I’m sure many of you knew about the recent big news in the blogging community.
Several bloggers have received a letter from IRAS and was surprised by the clause that states that non monetary benefits, including sponsored products, food tasting sessions, sponsored trips etc are taxable!
Here’s my take on this issue as a new tax payer, a blogger with a full time job and also a freelance MUA. (This year is my second time filing tax and I’m pretty familiar with some of the terms since I did a lot of reading when I was filing my taxes last year.)
Yes. Bloggers should file whatever income($$) they earn via their blogs regardless in the form of banner ads or advertorials.
In fact, regardless of what are you working as, you should file all sources of income on top of the one from your full time job. When you are filing taxes, it’s actually all listed there. Main income, side income etc.
The issue here is that non monetary benefits are taxable too. Sponsored products, trips, and even food tasting! To be honest, the food tasting one is too ridiculous!
Before bloggers, Journalists have been attending media events, media launches, food tasting, receiving products for reviews etc. Are they being taxed for those? Are because that’s under their main job scope so they don’t have to file separately?
Bloggers taxed, means that the government is recognizing it as a profession. So why we do have to file these benefits separately when it’s part of the job?
Why We Should Not Be Taxed On Non Monetary Benefits?
Most bloggers started blogging due to passion and drive. We blog because we want to share. Personally, I started beauty blogging because I love beauty and also wanted to share my journey of handling acne issues. It began as a platform to share and soon, marketers realized that blogs is a good alternative to be sending their products for reviews as compared to magazines and mainstream media. So began the trend of blogger events, media invites to bloggers, sending products to review etc. Blogs were seen as a good alternative to market products and services. Then come the companies whom gathered groups of more prominent bloggers and started to promote bloggers to companies. And slowly, the whole blogging scene started to monetized.
For a blogger like me, any monetary income is a bonus. I enjoy receiving products for reviews because there’s only so much I can buy and I like to try and share new stuff. Often, you will be more educated about the product you received for review as these information will be provided in the form of a press release. To be honest, my skin have suffered from all the product testing throughout my 8 years of beauty blogging. I put in time and effort, and the health of my skin to review these sponsored products for the masses. The particular product might not be even suitable for my skin! Why do I have to pay tax for these? In that case, I rather spend that money in buying products that are of my liking and products that I know are suitable for my skin.
And what about those products that we received, tried but didn’t write about it as it is not to our liking? There’s no service rendered for these products, so by right there’s no transaction. So these should not be taxed right?
Regardless of the opinions of bloggers, I’m pretty sure IRAS is not going to change their mind any time soon. Which brings me to my next point.
How Do We Go About Tracking the Values These Non Monetary Benefits?
Are companies and brands going to be providing invoices and documents to aid us in filing our taxes? How do we know the market value if we are not provided of such information? For example, sponsored trips. Food tasting wise, if the portions served are not the standard portions served to paying customers, how do we value the meal?
I believe that restaurants and cafes that often invite bloggers for food tasting will be affected most. Now that it’s taxable, most bloggers would probably just reject such invites. Rather pay and blog about my own meals than having to note down how much was that food tasting for tax filing.
Products wise is not too difficult since most of the time we are provided with the retail prices. Just that we must go through the hassle of keeping track of the items received and their values. Not too much of a hassle for me since I have very little sponsorship these days. What to do, am a small time blogger here. 😛
I can actually foresee 3 kinds of situations occurring:
- Bloggers/influencers being more selective and rejecting sponsorship, especially food tasting. This will highly affect the marketers with low budget.
- Bloggers/influencers asking for monetary reimbursement in return for the product reviews/ food tasting etc. Back to point 1, those companies with no budget can no longer ride on free reviews in return for the products/meal. (Additional legit reason for bloggers to get compensated properly for our efforts. We have to pay tax also!)
- In any community, there are bound to have black sheep! Expect mask ads/ reviews stating that they actually bought the product when they are actually sponsored.
Basic Facts on Filing Taxes
- You have to file taxes as long as your gross annual income is above $20,000. Regardless if you received the letter or SMS from IRAS.
- All sources of income should be filed. Taking myself for an example, I have to include my gross income from my full time job, any income from my freelancing and any $$ income from the blog.
- The first $20,000 of your income is not taxable. For an example, if your income is $30,000, the taxable income is $10,000. And the rate for this $10,000 is 2% which is $200. Refer to this link for the tax rate.
- There’s something called tax reliefs. Donating to charity, having kids etc, contributing to CPF are all eligible for tax reliefs! Refer to the whole list of tax reliefs available! Tax reliefs can lower your taxable income by a significant amount.
In a nutshell,
Unless you are a big time blogger earning thousands of dollars for a single post, getting your house renovations/ weddings etc sponsored. You probably don’t have to worry too much on the tax that you have to pay because that amount will most probably be quite little? Let’s all be a good citizen and file our taxes.