We could argue that almost all popular websites these days are blogs in one form or another. The term “blog” has expanded way past it’s original meaning and now encompasses just about any website that is updated from time to time.
That being said, there are definitely some differences in the types of blogs that people use to make money. To make money with a blog you need visitors or readers or, as the nerds like to say, “traffic”. Whatever you want to call them, you’ll need people to visit your site. How you go about pulling in that traffic, the types of visitors you get and even the amount of money you make are all directly or indirectly tied to the type of blog you’re running for money. All of the blog types below (and any gradients in between) have the ability to make lots and lots of money in with the right circumstances.
Generally speaking, there are three characteristics which describe the overall features of a money-making blog: frequency of updates, breadth of topic and the type of audience you’re writing for. If you need a real-world example, think of magazines. There are thousands of different magazines available these days and they’re all radically different in how many times a year they publish, what they cover and the “voice” they use to speak to their readers. Here are the details of how these three factors work together:
Frequency of Updates
Frequently Updated Blogs: When you think of “big money making blogs” this is probably the category that most fall into. Think about blogs like The Huffington Post, Boing Boing, TechCrunch or even PerezHilton.com. These sites have multiple updates in a single day, though their content is very different. You don’t have to have many updates all day long to be successful. Some very popular sites update only once or twice a day while one of the most successful (and silliest) blogs out there – icanhascheezburger.com – only updates three or four times a day on average.
Frequently updated blogs can contain original content or links to content from other sources or, in many cases, a little of both. Often updated blogs highlight content and links from other sources and add their own commentary or unique take on the information. With frequently updated blogs the comments to each post are sometimes just as important as the post itself. In many cases the discussion and comments under each post end up expanding on the original post’s content, giving different opinions and analytical views and drawing in more readers and comments than it might otherwise.
While these blogs may start out getting a lot of their traffic from search engines, they build up a following of regular readers over time. Regular readers tend to become “ad blind” and won’t generally click on the same ads after they’ve been seen over and over again.
Rarely Updated Blogs: Some blogs simply don’t have to be updated very often. Some are updated once or twice a month, some much less. Some are essentially static sites with information that rarely changes (say, for instance, a site about trip that happened several years ago). The site might still be relevant and may list some great places to visit, but the trip is over and the blog has not been updated.
Likewise, some blogs are about facts or truths that don’t change very much or don’t try to cover news. A blog about carpentry and building bookcases may list several methods and give detailed instructions on how to build bookcases, but there are no new saws being invented and the basics of cutting and putting together wood are relatively unchanging.
 Different types of blogs are like different types of magazines. Breadth of Topic
General Topic Blogs: These blogs may or may not be updated very frequently, but they always revolve around “large” topics such as food, technology, cars, politics or other topics. There are literally an infinite number of topics or areas of interest a general topic blog could be about. They can update many times a day or just a day or two a week or even less.
General topic blogs can contain a lot of categories to help organize posts by more specific interests. For example, a cooking blog might have several categories for recipes by meal type, other categories for rating and reviewing kitchen gadgets and tools and even more categories for cookbooks or cooking shows.
Niche Topic Blogs: Blogs with a much smaller focus may only cover one aspect of a general topic blog. So if there’s a general topic blog about food, then there might be a niche blog just about desserts or even just chocolate desserts. While niche blogs can be popular with enthusiasts and can build up quite a following, many are designed to not necessarily build an audience but rather to pull in traffic from search engines with individual posts.
To see this in action, you can go to Google and search for something like “vegan chocolate recipe” and you’ll end up seeing several blogs (some large, some small) all about chocolate recipes that are also vegan. Some of the blogs in the results are vegan niche blogs while others are chocolate niche blogs.
Type of Audience
Personal/Partial Blogs: Personal blogs are generally written for people to read in their spare time. They can be “fluff” blogs, but they can also be very informative, explaining how to do things or imparting information that may not commonly be known. Most personal blogs are a little mix of everything, from talking about that great dinner to offering solutions to computer problems to reviewing local restaurants or products found online. Personal blogs can have a large private readership made up of online friends, other bloggers and acquaintances and they may also get a lot of traffic from search engines, depending upon their content.
Professional/Impartial Blogs: These are blogs that are written by or for companies or they are intended to sell you something or give you professional advice outside of personal recommendations. The difference between personal and professional blogs can be subtle and the line is growing more and more convoluted every day.
To illustrate the difference, think about a post about a certain type of new car. A personal blog would subjectively give you information about the car and tell you outright if it’s good, fun, cool, etc. A professional blog might strive to be more balanced without making any direct judgements about how “cool” it really is.
Again, the distinction between the two types is not always clear. Professional media outlets are trying to become more “personal” and personal media outlets are producing content that’s as good as professional outlets in some cases now.
Some blogs, of course, are simply made for “people” and don’t try to impart any real wisdom or information that’s particularly useful. Humorous blogs and blogs that are meant strictly for entertainment could be considered personal blogs, though the type of audience doesn’t really matter for these types.
So to put this all together, you can rate a blog on it’s update frequency, it’s topic and it’s audience. So a blog like Boing Boing could be described as a frequently updated blog that highlight content from other sites and mixes in some of it’s own for a mixed audience of people looking for entertainment and information. If, however, you decide to start a blog about luxury bathrooms then your blog might be updated less frequently, contain niche information about bathroom remodeling and generally be a professional blog which presents people with all the different types of options that are available.
Just as you should pay taxes on blogging income at the end of the year, you may have to also pay estimated taxes if you’re making enough money from your blogs. Essentially, estimated tax payments are a way to give the government money on untaxed income during the year so that you don’t end up owing a large chunk of cash when the year is over. It’s not just a good idea to do if you’re making money from your blogs, but it might be required by law.
“Should I Pay Estimated Taxes?”
The biggest question about paying estimated income tax is who needs to do it and who doesn’t. Everyone’s tax situation is different, but there are some general guidelines you can follow if you’re making money from blogging. The government wants you to always be current in paying your taxes throughout the year. That’s why most regular job have tax money taken right out of your paycheck. The government gets money all year round that way and it makes it a little less painful for people who work.
Generally, you will need to pay estimated taxes if your withholding (the amount of money taken out of your paycheck for taxes) won’t cover 90% of the taxes you owe for the current year. That sounds complex, but it’s not that bad. When I’m working with estimated taxes I like to use the 30% rule.
Let’s say you work a regular day job. Each year you get about a $2,000 tax refund. That means you are overpaying the government $2,000 each year with your withholding amount. And, for our purposes, you’re going to assume that you’re paying about 30% of your income to taxes. Remember, it’s just an estimate and it makes the math pretty easy.
So if you made $10,000 for the year from blogging, what would you owe in taxes? You’d take $10,000 and multiply it by .30 (that’s 30%) and you come up with $3,000. That’s how much you owe the government for your blogging income (again, it’s an estimate). But wait! You’re already overpaying the government $2,000 from your paycheck. So let’s do the math: $3,000 in money you owe on blogging income – $2,000 you already paid through your paycheck withholding = $1,000 you owe the government
Another way to look at it is like this: If you normally get a $2,000 tax refund with your current job and paycheck options, then you can make ($2,000 * 3 = $6,000) extra from blogging and probably still end up with owing no money and getting no refund at the end of the year.
If you think you’ll owe less than $1,000 at the end of the year then the government will generally not penalize you. If, however, you end up owing several thousand dollars and you never paid any estimated taxes then you’ve clearly not planned correctly.
The bottom line is this: if you made enough money last year to lessen your tax refund significantly then you may want to start paying estimated taxes in the current year. Since most blogs become more popular over time and with more posts, it’s quite likely that you will be required to pay estimated taxes for this year.
“When Are Estimated Taxes Due?”
April 15th, June 15th, September 15th and January 15th of the next year. On those days you’ll want to pay estimated tax on the money you’ve been paid up to that point. You can generally look at the income you were paid (not earned) during the previous three months:
April 15th – Pay estimated taxes on the money you were paid in January, February and March.
June 15th – Pay estimated taxes on the money you were paid in April, May and early-June.
September 15th – Pay estimated taxes on the money you were paid in late June, July, August and early-September.
January 15th – Pay estimated taxes on the money you were paid in late-September, October, November and December.
The exact dates might change slightly from one year to the next based on when they fall during the week.
Remember how blogging income usually works: if you earn the money through clicks or selling products in May then you probably won’t be paid that money until the end of June. So you’ll want to be paying taxes on the money your ad vendors have paid you, not what they still owe you.
“How Much Estimated Tax Should You Pay?”
Again, it’s hard to be exact about how much estimate tax you should pay because everyone’s tax situation is different. You may want to simply stick with that 30% rule (or increase it or decrease it according to your situation) and send in that amount of money.
So if you were paid $10,000 in January, February and March then you’ll probably want to send the United States Treasury a check or money order for $3,000 or so before April 15th.
Don’t forget state taxes as well. States vary widely in how they tax, but most states that collect income tax seem to look for anywhere between 1% – 3% in total tax funds. You may also have to think about city and other local taxes, depending upon where you live and work. Fun, huh?
“How Do I Pay Estimated Taxes?”
There are actually a number of ways you can pay your estimated taxes.
You can download form 1040-ES (pdf) which has all the instructions as well as the four estimated tax vouchers included. You simply fill out some very basic information about who you are and how much you’re sending in and you’re set. You don’t have to tell them what blogs you run or how you made the money or anything. You just send in a check or money order and you’re done. The instructions list the exact address to send your estimated taxes to, depending upon what state you live in.
The IRS will also take a credit card, though you will end up paying a percent fee on the charge. Again, you can find the instructions in the 1040-ES instructions.
You can also pay your estimated taxes online! The Electronic Federal Tax Payment System (EFTPS) is a government website which allows you to pay your estimated taxes through electronic transfer. You just give them a checking or savings account and the funds will be withdrawn according to your specifications. You do need to wait about seven days when you’re setting it up initially, so plan accordingly.
Yes, paying estimated taxes is a necessary evil. You have to do it four times a year and it’s no fun paying taxes like that, but it’s also a sign of success: if you’re making enough money to pay estimated taxes on your blogging income then you’re well on your way to becoming a full-time professional blogger and writer!
I am not a tax expert, accountant or even a financial professional. I’m a guy who makes money by writing and blogging online. You’ll want to consult with a tax professional or accountant before taking any financial actions and you can find out all the nitty gritty details about estimated taxes right from the IRS Estimate Tax page.
There are entire books written about how to make Google’s search engine like your web site or blog or web pages more than someone else’s web site or blog or web pages. I could set up an expensive pay-for-entry website which revealed this information to you in a series of month-long video lessons. I could build-up the tension with technical jargon and professional blogger mumbo-jumbo about the ultimate “secret” to making Google like you and your pages. I could show you dozens of suspicious video testimonials about how knowing this secret made people millionaires.
 If people aren’t finding your pages with search engines it could be because your content sucks. But I’m not. You know why? Because there is no secret.
So how do you get your website listed in Google?
Create good content.
Done. End of post. Move along now, there’s nothing to see here!
What? You want more?! Would you be willing to spend $49.95 to find out more about what makes Google’s search engine like your site? How about $499.95?! Eh, put your dirty money away. Really, it’s filthy. I’ll explain how Google operates for FREE. Here goes…
Google is like a television network. In fact, I’d argue that some of Google’s largest competitors are companies like NBC, CBS, ABC and even FOX. None of those companies have a search engine and none of those companies have particularly magical websites. But what they do have is this: eyeballs.
Let’s first understand how Google makes money. When you go to Google and search for something like “video game controllers for your dog” you aren’t really paying anything. It’s totally free for you to do that. The same is true when you sit your butt down on the couch to watch The Simpsons on Sunday night. They’re free, too. Fox Television doesn’t charge you to watch their shows. But they still make money.
So we have to now answer the question: How Does Google Make Money?
When Google gives you answers to your dog-related video game controller search it also shows you a bunch of video game and dog related advertisements. That’s the key. Amidst all the stuff on that page someone, somewhere, is paying Google to show ads to you. And, if one of those advertisements from Puppy PlayStation World catches your eye and you click on it, then voila, Google just made some money. See, the guys at Puppy PlayStation World agreed to pay Google 50 cents for every click they send to their website. You clicked the ad (it was free to you) and the advertiser paid Google.
If you repeat that process a billion times a day you essentially have Google’s business-model. The more people search for things online, the more people see advertisements, the more people click on those advertisements.
Fox Television does something similar, but not exact. They give you The Simpsons for free, but they shove in commercials (advertisements) during the show. Companies pay Fox Television to show their advertisements while people are sitting on the couch. The more popular the show, the more it costs to run a commercial during that show because there are more people watching. They gauge the size of the audience with a number of tools, but that Nielson’s Rating system is one of them.
Still with me?
Google and Fox Television essentially make more money by having more people watch or use them. Their services are free, but companies are willing to pay Google and Fox money to have their product advertised to their audiences. They are in competition with each other because, hey, if I’m watching The Simpsons then I’m probably not search for PlayStation products for my Poodle or Wii accessories for my Weimaraner.
Now back to our original question: How do you get listed in Google?
Google wants one thing and one thing only: good content. Just as Fox Television wants good television shows so that people will watch them, Google wants web pages that answer the questions people ask.
But what’s good content? Good content is content that other people want to read. If your site isn’t getting any traffic from Google then it means one of two things: either no one is searching for your content (directly or indirectly) or so many other people have the same or similar content that your site just isn’t popular.
Here’s a silly example: Let’s say you wrote a blog post about the homemade soup you had for lunch the other day. You may not get much traffic to your post from Google because of the following reasons:
1. No one cares for (or is searching for) what you had for lunch.
2. There are already a billion other posts about people eating soup for lunch.
3. Your post is total gibberish. Google hates gibberish.
Now, maybe your post IS getting a lot of traffic from Google. Here’s why it could have been popular:
1. You’re a famous celebrity who is trying to lose weight, but you were spotted in public pigging out on soup.
2. The soup ate is a new type of soup and not many people have written about it before but three days before it was mentioned on Oprah.
3. You gave a lot of details about the soup, including the recipe, where you got the ingredients and all sorts of variations to the soup. Google likes detail.
What does all this mean for you and your blog or website? It means that if you want your writing to be listed in Google’s search results then you have to write good content that other people actually want or need to read. Your content can answer a question or tell a story or explain how to do something. And, obviously, the more content you write or generate the better. More content means you answer more questions which means you’ll show up in more search results which means you’ll have more visiting coming to your site. Simple, huh?
If it’s unique and good and useful, then don’t worry… People will find your content and thank you for it. And so will Google.
You can get out of debt and be rich by going to Carnegie Hall.
And how do you get to Carnegie Hall?
Practice, practice, practice!
Yes, it’s an old, bad (even bad for me) joke. But let me explain.
Have you ever met someone who is really good at something? Maybe that person was great at basketball or could play the piano really well or maybe it was a really important skill like being a l33t player who can pwn n00bs in Halo 3. Whatever the skill, you know that to get to the truly professional level that person has to practice and his or her chosen profession every single day.
Yes, every single day. Your chose profession or talent has to become a sort of habit which you can’t skip or avoid for even a single day. For most of us, that’s how we got into so much debt: we weren’t good with managing our money. In other words: we didn’t practice smart saving, smarter spending and proper resource management.
 Spend ten minutes each day balancing your accounts and tracking your finances.
I had a cousin who started playing the piano when he was five. He got pretty good to the point where his parents thought he could probably make a life of it. So by the time he was 12 he was practicing piano for at least a few hours every day. And, I mean, every…single…day. When they would go on vacation you know what they would do? They would only go to hotels that had a piano they could rent for a couple hours a day (presumably in the hotel lobby or bar) and even on vacation the kid would practice. Lots of fun, right?
I have no idea what happened to him, but I do know that he played a lot of piano and he was probably better than 90% of the other piano players out there. Sure, he probably hates his parents and has an unnatural fear of hotel bars, but otherwise I’m sure he’s doing fine.
I’m not advocating your examining your checkbook for three hours every day. That’s a special kind of crazy. But I do think you should know your approximate net worth on any given day.
To become wealthy and get out of debt you need to know where you are with your finances, you need to remind yourself where you’re going and you need to keep on top of your spending and earning before they get ahead of you. And you need to remind yourself…every single day.
This about it this way: when you drive to work you have a specific goal in mind: getting to work. You may not consciously think about this, but every second of that drive is spent with you constantly correcting your car’s course so that you get to your destination. If you took your hands off the wheel and floored the pedal (or if you own certain Toyota products) you’d veer off the road and hit a tree in the first five minutes of your ride. Instead, though, you constantly turn your car in one direction or the other, apply the brakes, weave in and out of traffic, give people behind you the bird and generally drive like a maniac. And you get to your destination because you constantly know where you are (“Not at work yet”) until you actually reach your destination (“At work now”).
You need to do the same thing with your finances and your entire financial future: Pick a destination and then spend every single day practicing getting to your goal by correcting your spending and earning (changing spending habits alone won’t get you out of debt, sorry) to reach your goal.
How do you do this? Spend ten minutes each day balancing your checkbook, looking over your bills and just generally keeping track of where you are. That’s it. Pretty simple. I’m a big advocate of using software to track finances. I think programs like Quicken or You Need A Budget Pro are both excellent programs because they actually make the whole process of entering finances and balancing your checkbook kind of fun. They automatically calculate your balance, they generate a ton of different reports, and they both do a lot of financial analysis that most people never do themselves.
I happen to be a Quicken man, myself. And I prefer boxer briefs. Oh, sorry… you didn’t ask that. Every evening for the past ten years I’ve made a point of taking a few minutes (sometimes just a few seconds!) to enter all my spending and earnings for the day into Quicken. I update some of my investment data and I generally look things over, trying to figure out where I’m going and what I can do to improve things. When I get my paycheck or my blogging income deposit I rejoice. When I get the credit card statement after Christmas I cry.
Essentially, I practice my personal finances by looking them over every night and learning what is working and what is not. By entering and examining the numbers each day I’m much more aware of “bad” and “good” spending and I’m more sensitive to where I spend my money because I know I’m going to have to account for it in my financial checkbook that night.
And as G.I. Joe always told me as a child, “Knowing is half the battle…” The other half of the battle, of course, is having cool laser guns and hovercrafts.
It’s income tax season in the United States again where people across the country go through piles of paper and receipts from the previous year trying to figure out how much they owe or will get back from the government before the April 15th deadline. If you’re new to blogging or if you’ve been doing it for a while and just started to make some money with online ads then you may be asking yourself the question that most bloggers do when they first start receiving payments of more than a few dollars. Here are the basic questions and answers you’ll come up against:
 “Do I have to pay taxes on my blogging income?”
The answer is a resounding yes! In fact, you most likely have to pay more income taxes on your blogging earnings than you might normally pay through a regular job. In most full-time jobs your employer takes taxes and other deductions out of your gross pay and the paycheck you end up getting is your “net” pay after all the deductions have been taken out. Most advertising services (like Adsense, Chitika, Amazon Affiliations, Commission Junction and others) “hire” you as a sort of independent contractors. This means they do not take anything out of your paychecks, which means it’s ultimately up to you to make sure you pay the government your fair sure of taxes on the money you earned. For tax purposes you are your own business and you’ll need to pay taxes on the money you make.
“How much money do I have to make from my blog before I have to start paying taxes on it?”
Technically, you really should be reporting any money you make from your blogs on your income taxes. A lot of people throw around $400 or $600 as the “magic” amount of money you can make before putting it on your taxes, but that technically isn’t correct. Companies do not have to issue you a 1099 form unless they pay you $600 or more, but that doesn’t mean you shouldn’t report it. If you make $100 from 20 different vendors then you really should list all 20 vendors and those $100 payments on your income taxes and then, yes, pay taxes on that $2,000 income.
“What tax forms will I need if I’m a paid blogger?”
Again, most of the larger online advertising companies will treat you as an independent contractor and will send you 1099-MISC forms if your income reaches that $600 threshhold. To record your blogging income you’ll fill out Form 1040 Schedule C (Profit or Loss from a Business) which will ask you to tally your 1099 forms and then list any sort of business expenses (more on that in a moment). You may also need to fill out Schedule SE (Self-Employment Tax).
“What kind of business is blogging? What is my business code?”
When you fill out your 1040 Schedule C line B asks you for a business description and business code. The IRS does not yet have a business code exclusively for blogging, but for the income tax purposes I always choose business code 711510, which is for “Independent artists, writers and performers.” Most bloggers are really freelance writers who happen to publish their words on a computer screen instead of a magazine.
“What deductions can I count as a blogger?”
Ahh, the eternal question about deductions for a home business. I have a disclaimer at the end of this post because I’m not a tax professional and any information you find here should not be used without consulting a tax professional. I can, however, tell you what I do. Home office expenses have come under scrutiny by the IRS for the past several years, so I usually go pretty conservatively on the home office expenses.
Some people advise you to deduct every pen, paper clip and stamp you use for your home office, but if push came to shove I’m not sure if I could easily prove that everything in my office is used entirely for business purposes. And, for me, blogging is a great business because I generally don’t have many expenses. Two expenses I always count are the hosting fees I pay and the money I put towards buying and renewing my domain names. I put all of that under line 8 – Advertising. I also use a couple of online services which are only used for blogging, so I count the money I spend on those as well. Though some bloggers do this, I do not try to deduct computer equipment, home-printed letterhead, telephone lines or internet access fees like my cable bill. I just think that trying to prove that I only use those things for business might be a tough call. I also have other people in my home which use my home office, so I can’t in good faith say that anything on my desk is actually used only for business all year long.
“Should I pay quarterly taxes? How do I calculate estimated taxes?”
That largely depends upon how much money you are making and whether you are already paying some taxes through other paychecks you might be receiving from a full-time employer. The IRS doesn’t particularly want independent contractors like yourself to simply make piles of money throughout the year and just pay them in one big lump sum. If you start making decent money with blogging, then you will want to consider paying estimated taxes on a quarterly basis (April 15th, June 15th, September 15th and January 15th). Remember: as a paid writer or professional blogger you are still a business. You very well could have to pay estimated taxes on your blogging income. You can pay your estimated taxes by either sending in a check with Form 1040ES every quarter or you can visit the Electronic Federal Tax Payment System (EFTPS) website and pay online.
The easiest way to calculate your estimated taxes is to simply take the money you received each month and set aside a certain percentage of it for tax purposes. You can earmark it and stash it in an internet savings account so that you at least get a little bit of interest off the money before you pay it out. Individual tax situations will vary, but I usually set aside about 30% of my gross income to give to pay in for estimated quarterly taxes.
Feeling a little overwhelmed?
Really, consider going to a tax professional if you’re unsure (especially for the first year or two) or try a tax software program like Turbo Tax. It’s really easy to use (trust me, I’m an English major) and works pretty well. This year’s Turbo Tax has plenty of explanations as well as a support forum. I personally use Turbo Tax Home and Business edition, though I could probably get away with a lower version.
Yes, it’s a little bit expensive, but it’s much cheaper than going to one of those chain tax preparation places. I used one of those tax services years ago and ended up paying several hundred dollars just to have the guy sit at a desk and, essentially, use a piece of tax software just like Turbo Tax and ask me questions. Ever since that time I’ve simply bought the software myself so I could take my time with the questions and do it over a series of a few nights while keeping a couple hundred bucks in my own pocket!
Most importantly, try not to get too bummed out if you find yourself owing money on your taxes for the first time due to your increased blogging income. That tells you you’ve basically earned too much money from your blogs, which is a heck of a good “problem” to have!
Disclaimer: I am not a tax professional. At all. This article is written for informational purposes and general advice, and you should are ultimately responsible for your own taxes and if you follow the information in this article without consulting a tax professional then you do so at your own risk. Neither this blog or I am responsible when the IRS agents come crashing through your window at 3AM in the morning threatening you with loaded staplers while screaming, “Did you really think you could deduct those 1,300 bags of Cheetos you ate last year while tapping away at your orange smudged keyboard, BloggerBoy?!? Huh? DID YOU?!?”
If you still aren’t convinced that you should really speak to a tax professional instead of me, then you might want to check out my other income tax advice article.
Next Page »
|
