Content creators, streamers and social media influencers can all benefit from a wide range of tax deductions. Self-employed people working in digital content creation have some unique deduction opportunities available that can reduce their tax bill. Here’s an overview of those deductions and some common questions about them.
Tax Deductions For Content Creators
If you are a content creator on any social media or streaming platform, you must pay taxes for the money you earn. Content creators are typically self-employed and file taxes using a 1099 or 1099-NEC form.
Most content creators earn money through several avenues. For example, Twitch streamers make money through donations, advertising, merch, sponsorships and more. All of these income streams are combined for tax purposes.
So, what tax benefits are available to content creators? There are a lot of expenses you can write off as deductibles.
Business-Related Tools, Equipment and Expenses
The biggest category of tax benefits for digital creators is deductibles for business-related expenses. This includes a wide array of tools, apps, gear and even clothing essential for your influencer business.
The actual expenses under this umbrella can vary depending on your content niche. For example, if you have a YouTube channel where you review tech products, you can deduct all the money you pay for review units.
You can also deduct expenses on all your essential gear, including camera gear, your work computer and even editing software. Giveaway prizes are tax deductible, along with miscellaneous business expenses like music licensing fees or stock video footage.
Office Rent or Home Office Space
If you rent an office or have a dedicated home office space, you can deduct at least a portion of your monthly rent from your taxes. Some content creators don’t have an office. For example, you don't qualify for a home office deduction if you are a TikTok creator and mainly film videos in your bedroom.
If you do have a home office, you can calculate the dedication yourself. The easiest way to do this is to measure the square footage of the space then multiply that by five. The standard deduction for a home office is $5 per square foot but only up to 300 square feet.
Remember that office and home office deductions can get complicated if you move around throughout the year. Where you live throughout the year and how long you live there can impact what space is considered your office for tax purposes. For example, if you rent one apartment in New York and one in LA but only live in New York for one month out of the year, it would be difficult to claim the New York apartment as your “home office.”
Employee and Collaborator Payments
Depending on your platform size, you might hire employees or freelancers to help you create content. That investment will pay off since you can deduct those payments from your taxes.
For example, if you hire an editor to edit a special short film you recorded, the money you pay the editor is tax deductible. Ensure you keep clear and detailed records of any payments like this, whether for employees or simply freelance projects.
Some Types of Meals, Entertainment and Travel
Depending on the type of digital creator you are, you can claim certain meals, entertainment and travel expenses as tax deductions. For example, if you are invited to a film premiere out of town, all your travel expenses and business-related meals for that trip are tax deductible.
Certain Fees, Donations and Insurance Premiums
Finally, many fees, donations and insurance payments qualify for digital creator tax benefits. For example, if you have an agent, their fees are tax deductible. Any fees you are charged for work-related apps or legal fees also qualify.
Additionally, you can deduct any of your marketing expenses and insurance premiums for your business, yourself, your family and your employees.
Content Creator Tax FAQs
Doing taxes as a digital creator can be complicated. A few questions come up frequently, including logistics concerns and possibly hiring an accountant.
How Do You Track Deductible Expenses?
Getting your maximum tax benefits relies on having an accurate record of deductible expenses and total money earned. There are many ways you can keep track of this. Time and efficiency are paramount as a content creator, so look for tools that make expense tracking as quick as possible.
For example, you can download an expense tracker app on your phone to easily add expenses immediately. This avoids the risk of forgetting to write down an expense on the go. Plus, some expense tracking apps will automatically sort and add up costs in different categories for you, simplifying things during tax season.
Do Content Creators Need An Accountant?
The complexity of self-employment taxes might have you wondering if you need an accountant as a content creator. Usually, you don’t, although an accountant’s services can be helpful at a certain point. For most small creators, it’s more affordable and convenient to do your taxes yourself.
However, if you earn significant money as an influencer, paying for an accountant's services will probably be more convenient. Accountants are a good return on investment when they save you more money than they charge.
Do YouTubers and Influencers Get a 1099?
Do influencers get a 1099 from YouTube, TikTok or other social media sites? Usually, the answer is no. However, you might still get a 1099 from agencies, sponsors or other groups for money you earn through social media.
For example, a YouTuber who earns $600 or more through ads on their videos will receive a 1099 form from Google AdSense, which operates YouTube’s ad service. However, that creator won’t receive a 1099 from YouTube itself unless YouTube directly partnered with or sponsored them.
A great example of this is Twitch Affiliates and Partners. Many Twitch streamers earn a significant amount of money directly through Twitch. Affiliates and Partners are even required to fill out W-9 paperwork. Twitch, or its parent company Amazon, will send streamers a 1099 form if they earn enough money, which they can download from their Twitch account.
Tax Basics for Digital Creators
Content creators, streamers and influencers can benefit from many potential tax deductions. You are categorized as self-employed, meaning you may pay more taxes than a W2 employee would. However, you can use the dozens of deductions available to you to save some money.
