Influencer or not, taxes are something everyone is expected to pay. Traditionally, you fill out a W2 form sent by your employer and send it to the IRS. But things aren’t as easy when you’re a social media influencer, content creator, or small business owner.
That’s where you’ll bump into influencer taxes.
Because these professions aren’t a typical 9-5, there are different tax obligations, forms, and deductions that influencers have to pay. So what do you need to know about influencer taxes?
Do influencers have to pay taxes?
Yes, influencers have to pay taxes if they’re making money from their profession. Once you start earning from social media influencing, the IRS considers you a self-employed individual or an independent contractor.
This means you qualify to pay federal income tax as you file your taxes. The amount of tax you pay depends on the tax rules of your state, so it’s wiser to do your business in a low-tax region!
If your state implements state tax, it will also be levied on you.
What counts as social media influencer income?
Before you start filing taxes as a social media influencer, it’s important to report your income. Profit and loss are the biggest aspect of your financials that can help you in keeping track of your tax deductions!
We know social media influence means multiple streams of income. You might be earning via subscriptions, sponsorships, or ad revenue amongst tens of other things.
Here is an overview of what your taxable income can look like:
- Ad revenue
- Free products and PR packages
- Affiliate marketing commissions
- Brand ambassador roles
- Sponsored posts or contracts
- Subscription revenue
Now that you know which income is taxed, let’s talk about the paperwork you need to get started!
What tax forms do influencers fill?
If there’s one thing to know about filing taxes, it’s the correct forms. Not only are you required to file taxes within deadlines, but you’re also expected to file for these taxes with the right form!
Is your income above $600 with a single agency or company? You should receive a form 1099-NEC to file taxes from your brand.
Are you making less than $600 with a single brand or agency, you won’t get the form, but you need to report your income somehow.
If you’re an influencer that earns from their online content from third-party vendors like PayPal, you’ll be filing a 1099-K for an income over $600!
Check out these small business federal tax responsibilities if you don’t belong to any of the types mentioned above.
Influencer tax write-offs to claim before you file taxes
Just because your income is taxed on every corner doesn’t mean you can’t write off on taxes. In fact, my biggest tax tip to you is to memorize every item you can write off in taxes for content creators!
Here’s a quick list of things you might be able to deduct and can get written off as a deductible from your money as an influencer:
- Office supplies,
- Social media advertisement costs,
- Subscriptions for social media management software,
But the list doesn’t end here… There are over 10 influencer tax write-offs to claim in 2023!
Are there taxes on gifts or PR packages?
Taxes on gifts is a widely asked question because gifts are a big part of influencing! If your PR package or gift is worth less than $100, there are no tax payments you need to make. But if they’re worth over $100, you’re legally required to report and pay an estimated tax!
3 ways to file taxes as a content creator
You must pay off your tax liabilities as an influencer. There are 3 ways that influencers may opt to pay their influencer taxes:
Hire a Tax Professional
The assistance of a professional tax advisor can make the biggest impact on your tax-paying strategy than by any other method. Tax professionals can benefit your brand tremendously because they:
- Have gone through years of education and experience in filing tax returns,
- Are up-to-date and informed about tax laws and regulations,
- Can offer you long-term advice on taxes,
- Can draw up accurate profit or loss statements to create a personalized tax form,
- Can help your business and brand expand, no matter what type of business you’re in,
- Can save you more in tax returns than the cost of hiring them!
So it’s never a bad idea to seek the assistance of a professional who can deduct the costs for you and cater to your specific needs.
Use Online Tax Preparation Software
If tax advisors are out of pocket, there are more ways to make your tax bed and lie in it. Online tax prep software can help simplify the taxing process (pun intended) for self-employed people.
Most of them come with advanced and pretty unique features that ultimately make tax time easier, even with influencer taxes. Some of the best tax prep software include:
- TurboTax Premium
- Cash App Taxes
- TaxSlayer Self-Employed
- Jackson Hewitt Online
Figure out a DIY bookkeeping method to file taxes online
Living in a digital age means you have unlimited access to quality resources on the web. If you want to do your own bookkeeping related to the business and be responsible for paying your taxes, you can opt to do DIY bookkeeping throughout the year. And once tax season arrives, you can file your taxes through the post or online!
Get a freebie bookkeeping bundle from Stanton Financial Co. to start your bookkeeping today and save on taxes later!
Don’t overpay in taxes for your influencer business!
Influencers pay taxes on their income differently than traditional full-time jobs because they are considered self-employed. You’re expected to pay income tax and self-employment tax, along with state taxes if applicable.
On the other hand, there are many items and expenses you can write off on your taxes and file multiple state tax returns as an influencer!
But the real trick isn’t in knowing just what influencer taxes you’re paying. It’s in knowing how to not put a penny extra on the table! Reach out to us to find out how you can save more than ever in taxes with our help.
De-stress Financially With Stanton Financial Co.
If you want to dive head over heels into being the creative mastermind of your brand, Stanton Financial Co. can help you.
Stanton Financial Co. is a premium bookkeeping and CFO service that brings big business strategies to small businesses, solopreneurs, influencers, and content creators.
Unlike most bookkeeping services, we make it easy for you to profitably manage your fluctuating income. Collaborate with brands and focus on doing what you do best– we’ll take care of everything else!