Monetizing yourself as a creator is a long journey: build an audience, develop products, find the right brands to work with, negotiate, create content, and then finally get paid. Fortunately Passionfroot makes the business half of things a breeze! However, the story isn’t over when you get paid. There is so much value for you to recover if you handle your taxes correctly.
Overpaying on taxes after all your hard work is a bit like lighting your hard earned money on fire. Therefore, it’s important to know your way around the tax system if you're a content creator in the US.
Tax deductions for creators
Tax deductions play an important role in lowering your taxable income. Let’s face it. As a content creator, there are a lot of expenses involved with your business. The good news is that a lot of these expenses are tax-deductible, meaning you can subtract the amount from your overall taxable income.
Knowing whether a deduction can be written off can be quite confusing. To help with this, the IRS breaks it down into two criteria. The item must be considered both ordinary and necessary for your line of work. Ordinary in that it’s a typical item for your profession and necessary in that you need it for your work.
If you give makeup tutorials on TikTok, for example, you can write off the cost of your cosmetic products. Or, if you’re a chef and have your own cooking channel, you can deduct the cost of your groceries. Better yet, you can deduct the clothing you purchase for reviews if you’re a fashion blogger. But if you’re a makeup artist, you can’t write off your gym membership or groceries since they aren’t necessary for your business.
We are listing out checklist of deductions that you can write off.
Tax calculations can be complex, but you can simplify the process by utilizing a tax calculator. You can simplify the process by utilizing a tax calculator. The below 1099 tax calculator can help you accurately calculate your taxes and determine your tax liability.
Deductible items for creators
Almost anything can be considered content! When it comes to taking business deductions as a freelancer, you can deduct:
- Audio & camera equipment: You can deduct the costs of your camera. Tape players, voice recorders and other equipment you used for creating content.
- Costumes: Purchasing & renting costumes or props for content creation is covered as a write-off.
- Streaming equipment: Headphones, TVs, microphones and monitors and cables count as deductions.
- Mail and postage costs: Deductions for expenses related to mailing merchandise, prints or promotional materials to clients or customers are deductible.
- Bank credit card fees: Any bank fees associated with your business bank account are deductible.
- Health insurance premiums: If you pay your own self-employed health insurance, the premiums are deductible.
- Office supplies: Paper clips, printer paper, ink and other related supplies are covered as write-offs.
- Internet & phone bills: You can write off the portion of the costs used for your business.
- Subscriptions: Expenses related to subscriptions to editing software, like Photoshop, cloud storage or product management tools can be deducted.
- Advertising: Marketing costs and costs related to promoting your content, such as social media ads, are deductible.
- Software & equipment: Any software subscriptions, like Microsoft or Quickbooks, can be deducted.
- Personalized merchandise: Items with your brand’s logo, like a coffee mug or t-shirt, can be written off as deductions.
- Prizes & giveaways: If you give away gifts or prizes to your followers, you can write these off as deductions.
- Website fees: Any costs associated with registering your website, website design and web hosting are deductible.
- Equipment rental: If you need to rent some equipment for a project temporarily, you can deduct the rental costs.
Special business expenses
As a content creator, you might have the following expenses and can deduct them from your taxable income:
- Business insurance: You can deduct premiums paid for business insurance coverage, such as liability insurance or equipment insurance.
- Professional services: Fees paid to graphic designers, video editors and writers assisting in content creation are deductible.
- Self-employment taxes: The self-employment portion of your SE taxes that cover Social Security and Medicare is deductible.
- Office Rent: If you rent space for your business, you might be able to deduct the cost of rent.
- Legal & professional fees: If you hire a lawyer, accountant or any other professional, you can deduct the fees associated with each.
Progressing in your content-related knowledge is key to staying up-to-date and relevant. You can deduct education and professional costs including:
- Workshops: If you need to attend industry conferences, workshops or seminars directly related to your content creation business, the cost to attend is deductible.
- Professional memberships: If you’re a member of professional organizations or industry associations related to your content creation business, the membership fees can be deductible.
- Continuing education: Any courses or books to further your knowledge in your content area can be deducted as a tax write-off.
- Research materials: The costs for books, magazines, subscriptions or online resources used for research in your content creation process are deductible.
Driving for work
As a content creator, you might drive for work to meet a client, pick up items for a photo shoot or attend a workshop, and you can deduct these car expenses:
- Car maintenance: Inspections, oil changes, new tires and repairs are all tax-deductible.
- Car mileage: If you choose the standard deduction, you can write off the miles on your car that were driven for business purposes.
- Car lease: Leasing out a car is tax deductible.
- Parking: Parking fees for any work trip, like meeting a potential client, are tax-deductible.
- Tolls: Any toll fee acquired from driving to or from work can be deducted.
Parking tickets, cosmetic upgrades and other vehicle violations resulting in a fine aren’t deductible.
Traveling for work
As a content creator, you might need to travel away from your tax home for business purposes. If this is the case, you can write off:
- Transportation & lodging: Your bus fare, airfare, taxis or Ubers, train tickets, hotels and AirBnBs are all tax-deductible.
- Business meals: Eating out at a restaurant, drinks or takeout all fall in the business meal category and can be deducted.
Most entertainment expenses don’t count as a deduction, even when traveling for business. This includes things like a round of golf, sporting event tickets or seeing a musical.
Whether you're a full-time or part-time content creator, paying taxes on your income is essential. Remember, deductions can significantly lower the taxes you'll owe. Following the steps outlined here, you'll be ready to save big on your taxes.
As a freelancer, you need to keep track of what’s deductible, receipts, invoices and IRS tax rules. Fortunately, Passionfroot is partnering with FlyFin A.I. to help creators earn more with better tax planning. FlyFin is a platform specifically designed for freelancers, like content creators.A game-changer for 1099 taxpayers, Flyfin eliminates 95% of tax prep work and makes filing effortless. A.I. finds every possible deduction, down to the smallest tax write-off, while FlyFin's team of CPAs specializing in 1099 taxes review, prepare and file tax returns for freelancers and self-employed individuals.
Finding deductions and filing taxes has never been easier with the help of FlyFin A.I.