There are many ways content creators and influencers use social media to make income. You can make money from sponsored social media posts, digital products (e.g. downloadable workout programs, meal plans, etc.), podcasts, affiliate marketing, etc. But do you know how this income is taxed? We cover the basics of content creator taxes for you.
Do social media influencers and content creators have to pay taxes?
Typically, content creators and influencers are required to pay taxes. As a content creator, 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 they do not have taxes withheld from paychecks.
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 earn as a content creator.
Your state tax obligations may be more intricate as a content creator or influencer. If you work for companies outside your home state, you may have to file multiple state tax returns. If you are a content creator that lives in one state and works in another, you will need to understand the reporting requirements for both states.
What tax forms do influencers get?
You should receive a Form 1099-NEC 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-NEC.
If you earn income from YouTube, Instagram, or other platforms like AdSense, you will also receive a Form 1099-NEC for this income above $600.
When you file your tax return, you’ll complete a Form 1040. This is the standard individual return most U.S. taxpayers use to file taxes with the IRS. It’s used to report all income, credits, deductions, and any payments you’ve made, to ultimately calculate how much tax you owe.
The 1040 includes schedules that provide the IRS with more details, like expenses or payments, that impact your tax liability. Since you’re self-employed, you’ll include a Schedule C to report your profits and losses from your business.
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, meaning 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.
Content creator tax write-offs
As a content creator or 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
- Mileage
As long as the expenses are “ordinary and necessary” for your job as a content creator, they are tax deductible.
Note: If you are a content creator but unsure if you are at the level of a business owner, the IRS could consider you a hobbyist. If the IRS views your work as a content creator as a hobby, then your expenses would not be deductible. Knowing if your side gig is a hobby or business is important because this distinction determines the type of deductions you can claim.
How to file taxes as a content creator
In most cases, the IRS considers content creators and influencers self-employed. This means you must report your earnings as self-employed income using Schedule C. When you complete the form, you can write off expenses related to your work, like equipment, advertising, home office space, supplies, or mileage. Doing so can lower your tax liability and ultimately reduce your tax bill.
If you’re looking for an easy way to file your taxes, TaxSlayer can help. We offer TaxSlayer Self-Employed which guides you through any 1099 or Schedule C forms, provides access to Ask a Tax Pro for your most challenging tax questions, sends you quarterly estimated payment reminders, and more.
When should content creators pay taxes?
Individuals are required to file their tax returns by April 15th (or the following business day if that date falls on a weekend or holiday). However, if you’re a self-employed content creator or an influencer, you may need to make tax payments throughout the year. As a self-employed individual, you’re responsible for paying income taxes. If you were a traditional employee, these taxes, Social Security, and FICA taxes would typically be withheld from your paycheck by your employer.
If you expect to owe more than $1,000 in taxes, you must make estimated tax payments to the IRS each quarter. These payments are usually due on April 15th, June 15th, September 15th, and January 15th.
What is your influencer business entity?
Social media influencers and creators are typically independent contractors for tax purposes. Being an independent contractor means you work with partners or companies on a contract basis. You can expect to receive a Form 1099-NEC from any one of these partners who pays you more than $600 in the year.
When you do your taxes, you file your personal 1040 income tax return along with a Schedule C to report your business income and losses. You don’t need to file a separate business return.
Tips for keeping track of your influencer income and expenses
As a self-employed taxpayer, you may find that your tax situation feels more complex than if you were employed by a company. Here’s what you can do to help ensure you’re filing with confidence.
- Consider filing your taxes early instead of waiting until the deadline in April. That way you won’t feel rushed and possibly miss an opportunity to claim important tax breaks.
- Take the time to organize your forms, receipts, and payment records. TaxSlayer Self-Employed helps you enter your info in the right forms, but you’ll need to have all the necessary details handy when you sit down to file.
- Remember that you can deduct certain expenses that are reasonable and necessary to your work. Here are some examples:
- Ring lights and phone mounts
- Computers, tablets, and smartphones
- Filming and editing tools
- Advertising and marketing costs
- Website and email hosting
- Home office space and supplies
- If you’re in the early stages of building a following, the IRS might consider content creation your hobby instead of a business. Make sure you know your status before you file.
Final thoughts on content creator and influencer taxes
Content creators and social media influencers are considered self-employed by the IRS. When you’re self-employed, you have important things to consider, like how to stay organized for tax time, how to pay your tax liability on time (since you don’t have an employer withholding taxes for you), and which expenses you can write off to reduce your tax liability.
TaxSlayer Self-Employed takes the guesswork out of your unique situation, by offering a guided filing experience, help from a tax pro with self-employed filing expertise, and 100% accuracy guaranteed. When it’s time for you to do your taxes, file fearlessly with TaxSlayer.
Start for free today at TaxSlayer.com!
