Get ready for a great give-a-way, but not before a teaching moment. Last month, at Arkansas Women Bloggers Unplugged, I had the honor of speaking on Business Best Practices, an interesting series of questions arose… What if I am getting items to test, review, talk about on my blog? Is that income, and how do I keep track of it?
Well, bloggers, there is an answer, but of course, not a simple one.
- Is your blog a business or a hobby? A general rule of thumb to use when considering whether you have a hobby or a business – Is the activity continuous or regular and are you making the effort to pursue business and make a profit? The IRS suggests that you consider several factors, and you can find that list here. This is important because it determines where and how you report income, and what expenses you are allowed to deduct.
- Products given to you are most likely income. Many times companies can woo us in to trying their product and blogging about it because we get free stuff. Lots of these products are things we need and/or enjoy personally. Regardless, of whether you are in business for profit or fun, the income may be yours, and the responsibility falls on you, the tax payer. In some cases, these companies may give you a 1099 to show the income, but not all.
- How you use the product could be a determining factor. Here is where the waters get muddy. If the product you are given is used for strictly business purposes, you may not need to claim the income. However, if you the product you are given is used for personal reasons too, it is income. For example, you are given a set of lipsticks to try out and review, and then disposed of, you do not have income. However, if you continue to use those same lipsticks daily for personal use, the fair market value of the lipsticks are considered income to you.
- Record keeping for products received. For tax preparation purposes you will want to keep track of the fair market value product received and used for personal use. The fair market value is the price that product would sell on the open market. A simple spreadsheet of what the product is, fair market value and what you did with it should be enough for your CPA or tax preparer to make a determination on whether products should be considered income or not.
So, speaking of income, Country Outfitter gave me these Justin Deercrow Boots to review. I never owned a pair of cowboy books, and quite honestly, didn’t anticipate I ever would. I will say three things about my boots:
- Comfortable – As an on-the-go business woman, I can’t be slowed down by aching, torn up feet.
- Stylish – So cute with a fun sun dress or my Sunday outfit – a Steeler jersey and skinny jeans.
- Fun & Practical – I do plan to attend a rodeo, not in flip flops.
Now for the fun part, Country Outfitter is giving you a chance to win a $150 gift certificate to go shopping on them! You could pick these practical Justin Deercrow boots or something completely different. We are making it so simple for you to enter in just two little steps.
- Click here & submit your email address to Country Outfitter (you may receive occasional emails from them).
- Leave a comment here on the blog letting me know you submitted your email to Country Outfitter.
*IMPORTANT: To be considered for the giveaway a participant MUST enter his or her email via the link on your post.
A random winner will be selected in one week (October 5, 2012) after 9:00 pm EST.