Taxes for Instagram Content Creators: What You Need to Know

Turning your Instagram content into a business is exciting! Whether you’re partnering with brands, selling your own products, or monetizing your account in other ways, being an Instagram creator comes with perks and responsibilities. One of those responsibilities? Taxes for Instagram content creators. But don’t worry—this guide will make it simple and stress-free.

What Counts as Taxable Income?

 If you’re earning money as an Instagram creator, the IRS considers you self-employed. This means you’re responsible for reporting all income, including:

• Brand Partnerships: Payments for sponsored posts, reels, or stories.
• Affiliate Links: Commissions earned when your followers make purchases through your links.
• Merch Sales: Income from selling your branded products.
• Platform Monetization: Earnings from features like Instagram Badges or subscriptions.
• Other Income: Payments from coaching, consulting, or workshops tied to your Instagram brand.

Even if payments come through gifts or freebies (like PR packages), they might still count as taxable income. If in doubt, report it! 

Deducting Business Expenses 

The best part of being self-employed is that you can write off business expenses to reduce your taxable income. For Instagram creators, these might include:

• Content Creation Tools: Cameras, lighting, props, and editing software.
• Internet and Phone: A portion of your internet and phone bills if they’re used for your business.
• Travel Costs: Expenses for trips related to content creation, like attending events or visiting photo locations.
• Marketing: Ads, giveaways, or hiring help to grow your account.
• Workspace: If you work from home, you can deduct a portion of your rent, utilities, and office supplies.

Keep track of every expense and save your receipts. It’ll make filing taxes much easier (and help you keep more of your money). 

Quarterly Estimated Taxes: What You Should Know

Taxes aren’t automatically withheld from your Instagram earnings, you’re responsible for paying them yourself. If you expect to owe $1,000 or more in taxes for the year, the IRS requires you to make quarterly estimated tax payments.

These payments cover your income tax and self-employment tax, which includes Social Security and Medicare. Missing a deadline could result in penalties, so mark your calendar! 

Key Tax Forms for Instagram Creators 

When tax season rolls around, you’ll need a few important forms:

• Form 1040: Your main tax form.
• Schedule C: The form is a subsection of Form 1040 and is where you report your business income and expenses.
• Schedule SE: The form where you calculate your self-employment tax.
• 1099-NEC or 1099-K: If you earn $600 or more from a single company, they’ll send you a 1099 form to include with your taxes. If you use a payment processor such as Stripe, Square, or PayPal, they may also send you a 1099-K for payments they’ve processed. 1099s are sent to both you and the IRS, so it’s important you report those earnings on your tax return.

Even if you don’t receive a 1099 form, you’re still required to report all income. 

Tips for Staying on Top of Taxes 

Taxes don’t have to be overwhelming. Here are a few tips to make them manageable:

1. Open a Business Bank Account: Keep your business income and expenses separate from your personal finances. You can save hours of headaches at the end of the year by choosing to use your business bank account for your business expenses!
2. Save for Taxes: Set aside 25-30% of your gross income to cover taxes so you’re not caught off guard.
3. Use Accounting Software: An app like QuickBooks Online can help you track income, and expenses, and calculate quarterly payments. 

State Taxes and Sales Tax

Don’t forget about state taxes. Depending on where you live, you may owe state income taxes as well. Additionally, if you sell products, you might be responsible for collecting and remitting sales tax. Check your state’s requirements to avoid surprises. 

Wrapping It Up 

Being an Instagram creator is rewarding, but taxes are an unavoidable part of running your business. By keeping good records, making quarterly payments, and taking advantage of deductions, you can handle your taxes like a pro.

Remember, staying organized and planning ahead will save you time and stress. With taxes under control, you’ll have more energy to focus on what you love most — creating amazing content and growing your Instagram presence. If you need more help handling the money stuff, book a call with us to see how we can work together.