Content creators pour their hearts and souls into producing engaging and captivating content for their audiences. This can be both time-consuming and costly. Most influencers need high-quality equipment to ensure the best angles and get those money shots. Frequent travel may also be required to keep viewers engaged. Thankfully, there are ways to recoup some of these expenses when it’s time to file taxes. To help you maximize your deductions as a content creator, we’ve put together this list of 12 tax write-offs for influencers.
Top Tax Write-Offs For Influencers
When it comes to tax write-offs, content creators and influencers have a unique advantage. Many expenses that are directly related to your content creation and promotion can be deducted from your taxable income. From advertising fees to website hosting, there are a slew of tax write-offs that can help lower your tax bill. All of the deductions below will be reported on Schedule C (Form 1040) when you file.
1. Advertising Fees
Do you advertise? Many influencers run online campaigns to drive people to their social media platforms, highlight upcoming fan events, or push sales of their branded merchandise. If it’s related to your business, it’s deductible (Schedule C, line 8).
2. Brand Merchandise
Love seeing your name or face on everything? Whether it’s clothing, personalized tumblers, or other items for resale, the cost of making those items is generally tax deductible. Complete Part III, Costs of Goods Sold (Schedule C), to claim the tax deduction.
3. Business Meals
Discussing business over a meal is also a tax write-off. If you’re getting tips from a mentor, collaborating with a potential partner, or meeting with your stylist to discuss your outfit for an upcoming event, the cost of your business meal (generally 50%) can be deducted on line 24b.
4. Cell Phone
As an influencer, you probably never go anywhere without your cell phone. If you’re smart, you have one strictly for business and can deduct 100% of the purchase cost under Part V, Other Expenses. Otherwise, you’ll need to determine which percentage is used for business and do a little math. Your phone bill, however, should be claimed on line 25 (utilities).
5. Contest Giveaways
Have you ever given away prizes for a contest or promotion to boost your following or increase your brand visibility? The cost of the prize can be deducted as an advertising expense on line 8.
6. Editing Software
7. Equipment Costs
Laptops, cameras, tripod stands, and lighting accessories are just some of the necessary equipment you’ll need to purchase to be a successful content creator. Other equipment may include power banks, microphones, and green screen backgrounds. Since most of these items will be used for more than one year, you can take the deduction on line 13 (depreciation and Section 179 expense deduction).
8. Home Office Deduction
Do you have a dedicated space in your home that you use for content creation? You may be eligible to claim the home office tax deduction. If qualified, you can opt to use either the simplified method ($5 a square foot) or actual expenses. Costs may include rent or mortgage payments, utilities, internet service, and much more! You’ll need to complete Form 8829, Expenses for Business Use of Your Home, and enter your allowable expenses from line 36 (Form 8829) on Schedule C, line 30.
9. Contractual Services
You can’t be an influencer without looking your very best, and that may take a team effort. If you hire a stylist, makeup artist, or photographer, or pay for other contractual services (non-employees), you can deduct these expenses on line 11 (contract labor).
10. Sample Products
Are you trying to launch your career as a content creator by providing product or food reviews? Great news! You can write off the cost of those meals or items if they were solely used to provide feedback and reviews. Include these expenses on line 27a (other expenses) of Schedule C.
11. Travel Expenses
Whether you’re driving to a business meeting or traveling to a tropical destination for a photo shoot, many of your expenses are tax deductible. For example, parking fees and tolls paid while traveling for business go on line 27a. Airline tickets and car rental fees, on the other hand, go on line 24a (travel). You may even deduct the costs of hotel rooms or even a cruise fare if it’s directly related to your work.
12. Website Hosting
If you pay web hosting fees for a branded website or to maintain content files, you can also deduct these as a business expense. You can claim them on either line 11 (advertising) or line 18 (office expense). Some influencers also claim these fees on line 25 (utilities) or 27a (other expenses). Just be sure that you only claim them once on Schedule C.
Keep Accurate Records For Tax Purposes
To ensure you maximize your deductions and stay compliant with tax regulations, it’s crucial to keep accurate records of your business expenses. This includes retaining receipts, invoices, and any other supporting documents for your deductions. Consider using accounting software or apps to keep track of your expenses and income throughout the year, making tax time much more manageable.
Additionally, create a dedicated folder on your computer or cloud storage system to store your digital records. Organize your expenses by categories, such as equipment, advertising, travel, and subscriptions. By keeping meticulous records, you can easily substantiate your deductions in the event of an audit.
Ask For Professional Tax Help If Needed
Although it’s possible to handle your taxes as an influencer on your own, working with a tax professional can provide numerous benefits. A tax professional who specializes in working with content creators and influencers will have a deep understanding of the deductions available to you and can help you navigate the complex tax landscape.
A tax professional can also help you plan your finances throughout the year to optimize your deductions and minimize your tax liability. They can provide valuable insights into structuring your business, managing your expenses, and staying compliant with tax laws. Investing in a knowledgeable tax professional can save you time, stress, and potentially even money in the long run. For a free consultation, contact Tax Defense Network at 855-476-6920.