Filing Taxes for Bloggers, Influencers, and other Social Media Careers
Until the paradigm shift in the social media world, amusement and entertainment seemed to be the only focus. Over time, the idea of blogging and influencing started to develop. In no time, bloggers and influencers began to earn, some even making a fortune. As expected it became a form of employment -- self-employment. Subsequently, bloggers and influencers were mandated to pay taxes on their income.
What is the job of bloggers and influencers? Put simply, they use their influence, large fan base, and enormous audience to grow a brand-- helping such ones to increase sales and build brand awareness.
The flexibility of compensation and payment of bloggers and influencers makes it difficult for many to know when and on what to pay taxes.
Do you have to pay taxes as a blogger or influencer?
Every blogger and influencer earning from their job is mandated by the IRS to pay taxes. The self-employment tax (SE tax) must be paid and taxes must equally be filed for business dealings with companies outside the state of residence.
The 1099-NEC tax form is issued for every influencer who works and receives a payment above $600. Payment below $600 is filed as 1040 income tax.
Influencers or bloggers must also pay tax on products they review, except when the value is below $100.
What to Report on Your Taxes
Apart from the fundamental income taxes, other things must be reported according to the IRS.
Partnering with a brand comes with benefits for a blogger or influencer and on which taxes are to be paid. A good example is a brand sponsoring a youtube or podcast channel of a blogger or influencer.
When a product is reviewed and gifted to you as a blogger or influencer, tax is charged on the market value of the product. Be it tech, beauty, or health, any product received -- laptop, nutritional supplements, beauty kits, etc -- tax is charged.
Promotional Posts and Ads
A promotional post which may be a video or image created to promote a brand or product will have proceeds from it taxed as well. Income from ads is likewise taxed.
How to Report Your Income
The question many many ask after knowing what to report is how to actually report them. As mentioned earlier, come tax time, you are to report every earning and income. As a reminder, every earning above $600 should be recorded. Earnings below $600 are best included even though they may not be taxed.
Tax Benefits for Bloggers and Influencers
With the information above, bloggers and influencers may feel overwhelmed and concerned about the taxes due on many of the items they receive. There are however tax deductions to benefit from if any of the equipment below relates directly to their work. Some are:
- The Phone/laptop used for work
- Office supplies
- Money spent on giveaways
- Website creation and maintenance expenses
- Advertisement costs
Blogging and influencing are good examples of self-employed jobs. It's similar to the work of a contractor; a business hires an influencer or blogger to improve or increase the reach of such a business. Since it's an income-generating job, taxes must be filed. As a blogger or influencer don't forget to keep all forms of income properly and pay taxes promptly and accurately.