Blogging has turned into a legitimate form of income for people around the world. In post-pandemic India, for instance, it’s a way of socializing safely and making money without leaving the house.
Whether you’re freelancing as a side gig or using blogging as your sole income, you’re going to have to deal with taxes eventually. These tips will help you navigate through the confusion of taxation so you can be prepared when it’s time to deal with the government.
Taxation for Bloggers and Freelancers
Before you start worrying about taxes, compare your earnings with the taxable limit. Most bloggers earn their money through affiliate sales, services they offer, and advertisements. This income is considered “revenue,” and is subject to taxation.
However, if the amount you’ve earned in an annual period doesn’t reach the tax threshold, you don’t have to pay taxes. Currently, this is set at less than 20 lakh. Total up your income earned, and if it’s less than that amount, you don’t have to pay taxes on it.
On the other hand, if your revenue is greater than 20 lakh, you’re required to have a GST registration and to file a return every month. This can be a headache, but it’s easier to do if you use TDS payments.
Requirements for People With More Than One Income
Some bloggers are successful enough that it’s their only source of income. Others have two or more income streams. In those situations, the amount of tax you’ll have to pay is based on the total income earned through all sources.
To find your taxable amount, take the total revenue you have been paid throughout the year (or month, if you’re filing monthly). Subtract the expenses and depreciation as appropriate for your deductions.
The amount left is what you’re expected to pay taxes on. The Tax Slab Rates vary and are set by the government.
Deductions for Bloggers
Digital employment makes up a significant portion of the country’s workforce. Because of this, the government had to revamp the categories of deductions to be applicable to jobs like blogging.
As a blogger, you can deduct anything that was paid as overhead in order for you to earn your income. For example, blogging deductions include:
- The website’s domain and all expenses incurred for hosting and designing it
- Your home or office rent
- Utilities, such as electricity, internet, phone, and water
- Any salary of freelance payments you made to others as part of your blogging
- Fuel used to travel anywhere as part of the job
Deductions are a great way to meet and greet new and potential clients. You can take them out for a meal at a reputable restaurant, pay for everything, and write it off as a business expense.
It’s crucial for you to stay on top of your income tax payments. Late fees accrue daily, and penalties for not filing or paying can be severe.
Talk to an accountant to find out the best ways for you to make your taxes more manageable. As a blogger, you can earn a decent living, but you do have to pay taxes on anything over the tax threshold.