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.
For more about how your state taxes may be affected, see Living in One State, Working in Another.
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
- Emailing service
- Home office space and supplies
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.