​​Debunking Content Creator and Influencer Tax Myths

Taxes can be a tricky subject, especially for content creators and influencers who are juggling brand deals, sponsorships, and digital earnings. With so much misinformation floating around, it’s easy to get confused about what’s taxable, what’s deductible, and what could get you in trouble with the IRS. Let’s bust some common content creator and influencer tax myths so you can keep your finances in check and avoid any surprises!

Myth #1: If You Don’t Get a 1099, You Don’t Have to Pay Taxes

One of the biggest misconceptions is that if a company doesn’t send you a 1099 form, you don’t owe taxes on that income. This is NOT TRUE! Whether or not you receive a 1099, you are required to track and report all your income from content creation. This includes payments you’ve received through PayPal, Venmo, direct deposits, or even cash payments from brand deals or fan donations. Companies will only send you a 1099 if they have paid you $600 or more in a given year. When they do that, it is important to note that they’ve also sent the 1099 to the IRS, and the IRS expects you to report the income on your tax return.

Myth #2: Gifts From Brands Are Free Money

There’s nothing quite as exciting as getting free products or PR packages from the brands you love. While it might feel like a nice perk of being an influencer, those “free” gifts can actually be considered taxable income. If a brand sends you a product in exchange for a post, review, or shout-out, it’s considered barter income. And guess what, barter income is completely taxable and the IRS expects you to report its fair market value on your tax return. If a brand sends you a gift with zero expectation of you creating a post or video about it, that is considered a true gift and you don’t have to report that as income since there was no exchange of your services.

Myth #3: You Can Write Off Everything You Buy for Content Creation

There is a lot of tax advice online telling you that your work as an influencer means you can write off your personal lifestyle on your taxes. You can only deduct business-related expenses, but not everything you buy as a content creator qualifies. Business expenses must be ordinary and necessary for your work. For example:

• A high-quality camera for filming? Probably deductible.
• A new wardrobe that you wear both on and off camera? Not deductible.
• A themed costume for a specific video? Probably deductible.
• Your daily Starbucks runs? Not deductible (unless it’s for a client meeting, and then it’s probably only deductible at 50%).

Want more guidance? Download our handy deductions cheat sheet.

Myth #4: You Can Avoid Taxes by Calling Your Content a Hobby

Some influencers believe that if they call their content creation a “hobby” rather than a business, they don’t have to pay taxes. Unfortunately, that’s not the case, and you’re actually worse off if the IRS considers your work as a hobby. The fact of the matter is that if you’re making money as a content creator or influencer, the IRS sees your earnings as taxable income. 

The disadvantage of being considered a hobby is that you lose the ability to claim business expenses. All that money you spent on your home office, video equipment, sound equipment, lights, and more? You can’t claim those deductions and reduce your taxable income.

Myth #5: You Only Need to Pay Taxes Once a Year

This myth is a little tricky. While it’s technically true that you only “need” to pay your taxes once a year, it doesn’t benefit you to do so. Here’s what’s going on. Unlike traditional W2 employees who have taxes withheld from every paycheck, content creators income comes in untaxed. The IRS expects to collect taxes on all your income, but they’d also like their money sooner. The IRS charges interest on the taxes they haven’t received. By making estimated quarterly tax payments throughout the year, you avoid the penalties and fees the IRS will charge you when you file your tax return. Quarterly estimated tax payments are due in April, June, September, and January.

Myth #6: Social Media Income Isn’t Taxable

Whether you’re earning money through YouTube AdSense, TikTok’s Creator Fund, Patreon, Twitch subs, or affiliate marketing, your income as a content creator or influencer is absolutely taxable. Even cryptocurrency earnings and NFTs are subject to tax rules. It’s good practice to start tracking your earnings and keeping records of your expenses so you can accurately report your taxable income when tax season rolls around.

Myth #7: The IRS Won’t Notice Small Income Streams

Some creators assume that if they only make a few hundred dollars here and there, the IRS won’t care. It may be true that small amounts of money might fly under the radar, but let’s be very clear that this is tax evasion. All the income you earn must be reported to the IRS. Please do not try to keep your income hidden and be responsible by reporting your earnings.

Conclusion

Now that you have the correct info on your taxes and understand content creator and influencer tax myths, what’s next?

The most important thing is to keep good records, especially now that you know that all income is taxable, whether or not you get a 1099. Use accounting software or a spreadsheet to track income and expenses so you’re prepared every tax season. Need help with all that? We specialize in bookkeeping, accounting, and tax help for content creators just like you. So book a call with us so we can figure out how to start working together so we can deal with this stuff, and you can get back to your content.