For today's edition of Blog Biz, we're going to talk about something that bloggers don't want to talk about—taxes. This is true! When I started blogging in 2006, I never thought it would become an income-generating hobby. I'm sure people who created blogs before 2010 also think that way. But when 2010 happened, people started to notice blogs and bloggers and the massive influence they have and that you can monetize said influence. So lots of people started blogging in the hopes of making it a career.
So if you're one of those bloggers who set out blogging because you wanted to make money from this platform then you have no excuse not to pay taxes!!!
First, blogging and being an influencer is such a PUBLIC business. The very nature of it is you telling everyone who follows you—whether they number in the thousands or the millions—that you're making money from social media posts. There is no way you can hide from the BIR and no way you can deny you're making money.
You're not like one of those word-of-mouth businesses, yung all your customers are your community. Or like those businesses that sell online like eBay and Etsy where you can hide behind seller names. With blogging and social media, you're forever trumpeting to the world that you're earning from this activity. Therefore, you have to be super transparent about everything. At least, that's what I believe.
By the way, this is not a sponsored post from the BIR. I wish! I'm only doing this because I get questions from fellow bloggers and freelance workers about paying taxes because apparently, I'm the only blogger they know who pays taxes (say it ain't so!). So I asked my friends over at Pinnacle Sources to help me out with this post.
Pinnacle Sources is an international business consultancy firm. They help register businesses, help you pay your taxes, help with your books and accounting needs. Thanks so much, Pinnacle!!! Especially you, Lynn, for being so patient with me every time I'm whining about my business!
For someone like me, a sole proprietor who doesn't have staff, assistance like this is necessary. A working mama never has the time to line up at DTI, barangay hall, mayor's office, BIR, etc! So everywhere I can find help, I get it. Even when it comes to writing blog posts!
Yes, for today's post on taxes for bloggers, I talked to Ruby Gestiada, the Finance Director of Pinnacle Sources. I asked her the questions I've been getting from my fellow bloggers and attendees of my workshops. Thanks so much, Ruby, for taking the time out of your busy schedule to give me and my readers such comprehensive answers.
So here's my interview with Ruby. And then I added my own comments on some of the questions because gusto kong mag-share ng experience ko. Read and learn!
So if you're one of those bloggers who set out blogging because you wanted to make money from this platform then you have no excuse not to pay taxes!!!
First, blogging and being an influencer is such a PUBLIC business. The very nature of it is you telling everyone who follows you—whether they number in the thousands or the millions—that you're making money from social media posts. There is no way you can hide from the BIR and no way you can deny you're making money.
You're not like one of those word-of-mouth businesses, yung all your customers are your community. Or like those businesses that sell online like eBay and Etsy where you can hide behind seller names. With blogging and social media, you're forever trumpeting to the world that you're earning from this activity. Therefore, you have to be super transparent about everything. At least, that's what I believe.
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| I do my own bookkeeping. It's the tax-paying I outsource. |
By the way, this is not a sponsored post from the BIR. I wish! I'm only doing this because I get questions from fellow bloggers and freelance workers about paying taxes because apparently, I'm the only blogger they know who pays taxes (say it ain't so!). So I asked my friends over at Pinnacle Sources to help me out with this post.
Pinnacle Sources is an international business consultancy firm. They help register businesses, help you pay your taxes, help with your books and accounting needs. Thanks so much, Pinnacle!!! Especially you, Lynn, for being so patient with me every time I'm whining about my business!
For someone like me, a sole proprietor who doesn't have staff, assistance like this is necessary. A working mama never has the time to line up at DTI, barangay hall, mayor's office, BIR, etc! So everywhere I can find help, I get it. Even when it comes to writing blog posts!
Yes, for today's post on taxes for bloggers, I talked to Ruby Gestiada, the Finance Director of Pinnacle Sources. I asked her the questions I've been getting from my fellow bloggers and attendees of my workshops. Thanks so much, Ruby, for taking the time out of your busy schedule to give me and my readers such comprehensive answers.
So here's my interview with Ruby. And then I added my own comments on some of the questions because gusto kong mag-share ng experience ko. Read and learn!
Why should bloggers turn their blogs into a BIR-certified business?
Ruby: The major reason a blogger should legitimize their blogs and be recognized by the Bureau of Revenue (BIR) is that almost all well-known clients and companies that might possibly work with them will most likely want that they have official receipts and know that they’re registered. Aside from that, having your blog recognized by Law as a business signifies credibility and assurance to your potential clients that you are legit and existing.
Me: I turned mine into a business because of three reasons:
(1) Big brands ask for receipts. If I wanted to level up my collaborations and sponsorships, I need to be a real business. There was this mom blogger who had a much bigger following than me ask me, "Why are you always getting campaigns when my blog's stats are higher?" (Yes, this happened!) And I replied, "Because I have receipts. It's hard for businesses to justify big expenses—like an influencer fee—without receipts."
(2) I needed tax documents when I apply for visas.
(3) I was scared the BIR will sniff me out when they see I have so many sponsored posts and no BIR records.
When do I know my blog should be turned into a business? How much should I be earning?
Not all bloggers have the same level of success and earnings; with this in mind of course some individuals will most likely consider certain things before pushing through with the registration of their blog. For example the cost of registration which will send them back by P15,000.00-P20,000.00, not to mention the monthly overhead of having an accountant which is roughly another P3,000-5,000/per accountant per month.
So for the answer of how to know if your blog should be turned to a business should depend on how steady your blog/s generate income, and for how much a blogger should be earning just make sure you can cover the monthly cost and that you are actually earning something that equals or exceeds your effort.
Should bloggers register as professionals or sole proprietors?
If one would like to register as a professional they will be required to have a PRC ID. If in case they don’t have, then they will have to register as a sole proprietor and will be required to have their business permit.
If a blogger registers as a sole proprietor, what kind of business is blogging?
Well, now that social media have boomed without showing any signs of slowing down and that a very special niche was discovered, add in the fact that blogging has established a very strong presence in the communications industry, we think that one can actually register their business as “Blogging”.
How do I register my blog as a business?
First, an individual would have to check with the Department of Trade and Industry (DTI) if their desired name for their business is available. Next comes the securing of business permits and clearances from City Hall. Lastly, registration, filling, and payment of Docs Stamp Tax “if applicable” and Registration of Books, Filling Authorization and Printing of receipts in the Bureau of Revenue (BIR).
Me: Finance blogger Fitz Villafuerte said you should register your first business yourself so you know how to do it. I didn't listen. Instead, I hired someone I actually don't know to make lakad the whole thing. Big mistake. Basta I won't go into details. Basta ang takeaway ko is if you want someone else to do the registration for you, hire professionals.
Me: Finance blogger Fitz Villafuerte said you should register your first business yourself so you know how to do it. I didn't listen. Instead, I hired someone I actually don't know to make lakad the whole thing. Big mistake. Basta I won't go into details. Basta ang takeaway ko is if you want someone else to do the registration for you, hire professionals.
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| Hire professionals! They won't let you down! |
Can I use my blog name as my business name?
Ruby: Yes, as long as the name is acceptable and available in Department of Trade and Industry’s (DTI) system.
Me: I wasn't allowed. That's why my business name is my full name. It's so looooong! My former accountant said all the "Topaz" word combinations were bought by some entity. For the record, I do not believe this.
I work from home. Does my residence qualify as a workplace?
Yes, but The Bureau of Revenue (BIR) will require a lease contract if you’re renting and also an authorization from the owner of the property or a letter that they are allowing you to use your address as business address. If not, they will ask for the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) if you own the property.
What taxes should I pay? What exemptions can I get? My blog is not a big business yet.
There are two types of taxes they need to pay: first is the "Sales Tax" which is either non-VAT amounting to 3% (Percentage Tax) or VAT which is 12%. The 12%VAT can be passed on to your customer by charging them the additional 12%. For example, your service is P100.00 but you will charge them an additional P12.00 for VAT. Second is "Income Tax" which amounts from 5%-32% depending on your net income for the year.
The only exemptions you will get is when you have a child/ children. Up to four children is allowed and will be granted P25,000.00 income tax exemption.
Lastly, regardless of how big or how small a business is, you still have to register it. Once your business is registered, you will be required to pay the right amount of taxes.
Me: I have three kids. That's P75,000 deducted agad! There's also personal exemption of P50,000.
Me: I have three kids. That's P75,000 deducted agad! There's also personal exemption of P50,000.
Should I get an accountant? What exactly can they do for me that I can't do? I'm scared their service is expensive. I don't earn every month!
Honestly speaking it’s a big yes because there are several tax fillings that some individuals cannot comprehend and might find very intimidating. Having the service of an experienced accountant that is familiar with that field saves you not only the hassle but also all the stress and headache that comes with it.
Plus, it’s really not that expensive to get an accountant because the charges and fees depend on the volume of work they will do for them. Our accounting service can start as low as P3,000.00/month and you’re actually paying not just one professional but the expertise of a whole accounting team.
We can help SME entrepreneurs like bloggers to build their business by handling and organizing their taxes and accounting. We know how busy a blogger can be and by getting our service you will have more time to focus on what you like to do, which is blogging. With our help, building your business will be easy and convenient. By managing your monthly overhead expenses, we can accurately know how much you’re really earning per month and per year. As for the payment, no worries you can actually pay quarterly.
Me: You should totally get an accountant. Unless you're great with accounting yourself!
So there, dear bloggers and freelance friends! Thanks so much again to Ruby Gestiada of Pinnacle Sources for answering my Q&A. For your business and accounting needs, contact them. Highly recommended! So professional! So reliable!
Me: You should totally get an accountant. Unless you're great with accounting yourself!
So there, dear bloggers and freelance friends! Thanks so much again to Ruby Gestiada of Pinnacle Sources for answering my Q&A. For your business and accounting needs, contact them. Highly recommended! So professional! So reliable!
Website: http://www.pinnaclesources.com/
Address: 32/F BPI-Philam Bldg, Ayala Ave., Makati
Email: ask@pinnaclesources.com
Great tip out there Frances! I'm still thinking about getting my business permit for my other blog since 2015. But I'm just waiting for the right time when things can be done pretty more seamless compared to the processes way back. Maybe this year's the time ;)
ReplyDeleteFrances! I signed up with Pinnacle after I saw your blog post. They've been treating me very well ���� Thank you for letting us know about this! sobrang helpful. I have checks that I haven't been able to collect and assignments I didn't get because of lack of OR. Here's to turning all of that around ❤️
ReplyDeleteI pay my taxes voluntary and I also hired an accountant to do it for me (she's the one who suggested it din kasi). She just asked for a copy of BIR Form 2306 from the companies I worked with. Unfortunately, if voluntary walang DTI permit, receipt etc.
ReplyDelete