This article is posted with permission from our partner TaxAct. File your freelance taxes with confidence using TaxAct’s easy-to-use tax software. Freelancers Union members get 25% off the cost of federal and state tax filing: https://freelancersunion.org/tax-center/
Have you joined the ranks of Instagram influencers, bloggers, and content creators on platforms like YouTube and TikTok? If so, it’s crucial that you understand how to file your taxes as a content creator. Don’t worry, though — we’re here to answer your influencer tax questions and point you in the right direction.
- Content creators must pay taxes on their income, whether it’s a hobby or a full-time job.
- Content creators who work as contract workers for brands are considered self-employed. Self-employment taxes must also be paid, and quarterly estimated payments can be made to the IRS.
- Content creators can choose to start their own business entity, like an LLC or corporation, based on their specific circumstances and business goals.
- Free products received from brands in exchange for promotional services may be taxable if their value exceeds $100.
Do content creators have to pay taxes?
Yes, content creators must pay taxes on their income, whether it’s a hobby, a side gig, or a full-time job.
When you’re hired as a contract worker for a brand, as many social media influencers are, you’re considered self-employed. If you make at least $600 with a particular brand, the company must send you a tax form called 1099-NEC, which you’ll report on your individual 1040 tax return using Schedule C. If you work for multiple brands, you’ll receive a 1099 from each.
You will also use Schedule C to report all your business expenses and tax deductions related to content creation.
A quick note: you must report all income you make as a content creator, even if it’s less than $600. So be sure to report all your income, even if you don’t receive a 1099.
How do content creators for social media apps pay taxes?
In addition to paying income taxes, you’ll need to pay self-employment taxes as well. Since you aren’t a W-2 employee and no Social Security or Medicare tax is withheld from your paychecks, you’ll need to pay the self-employment tax if you earn $400 or more from brand sponsorships. The self-employment tax rate is 15.3 percent of your self-employment earnings.
You can pay the self-employment tax by making quarterly estimated payments to the IRS every quarter. Our Self-Employment Tax Calculator can help you calculate how much tax you will owe.
Can I start my own business as an influencer?
Content creators typically pay taxes as self-employed individuals, but some influencers decide to create a legal business entity depending on their specific circumstances.
As a content creator starting your own business, the type of business entity you choose can vary from a sole proprietorship to a limited liability company (LLC) or corporation. The best option for you depends on your long-term business goals, tax implications, and whether you need liability protection.
What are the ways to file taxes as a content creator?
While you can always pay a tax professional for your taxes, that isn’t the only option.
TaxAct Self-Employed is a great DIY tax alternative for content creators, freelancers, and independent contractors, whether influencing is your side gig or full-time job. (If you’re a business owner, we’ve got you covered there too. Check out TaxAct Sole Proprietor.)
How do I file taxes as an influencer?
When you file with TaxAct Self-Employed, we ask you detailed questions to guide you through the process with ease.
Here’s how we can help first-time content creators file their taxes with accuracy:
- Understand your tax status – We’ll help you determine how to classify your influencer income. If you’re just starting out as a content creator, the IRS may only count it as a hobby. Hobby income is reported differently than professional income, so we’ll help you record everything in the appropriate place.
- Income reporting – TaxAct Self-Employed is designed to help you accurately report your income from sponsored content and brand partnerships. We’ll walk you through the process and help you enter multiple 1099s if necessary.
- Deduct business expenses – Tax write-offs are available for content creators to help you reduce your taxable income. We’ll help you enter your deductible business expenses and determine if you qualify for additional tax breaks like the home office deduction.
- TaxAct Alerts – Before you submit your self-employed tax return, our Alerts feature meticulously inspects your return for potential errors, omissions, and tax-saving opportunities you may have missed.
What is tax deductible as a content creator?
Another perk of being an online content creator? Tax breaks.
The IRS lets you deduct “ordinary and necessary” expenses for running your business. Here are some common tax-deductible expenses for content creators:
- Equipment and software costs
- Marketing and promotional costs
- Home office deduction (includes office furniture and supplies)
- Professional development and education expenses
- Domain and hosting fees
Do I need to pay taxes on the free stuff I get as an influencer?
As an influencer, brands may give you free products such as clothing, gear, or even a sponsored trip. In exchange, you may be required to promote that product in a photo shoot or video.
If the brand expects you to perform a service in exchange for the “gift,” it is considered payment for a service, and you should declare it on your taxes (if the value exceeds $100).