Legal and Tax Aspects of Professional Blogging
Today’s video answers a question submitted by Alex Miller. He asks:
I was wondering if you could shed some light on some legal and tax issues with blogging. I know it varies by location, but is a business license needed? What are the tax reporting requirements? Employment requirements vs. independent contractor requirements, etc.? Thanks.
Necessary, Cover-My-Ass Statement: I am not a lawyer or accountant. My advice here is stated from the perspective of an average dude. In other words, if you follow anything I say and get screwed by the IRS, it isn’t my fault. Kapeesh? 
In short, blogging for money involves no special legal or tax concerns aside from those faced by any other person or blogger.
Most bloggers start out as sole proprietors. This is, by far, the simplest way to do it. Your only concern will be tracking your income and expenses and paying taxes at the end of the year. I recommend using something like Quicken to track income you make by blogging and categorize it separately from other income so that it can be tracked separately. Likewise, categorize and track any expenses related to your blogging business (domains, hosting, etc) separately as these can be deducted later.
As your business evolves, you may decide to form an LLC or corporation. My company name is PC Media, Inc. and I am set up as an S-corporation. This means that all income is paid to my company – not me. After all expenses, net income is paid to me and reported to the IRS on my yearly 1040 tax return. When you form a company, it needs to be treated as a separate legal entity and that means your accounting needs to be separated from your personal accounting. For this reason, I track all my business transactions in Quickbooks and all my personal accounting in Quicken.
There are no licenses required to blog for money. The only requirement is, as said, to pay taxes on the money you make.
As for employment versus independent contractor, this is only a concern if you hire others. I have one employee and, to be honest, it is a pain in the butt. Not him (he’s fine), but the tax crap is not fun. So, my recommendation is to go independent contractor whenever you can. Just take my advice on that one. 
Legally, it depends on your degree of control. If the person you hire works in your office and you control the work environment, then generally he/she is an employee. Otherwise, I’m pretty certain you can use the contractor arrangement and spare yourself the tax hell.
If you would like to offer any advice or counter anything I said (I’m not an expert on this stuff), please comment.
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I'm David Risley. I've been making my living as a blogger for over a decade. Blogging is my business and how I support my family. With this blog, I'm just gettin' REAL and telling you how this business works. 
