As much as we like to think business is all about serving others and doing what we love, money plays a large role in our success. As a blogger or freelancer, you’re a business owner. You need to treat your blog or freelancing services as their very own business, even if you’re only a one-man or one-woman show.
One of the biggest struggles bloggers and freelancers have when it comes to money is expenses. Do you know what counts as business expenses? What should you prioritize and what can you do without? It’s a tricky landscape to figure out on your own, especially if you don’t have any existing business experience. Here are 5 business expenses bloggers and freelancers should not forget.
1. Cash Expenses
It’s easy to keep track of your financial expenses when they’re going through your credit or debit card. All business owners, including bloggers and freelancers, should have their own business credit card. This makes it simple to know exactly when you’re spending money on your business.
However, those cash expenses easily get lost in the fray. If you’re making payments in cash, you need a way to keep track of this money leaving your business. Whether you’re just using an old-fashioned spreadsheet or an advanced money management system, you can’t forget about your cash expenses.
2. Health Expenses
As a blogger or freelancer, you’re on the hook for your own health insurance. While most people get their insurance through an employer, you’re your own employer in this situation. Health insurance is simply not optional in this day and age. Because you never know what’s around the corner, you need to protect your health with a plan through either a private marketplace or the federal healthcare marketplace.
The good news is you can deduct your health insurance premiums to reduce your federal and state income tax. In order to be eligible for this deduction, you need to be self-employed and earning a net profit on your income. Be sure to learn how to find a health insurance plan that’s right for you.
3. Tracking Mileage
Are you driving to and from events, client meetings, and other business travel requirements? We don’t usually think about those miles spent driving to things as bloggers and freelancers, but they sure do add up quickly. This is one of the most commonly missed deductions during tax season, so make sure you’re keeping track of this expense. You can use an app like MileIQ to track all of your travel expenses.
If you’re working from home or in your own office, you’re likely paying for utilities. This can be tricky if you work out of a home office and you don’t use your internet, for example, only for business expenses. Does that mean these don’t count as expenses for your business?
In short, no. You can still track your utility expenses as a blogger or freelancer even if you use your utilities for “personal” time as well. The best way to do this is to monitor just how much of your time is spent on “business activities.” From there, you can create a percentage to apply this towards your utility expenses.
5. Meals and Drinks
Finally, you can actually consider meals and drinks as business expenses in some circumstances. Now, this doesn’t mean you can count off all of your meals out as a business expense, but it does give you some flexibility when it comes to client or brand meals.
As a blogger or freelancer, you might host clients, brands, influencers, or other professionals for a meal or other expense. You can deduct 50% of these total costs for tax purposes, but you do need to provide documentation supporting that these expenses were, in fact, part of business activity.
Keep Track of Your Expenses
Your money is your responsibility. If you want to treat your blog or freelancing services as a bonafide business, it’s up to you to track your expenses accurately. This does take a bit of time to master, especially if you’re not used to tracking expenses.
Make sure you aren’t leaving money unaccounted for. These are some of the most easy to forget expenses that are related to your business. Have you left any off of your last income and expenses statement?