Fix The Tax Code Friday: Standard Deduction for Self-Employed

2007 September 28
tags: , , , ,
by Kelly

On Problogger yesterday, a few folks commented that the list of potential deductions for bloggers (one of many groups of self-employed persons) was too long or too complicated.

Which made me think. It also leads me to today’s Fix the Tax Code Friday question:

Should there be a separate Standard Deduction alternative for self-employed persons? It could function just like the existing deduction, but calculated at a higher rate for those persons filing a Schedule C. Or there could be some other criteria. Thoughts?

from → individual, small or home-based business, tax policy

No Comments leave one →
2007 September 28
Jeff B

Hello a new reader of your blog from ProBlogger. One problem I have is knowing what things go into what tax-deduction category. Like paper clips, domain hosting, software things like that. I is there a place that list these types of things?

I find the IRS forms don’t cover it all as ususal.

Thanks

Jeff B
http://www.fam5.com

2007 September 28
Kelly

If you’re filing a Schedule C (meaning that you’re treating blogging as a business), then you could take the deductions there at Part II. Otherwise, if you’re treating it as a hobby, you would include the income as “other income” and then you would include the deductions as Miscellaneous income at Schedule A (in 2006, it was line 22).

The stinky part is that you can only claim the deductions at Schedule A if you itemize - and even then, there are limitations. If you’re serious about your blogging, consider treating it as a business.

For more info on the hobby/business distinction visit http://www.taxgirl.com/ask-the-taxgirl-deductions/

2007 September 28
Mary Emma Allen

This is interesting to ponder on, Kelly. It can get rather complicated the way it exists.

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2007 September 30
FC

Hi, just stumbled upon your site. Nice advice. I am planning on starting a blog that will show food, nightclubs, and concert reviews. I plan to make the money advertising on the site. Now, since I will be a critic (I also plan to recruit my friends to become subcontractors), will I be able to deduct the food, as well as transportation to the restaurants? Same with the concerts, will I be able to deduct concert fees, like the ticket and parking? And lastly, this looks more like a hobby because I have a full time corporate job and because I can go to limited venues and restaurants per week. Will I be considered going into a for-profit business based on the fact that I am truly planning on making money through advertising via pay-per-click ads?
Thanks,
FC

2007 September 30
Tax Geek

No.

Anyone capable of receiving self-employment income should be capable of tracking their expenses related to that income.

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