Quick Facts On Filing Taxes For Bloggers, Content Creators & Influencers
The information in this article is up to date through tax year 2019 (taxes filed in 2020).
Businesses of every size in every field use influencers (someone with the ability to persuade potential buyers because of their status, knowledge, etc.) to market their products and services. There are many ways influencers use social media for profit. You can make money from sponsored social media posts, digital products (e.g. downloadable workout programs, meal plans, etc.), podcasting, affiliate marketing, etc.
Do social media influencers have to pay taxes?
Typically, yes. As an influencer, you most likely work as an independent contractor for the companies you promote. Independent contractors are considered self-employed, so you must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax required for self-employed individuals, since you do not have taxes withheld from your paychecks.
For more on this, read All About the Self-Employment Tax.
It’s important to note that even if you have another job that withholds taxes on your behalf, you still must pay SE tax on any income you perform as an independent contractor.
Your state tax obligations may be complex as an influencer. If you work for companies outside of your home state, you may have to file multiple state tax returns.
What tax forms do influencers get?
You should receive a Form 1099-MISC from each brand you partner with that paid you $600 or more. Projects under $600 should still be reported as income on your tax return, even if you don’t receive a 1099-MISC.
Do influencers pay tax on gifts?
It depends. In general, if you receive a gift (free products, trips, etc.) as compensation, it is considered income and you will need to pay tax on the value of the gift. One exception is if you are sent products to review that have a total value of less than $100. You are not required to include the value of those items on your tax return.
What can influencers write off on taxes?
As an influencer, your job can require a wide variety of expenses. These may include (but are not limited to):
Computers, tablets, and smartphones
Cameras and other filming equipment
Editing software
Trademark and copyright fees
Stock photography subscriptions
Advertising and marketing costs
Website
Emailing service
Home office space and supplies
Travel
As long as the expenses are “ordinary and necessary” for your job as an influencer, they are tax deductible.
FYI: If you’re not quite at “influencer” status, the IRS could consider you a hobbyist, and then your expenses wouldn’t be deductible. It’s important to know if your side gig is considered a hobby or job.
What can influencers NOT write off on taxes?
Unfortunately, all the work and money that goes into looking like a dime piece on social media isn’t something uncle Sam really cares about. Clothing, make up, shoes, accessories—nothing that can be “used or worn for dual purposes outside of the work field“ can be tax deductible!
So what would qualify? Any over exaggerated costume piece, or think careers that require specific uniforms such as scrubs—would be tax deductible.
Quick Tips
Put away 20% for taxes
A good guesstimate for taxes you’ll be paying for the year is around 15-20% of your income. The best thing you can do when tax season rolls around is to be prepared, you won’t be scrambling for the money when it’s time to pay the IRS. You may or may not end up paying the entire 20% depending on your business expenses, but better safe than eating ramen for a month.
Set yourself up as a business
High Heel Social Consulting is a LLC making it easier and safer for tax purposes and any future legal matters.
This article has direct adaptation from taxslayor.com to ensure accurate and current information. Consult a tax professional for detailed information on your specific situation. High Heels Social Consulting & High Heels High Chairs does not represent a any Profesional tax attorneys.