Unless you have a background in business, you’re probably feeling a little lost (like I did!) in the beginning when figuring out how to set up your blogging business. There is a lot more to it than just starting a blog or Instagram and sharing clothes, especially as it grows. But you need to get your ducks in a row to avoid the IRS knocking at your door, honestly one of my biggest fears, lol.
Disclaimer: I am in no way a business, tax, or legal expert. This is just what I did for my business as advised by professionals, and I always recommend protecting your business with a trusted professional. This post is just to outline some of the steps you may need to research and ask about when setting up your business, and it doesn’t serve to be an inclusive checklist for your business.
If you’re also researching how to start a blog, I have more info on the steps you need to take for that here!
How to Set Up Your Influencer Business
What’s the first thing I should do when getting started?
The first thing I did was apply for an EIN so I didn’t have to use my SSN on W9 forms when sending it to brands. You can do this directly through the IRS website and they have more information on how to do this.
How does it work getting paid as a blogger?
This can vary per brand and how they set up payments, but usually, after the collaboration, I send over an invoice that details the payment, my email and contact information, date, and payment deadline as outlined in the contract. If it’s the first time working with them, I’ll also send a W9 form, which you can find on the IRS website if the company didn’t send you one to fill out. Brands will either pay you directly through a bank transfer, mail a check, or through a payment system such as Paypal or bill.com. Then by the end of January the following year, they will send you a 10-99 if needed for tax purposes.
Affiliate payments work very differently and are paid out months later to account for returns, based on a window set between the brand and the affiliate company, which is usually 3-4 months on average. Usually, there is a $100 minimum for your first payment, so initially, it takes a few months to see your first payment.
There are many other ways to make income through blogging, but these are the main ones I’m familiar with.
How do you track collaboration payments?
I use a google spreadsheet to track all my collaborations, but I’m sure there are easier, more automated systems to use if you deal with late payments often. Luckily, I haven’t had to deal with that, but I hear that can be common. I like to write down the payment agreed on, date invoiced, and confirm it’s been paid on the spreadsheet. I also track my current follower count at the time of the collaboration to gauge my growth and increase my rate as necessary.
Do I need to worry about contracts in the beginning?
Absolutely. I wouldn’t work with anyone without a contract outlining both party’s expectations and payment terms. Communication is key, and a contract helps make things crystal clear on the expectations. If the brand doesn’t provide one, I would provide one myself, which has only happened maybe 1-2 times.
That means in the beginning you need to familiarize yourself with reading contracts. They can be very dry and boring, but it’s important to go through them and make sure you’re comfortable agreeing to everything in there. In my course, The Profitable Influencer, my friend Ashlee who is an attorney for creatives, has some helpful tips on reading and understanding contracts!
What can you write off as a blogger?
I’m going to keep it very short and sweet here because legally I can’t answer this – I’m not going to be held liable for your tax fraud, lol. I think there is a lot of gray area when it comes to taxes, especially when you’re self-employed, because from what I’ve learned it seems to depend on who you ask.
Some accountants will say you can write off clothes, but the vast majority I’ve heard from who work closely in the industry say you can’t because you can use them in your personal life. I personally write off more conservatively to not draw any attention to my business from the IRS. Do I agree with it? No, I think taxes need to evolve as industries evolve and blogging wasn’t something commonly around 20 years ago. But I’d rather be safe than sorry.
But essentially, I write off anything that has to do directly with my business. My office space, phone, internet, blogging equipment, subscriptions to software such as Lightroom, storage, shipping charges, office supplies, professional and legal services (accountant, lawyer, trademark, etc), collaboration expenses, blog hosting and design, contractors, business travel, etc. I also track my miles with an app as a deduction, to give you multiple examples.
I break down everything I use for my blogging business in this post, if you’re curious!
How do taxes work as a blogger?
This depends on how your business is set up, but the general way it works is you need to track your income and expenses and set aside money to pay your taxes. Usually, this is anywhere from 30-50% to be safe. My business is taxed as an S-Corp and I pay both quarterly payroll taxes, quarterly business taxes, and personal income taxes…it’s fun times!
I use Quickbooks to track all of this and I go in monthly to categorize expenses and reconcile my bank accounts. I would highly recommend getting a separate business checking, savings, and credit card to make this as easy as possible to track. In order to open a business account, you do need to have a legally recognized business. If you don’t have one just yet, just have a separate card you use to make things easier for you until you can get a business account.
When do I need to legalize my blogging business?
I blogged for a few years without making any income because it was strictly a hobby (more on that here). Blogging as a business can be a weird transition because for a lot of people you may have started it as a hobby, but it eventually may grow into a business. So you have to make that decision when it’s a hobby vs a business. Whereas, someone starting a business will do all of this ahead of time because they aren’t treating it like a hobby in the beginning. This is one of the common mistakes I see from newer influencers because they’re stuck in the hobby phase and not moving towards becoming a business.
Legally, you need to track any income you generate for your personal taxes, but once you decide to come a business and plan to continue growing in the years to come, it’s time to make things official to protect not only yourself but also your business. Starting a business takes a risk because you need to initially invest in it like any other business, so there are upfront costs to form an LLC (usually just a couple hundred dollars depending on your state).
Usually, you start as a Sole Proprietorship (such as a contractor), but until you establish a legal business entity such as an LLC or corporation, you can be personally held liable if your business is ever sued… meaning your home, savings, and personal assets aren’t protected.
Also, check with your state regulations to see if you need any licenses to operate a business in your state. Definitely do your research here and talk to a professional to determine the risk/benefit for what your legal entity should be.
Do I need to trademark my name?
I didn’t trademark Strawberry Chic until 2020, after 7 years of using it as my business name. I wasn’t sure if I was going to stick with this name long term, but once I decided I wanted to own it I hired a trademark lawyer to get the process started. There was also a boutique I came across that used my blog name, and some of y’all even asked if I started a boutique. I wasn’t about to have her trademark it first. I still need to figure out that situation…
Anyways, it’s not something you have to do immediately, but it does protect your business name as it grows. You don’t want your business to blow up one day and not actually own the name of your business. But if you’re just getting started don’t even stress over this!
These are the most common questions I’ve received about the legal side of starting an influencer business, but if you have any other questions about blogging, let me know in the comments!
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