Tax Tips for Influencers
I know, everyone’s favorite topic, TAXES! I actually love the topic because I’m passionate about helping you save as much money as possible. There are some things you can do throughout the year to make your life, and your accountants life, easier come tax time.
Record ALL of your income. If you’re a blogger or social media influencer you likely get a ton of ‘gifts’ from companies that you work with and promote. The swag you receive is actually considered taxable income by the IRS. This includes the value free trips, sponsorship for conferences, affiliate income, and any free items you receive in exchange for a review. Keep a spreadsheet of all of this throughout the year to avoid forgetting about everything come tax time.
Be careful not to double count your income. This may seem completely obvious, but if you’re using a payment gateway like PayPal this can easily happen. For example if someone pays you more than $600 through PayPal they will send your a 1099- MISC directly. Then PayPal will provide you with a 1099-K. Both are correct to do so, but be careful to record this correctly on your tax return.
Utilize Apps. You’re used to using the latest technology to do your job, so this simple tools will help keep your organized. Expensify is perfect for keeping up with your day to day purchases. No one likes the shoe box full of receipts to sort through at the end of the year! MileIQ is another favorite for tracking every business mile driven. Heading to a conference or photo shoot? This simple app runs in the background to track every mile you drive. You just select business or personal at the end of your drive.
Consider an SCorp. If blogging or social media is your main gig this structure could benefit you greatly. You will need the help of an expert to get this set up correctly. Once established your income will go directly into the business, and you will pay all necessary business expenses from that account as well. This not only provides you a layer of protection, but the net income from this ‘pass-through’ entity is reported on your personal tax return and not subject to self-employment tax. That’s 15.3% savings right off the bat.
Hire a Tax Professional. A great tax accountant can help you plan accordingly throughout the year. If you’re not touching base with them at least once a quarter you’re under utilizing them! They can help you estimate your quarterly payments as your income may fluctuate. They can provide you with the best strategy for your unique situation!
