|Late night tax work. Don't be too jealous.|
Say you got $6,000 of 1099 income from the blog. You would put that on your Schedule C and you would be able to deduct all of the expense for the blog; computer expenses, home office space, phone, rent, camera, etc. NOW, it gets tricky because unless you can prove that your computer/home office/electricity/phone is used solely for blogging, you can't take 100% of all those expenses.
FOR EXAMPLE: Say your house is 2,000sq ft and your office is 250sq ft, you could deduct 250/2,000 of the electricity. Say your electric bill is $2,400 for the whole year. you would then take 2,400 x .125 = $300 of deductible electricity. The .125 (or 12.5%) comes from 250/2,000. This is assuming your office is used SOLELY for blogging.
Turbo Tax will (or it should) prompt you to fill out form 8829, Expenses for Business Use. The numbers should populate...I am not familiar with Turbo Tax, so I am not sure if they automatically will. Just follow the form...
I think in Turbo Tax you will put in your total utilities, phone bill, etc. and then put in your total square footage and your home office square footage and it will automatically take 12.5% (250/2,000) of all your expenses that you enter. If your home office is only used part of the time for blogging, then that is where is can get tricky.
You can deduct the 250sq ft as home office deduction if it is used only for blogging. If your office is used 50% of the time for blogging and 50% of the time for the kiddos homework, then 50% of the square footage of the office is deductible. If you use the internet 30% of the time for blogging and the rest for video games, playing, surfing, then 30% of the internet bill each month is deductible. Does that makes sense? If you bought a new lens for your camera, that is deductible in the year you bought it. If you bought new computer software that is solely used for blogging, that is deductible.
See how it can be tricky?! Ahhh! If you ever did get audited, you would have to prove that 30% of your internet is used for blogging, etc. HONESTY and documentation are key.