Creator expenses with an expert: how to maximize your tax savings
Do you want to save money by paying less taxes to the government, which results in you keeping more of your hard-earned cash from sponsorships and influencer gigs? That’s where learning about specific content creator tax write offs can really pay off financially.
As a content creator, social media influencer, blogger, or any kind of creative freelancer, you are required to report to the IRS how much money you make. Depending on the number, you have to pay taxes to the IRS just like an hourly or salaried worker would. But unlike an hourly or salaried worker, since you are self-employed in the eyes of the IRS, you DO get to take content creator tax write offs.
These tax write offs reduce your taxable income, which means you’ll pay less taxes.
In this post, learn what tax write offs look like for content creators and freelancers, what different types you can take, and how they all relate to the IRS tax form Schedule C. It’s not as complicated as it sounds––I promise!
Disclaimer: This post does not contain financial advice and is purely for entertainment purposes. Reach out to your local CPA for specific tax information for your business.
What are influencer/content creator tax write offs?
In short, content creator tax write offs are expenses you take for your business. They are essentially money that you spend on products and services that help you run your influencer or creator business.
Tax write offs also can be known as business expenses or tax deductions. Tax deductions for your business as an influencer or content creator should NOT be confused with the standard or itemized deduction every person gets to take on their personal taxes (depending on their marital/household status). For example, salaried and hourly workers can get a standard or itemized deduction to reduce their taxable income.
Since you as an influencer are self-employed and own your own business, you get both business deductions AND this standard or itemized deduction.
How do content creator tax write offs work?
Content creator tax write offs basically reduce your taxable income.
In this very simplified example, let’s say that you make $30,000 a year from sponsorships.
You have to pay taxes to the government on your income, but luckily, you do not have to pay taxes on the entire $30,000.
Since you also spent money on products and services, which makes earning that $30,000 possible, you can deduct the amount of money––aka business expenses or tax write offs––you spend from the $30,000.
Let’s say you spend $10,000 for the year running your content creation business. In that case, you would deduct the $10,000 of business expenses from the $30,000 of business income and get $20,000 of taxable income.
Instead of paying taxes on the entire $30,000 you made, you only have to pay taxes on the $30,000 you made less the $10,000 you spent. That’s how tax write offs reduce your taxable income.
As a creator, how do I know what I can write off?
Content creators and freelancers are considered self-employed people in the eyes of the IRS.
Furthermore, many content creators and freelancers either file taxes as a sole-proprietor or an LLC filing as a sole proprietor.
If you file taxes as a sole-proprietor or an LLC filing as a sole proprietor, then you can see what content creator tax write offs you can take with IRS Tax Form Schedule C. Schedule C is a profit/loss form in which you input how much money you make as a content creator and deduct how much money you spent on your business according to various categories of expenses.
These categories show you which write offs are allowed for content creators and freelancers.
9 common content creator tax write-off categories listed under Schedule C
There are 9 common content creator tax write-off categories listed under Schedule C.
- 8. Advertising
- 10. Commissions and Fees
- 13. Depreciation expense
- 17. Legal and professional services
- 18. Office expenses
- 22. Supplies
- 24. Travel and meals
- 25. Utilities
- 30. Home office
Here's a little bit about each one of these common creator tax write-offs.
Whether you post your photo on Instagram and boost it or use Facebook Ads to get more eyes on your blog post, you can expense these costs under Line 8: Advertising.
Commissions and Fees
If you get paid through PayPal or even via wire transfers to your bank, you are probably familiar with fees. These fees can be written off under Line 10: Commissions and fees. Pro tip: if you use Lumanu to invoice clients, you won’t have to pay any fees on the money you receive in the first place. Learn more about the risks of using PayPal friends and family fees here.
When you buy capital assets for your business such as a computer or a DSLR, depending on the item, you probably won’t expense the purchase all at once. Instead you will depreciate it over a certain period of time, which shows up in Line 13: Depreciation expense.
Legal and professional services
Anytime you hire an accountant, lawyer or any type of professional to help you run your business, you’ll be able to deduct those costs under Line 17: Legal and professional services.
Office expenses are costs related to running your business. They can range from photo editing apps to physical goods you use for your business. For content creators, these could be programs such as social media scheduling apps and Adobe for editing or physical items such as SD cards or a portable charger. Some tax deductions for bloggers specifically would include website hosting, theme and plugins.
All of these expenses would be shown on Line 18: Office Expenses.
Pricier physical office purchases such as phones and computers could be considered capital assets, which then you’d depreciate under Line 13: Depreciation expense.
Supplies are more short-term costs of running your business and include items that need to be refilled or replaced in your office. Think printer ink, pens, paper, etc. These types of items would be expensed under Line 22: Supplies.
Travel and meals
Content creators and bloggers often have to travel for jobs or meet up with clients. Under Line 24: Travel and meals, travel can be expensed as long as your trip costs are related to work and 50% of meals can be expensed either when traveling or in a business meeting.
As someone who relies on utilities to run your business, you can expense utilities such as the internet and phone bill under Line 25: Utilities.
Home office space
If you run your content creation business from your home, you can take a home office tax deduction.
The simplified way of calculating this and expensing it under Line 30 is by measuring how much square footage your home office takes (up to 300 square feet) and multiplying it by $5. As a result, the maximum home office deduction you can take is $1,500.
Start maximizing your creator expenses in 2022
As you can see, taking these content creator tax write offs isn’t just encouraged but it’s required to report for the IRS’ tax records. As a result, you might as well expense everything you can to keep your taxable income down!
About the Author
Hey fellow creators! I’m Sarah Chetrit. I used to be a Certified Public Accountant* and now have been a content creator for six years. I started as a travel blogger and now teach bloggers and content creators how to make money with their content creating business. Find me at SarahChetrit.com or on social, @sarchetrit.
* I am an inactive and unregistered CPA. This post is purely for entertainment purposes and does not contain financial advice.