What Happens if I Miss the Deadline for Taxes as an Influencer?
We get it. Taxes are not what drew you to content creation. And it can be easy to just put your head in the sand and pretend they don’t exist. After all, there’s no one knocking on your door or sending you a text to remind you to pay your quarterlies, file all the necessary paperwork, and keep track of all your tax-related responsibilities.
Unfortunately, taxes are a necessary responsibility of earning money as a content creator or influencer. If you’ve avoided dealing with them until now, you might be afraid that missing some of the important deadlines will damage your business.
We’re here to help explain what you can do if you’ve avoided taxes so you can prevent long-term problems.
Don’t Hide from It
The first step is to stop hiding from your taxes. Waiting longer is not going to make things better. And no, taxes don’t just disappear.
You can file tax returns for previous years to get back on track if you’ve put off taxes for a year or more. If you’re late making quarterly estimated tax payments, you can start making payments to get back on track.
Know the Potential Penalties
When you file or pay taxes late (or skip doing those things altogether), the IRS charges penalties and interest. The penalties for failing to file your taxes are typically 5% per month, up to a total of 25% of your total unpaid tax liability. If you file but don’t pay your taxes, the penalty is 0.5% of the unpaid balance per month, which may increase to 1% of the unpaid balance over time. As with the failure to file penalty, the total penalty is limited to 25% of the total unpaid tax liability. The IRS also charges interest on unpaid balances and penalties, calculated daily. The interest rate varies — at press time, it’s 8%.
If your state or locality collects income, self-employment, or other taxes, it may also charge penalties and interest on your unpaid taxes.
Both the IRS and your state revenue department may initiate collections procedures, place liens on assets, or garnish wages if your taxes remain unpaid for a long time. Eventually, they may even sue.
Set up a Payment Plan
The good news is that the IRS will typically let you set up a short or long-term payment plan. Your state revenue department may also offer payment plans. You will still pay interest and penalties, but you won’t have the stress of collections activity or the fear that you’ll lose assets.
A payment plan maps out exactly how long it will take to pay off your tax debt. It can be tough for content creators and influencers to plan payments because your income fluctuates month to month, so we recommend putting extra toward your tax debt whenever you can. There are no penalties for paying them off early, if you get a windfall or your income increases enough to cover extra payments.
How to Avoid Missed Tax Deadlines in the Future
Once you face your taxes and get back on track, you’ll want to make sure you don’t avoid deadlines in the future. You can set reminders in your calendar, both to calculate what you owe each quarter and to make sure you make your required payments. You can use our Important Tax Deadlines Calendar to start setting those alarms!
Work With A Tax Professional Who Understands Content Creators
You can always get extra help to keep up! We can handle the bookkeeping and tax calculations, and are always available to give you expert guidance on your finances. Because we only work with influencers and content creators like you, we know exactly how to handle any issues that come up. Book a call to see how we can take your tax worries away.
