There are many ways influencers (someone with the ability to persuade potential buyers because of their status, knowledge, brand, etc.) 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 for you.
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-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 another platforms AdSense, you will also receive a Form 1099-NEC for this income above $600.
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.
Read also: Do I Have a Business or a Hobby?
How do I file taxes on my influencer income?
You can file your taxes yourself online using TaxSlayer. We have a Self-Employed package that will guide you through any 1099 or Schedule C forms, Ask a Tax Pro your toughest tax questions, send you quarterly estimated payment reminders, and more. Start for free today at TaxSlayer.com.
This article was last updated on July 19, 2022.