One question many bloggers have about what they do is how to label what they do. Am I a blogger? Am I a graphic designer who just happens to blog? Am I a travel expert? etc. Normally, it is nothing more than a bothersome dilemma that occurs when one is developing their elevator pitch. That is until you’re filling out your tax return and the IRS presents you with that empty box requesting a business activity code. WHAT???
Heads up, folks! The information provided here is based on my own professional experiences. While I do my own accounting, I am not YOUR accountant. I hope this post helps you or sheds light on the topic, but please be sure to check with your own accountant.
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What Exactly Is a Business Activity Code?
A business activity code is just a six-digit number that is assigned to the correct job title for all businesses. It lets the IRS accurately identify what is that you do.
So, if you are new to blogging or you plan to become a professional blogger, you may have come across this question. If you haven’t yet come across it, don’t worry. You will.
As you go to complete your tax returns this question will come up. The good news is, you will be prepared with the answer because you have read this post!
Where Does the Business Activity Code Go?
The business activity code will be requested on the Schedule C form for sole proprietors and single-member LLCs. For multi-member LLCs, it goes on form 1065, and for S-Corps, it goes on form 1120-S.
If you have someone doing your taxes for you, they should know what code to assign to you. However, it is a good idea to know this for yourself just to make sure that they get it right.
After all, blogging and freelance work related to blogging is often difficult for even a blogger to categorize. With it being a newer industry, don’t be surprised if your tax consultant is confused, too.
Where Can I Find My Activity Code?
All business codes are derived from the North American Industry Classification System. They have a website that provides the ability to do searches. It also provides detailed descriptions of the jobs that fall under each category.
The IRS also has a shorter condensed version located at the bottom of the Schedule C instructions page.
However, finding a code is generally not the confusing part. What may trip you up is trying to deciphering what title to choose because – big surprise here – Blogging is not a category!
That’s right. If you try searching for bloggers or blogging, you will never find your code. The same thing goes for Podcaster, Youtuber, Influencer, or many of the other forms of jargon that we use in everyday speech.
So, before you get started, you will need to use some proper technical terms to locate your code. But, I am going to help you out with that right now.
If the list of choices and information provided by the IRS doesn’t clarify things for you, You can go right to the source of categories for more details through the NAICS site.
How Will I Know Which Business Activity Code to Use?
The IRS says that you should choose the job activity that best describes what you do. But for a blogger or freelance, you probably do many different activities. This can be confusing.
So, pay close attention to those last five words – best describes what you do. Just ask yourself what your core activity is.
For example, if you are a photographer first and foremost, (i.e you earn most of your money from your services as a photographer) but you just happen to have a blog, you are a photographer.
Understanding the correct technical term for what you do is also very important. It is also where most of us get lost with finding our codes.
Sometimes what you do may not be easy to define or it may be that your job encompasses a long list of activities. Remember that in most cases, you are trying to identify your industry.
You are not necessarily trying to provide a job title. Thinking in terms of the industry will often make the search go a lot quicker.
For instance, there is no such thing as a Podcaster within the industry codes. You must think in technical and professional terms.
Podcasting is actually broadcasting. All video and/or radio messaging is in the broadcasting industry.
Why Do the IRS and NAICS Have Different Business Activity Codes for Me?
You may notice a bit of a difference between the codes listed on the NAICS and the IRS’ condensed list. You can use the IRS codes if you like.
If you can’t find a code that fits what you do on Schedule C instruction, you can do a search within the NAICS site.
They offer the addition of detailed descriptions as well as examples of other businesses using those codes. For example, the Huffington Post uses the same code for internet publishing that I use.
Since the IRS list isn’t as extensive, you may find that the codes are slightly different. For example, the internet publishing code provided by the IRS is 519100. But the NAICS assign the code 519130.
I use the latter. But either is fine. The IRS recognizes both. One is just more precise than the other.
The IRS lumps all 5191XX codes together for convenience. (publishing, broadcasting, news syndicates, libraries, etc.) Where the NAICS breaks these down even further.
How Do I Begin a Search
All activity codes are categorized by a number file system that begins with a general category (the first two digits). Then, the general category is broken down into more specific areas (the middle two and last two digits of the number).
For example, all real estate type activities begin with 53. From there, the category further breaks down into lessors (5311), offices (5312), and other related activities (5313).
These more specific categories are then separated into further subcategories. As you can see, lessors (5311) are can be either residential (531110), non-residential (531120), and so on.
Searching By Topic/Code
With that in mind, you would begin a search by starting with the most general category for your activity. The NAICS site makes this easy by offering a list of these topics.
Clicking a topic will take you to a list of all the categories and codes that fall under those beginning digits. If you click on the full-length category/code, it will provide you with a list of activities that qualify as that industry label.
If you do not see what you do on that final list, then you should keep looking.
Searching By Keyword
If you are still lost after looking through the list of general topics, you can do a search by keyword. From the top of the NAICS site, enter a word that you feel describes what you do.
It will return a list of categories that it thinks you should consider. However, if you do not have an accurate idea of what words describe your business, it will often return results that have no correlation to you.
Typing in the keyword ETSY returns no results. Typing in ETSY STORES returns a long list of both bricks and mortar types stores, as well as electronic stores and others. This could end up confusing you.
Which Business Activity Code Should I Use?
I really wish I could just tell you, but only you know what you do. However, I can offer you the industry categories and codes that I use as a blogger and have used for other related type businesses.
These may give you a quick answer. Keep in mind that these may or may not apply to you. It just depends on your specific income/activity source.
You should always follow up with a search of your own or by contacting whoever handles your returns.
What if I am a Blogger
Like most bloggers, if your core activity is blogging/podcasting/youtube, then you are an internet publisher. It doesn’t matter that you also decorate, or create recipes, or travel, or whatever. The core of your work resides in publishing those activities.
That word (publisher) is important. As of today, there is no sub-category for bloggers. So, don’t use it as a keyword. It won’t return a result.
You may include it in the description on Line A of schedule C if you feel it better relates what you do.
But, as far as activities, bloggers are considered a publisher. Podcasters and Youtubers are considered broadcasters.
Luckily, both of these titles coexist under the same code. So, you don’t have to struggle with a decision if you do more than one.
There are two usable codes for bloggers, podcasters and YouTubers. The IRS provided code is 519100. The NAICS code 519130.
As mentioned before, the NAICS code is broken down into the specific subcategories. The IRS code is more general and broader in scope.
I use the NAICS code (519130). To be clear, I own three blog sites and have corresponding Youtube channels.
I also earn some from my own products, but everything I make/do/sell is an extension of my blogs or is a direct result of them. You can see more about how I earn income in my income reports.
What Constitutes a Freelancer?
If you do not publish your own work (i.e run your own blog), but you are a blogger who writes for other people’s blogs, then you are a freelance writer.
The same concept applies to many of the other arts. Photographer, influencer, artist, almost anything that you do independently with the arts will fall under the category of a freelance artist.
All spokespersons, freelance writers, photographers, and other independent artists can use the code 711510. However, you really need to search for your job description if you have any doubts about how to label yourself.
What if I Run an Etsy Store
I think that people who run an Etsy store (or eBay, Amazon Handmade, etc) are sometimes just as confused as bloggers. They often want to categorize themselves by the craft that they do.
That’s understandable. After all, if you make toys it makes perfect sense to want to call yourself a toymaker. However, if the majority of your business income is derived from things that you sell online through an online store, you are an online retailer.
So, when doing your search for a code, begin with online retail. Pay close attention to the descriptions for the categories, because there are quite a few options and subcategories. However, most eBay, Etsy, Shopify Stores, etc will use code 454110 (non-store or electronic shopping)
What if I do Graphic Design Work?
I know that there are a lot of freelance graphic designers out there. Many of you are working as VAs for Pinterest and/or other social media platforms.
According to the NAICS and the IRS, you are not an independent artist. So, the code mentioned above will likely not apply to you. Instead, you may want to consider using code 541430.
This covers all graphical design artists and even a few things that you may not realize fall under that category – like screen printing t-shirts.
There a ton more options and categories. Hopefully, these will help get you started in the right direction. In the meantime, let’s just be thankful that finding our code is a one-time event, unlike paying our quarterly estimates. Ugh!