Over the past two months, I’ve jumped into the new darling of marketing: social networking. My personal plan (right now) is to post regularly throughout the day on Twitter. It automatically updates my Facebook account, where I can get comments and have conversations on various things I post.
I mix up my posts: some personal, some inspirational, some helpful business & tax tips and some reminders of seminars and the like. My struggle is writing something coherent in 140 characters or less. And that includes spaces!
The real trick, though, is how to monetize the mini-blogs on Twitter. In fact, that’s the big question for much online presences. How can I make money off of this?
And that’s where the secret is – once you TRY to make money off of your forum, blog or Twitter mini-blog, you have a business. And if you have a business, you have deductions. Stay with me, because this is where it gets fun.
Deductions mean less taxable income. Less taxable income means less tax. And for many, that can mean immediate cash in your pocket. How? If you’re currently working, reduce the amount of tax that is held out of your check.
There are 9 factors that the IRS is looking for before you can claim that you have a business. If you’re not making money, can you show that you are TRYING to make money? If something isn’t working, do you change it? Do you have advisors that have experience? Do you have experience in other businesses? Do you have a reasonable expectation that you are creating something you will later sell? And, most importantly, are you running it LIKE a business – accounting, record keeping, regular financial statements? This is an important test to pass, because once you do you will be able to take deductions.
To be deductible, an expense must be ordinary and reasonable for the business. For example if you put up a regular blog website and talk about your favorite places to visit and stay in France, you have an interesting site. But now add in some affiliate marketing pieces that have the potential to make you some money, and you have a business.
If you have a business, your fact finding trips to France are deductible, the money you spend on French cooking classes are probably deductible too and certainly your French language classes will be deductible.
Then put up a mini-blog like Twitter and start talking about little tips about travel to France. (Make sure you have ads for hotels, restaurants, tours and travel agencies that are all related to France.)
You have turned a personal expense into a business expense! That means less tax starting today. You have now successfully monetized your online presence. It’s the ultimate bail-out plan and you get to decide how much and when you get your money.