM trips, check with an accountant when you file your taxes. It’s much better to be safe rather than sorry if you face an audit a year or two down the road – especially when the evidence is on your blog!