7 Tax Write-Offs for Content Creators to Pay Lower Taxes

Millions of people create content every day as a hobby and distribute it online. Some eventually get popular enough that content creation transitions from a hobby to a side hustle. If you're in the midst of moving from hobby to side hustle, you probably have a grip on scaling up your production quality. But have you considered the tax implications?

Content creation can become a viable income stream, but without the proper tax strategy and write-offs, you could be paying more than you should to the IRS year after year. Use this article to learn about great write-offs you can take as a content creator while maintaining tax compliance. 

What Tax Write-Offs Are Available to Content Creators?

As your content creation expands, it's reasonable to assume you will need to make additional investments in production. The best part? You can take advantage of write-offs for expenses related to equipment, travel, personnel, and other costs of goods. Write-offs you take advantage of must be considered ordinary and necessary for running your business.

Content creator write-offs include: 

1. Cameras for YouTube, TikTok, and Instagram photoshoots

2. Video and streaming cameras for YouTube, TikTok, and social media

3. Specialized lenses for the Instagram app

4. Travel expenses

5. Workspace expenses

6. Short-term hires

7. Prop rentals

Business Expenses

There are business expenses that most content creators can write off, with certain aspects exclusive to this line of work. For example, suppose you've upgraded the computer you edit your content on, the microphone you use to record audio, or nearly any other specialized equipment used for production. In that case, those can be deducted from your taxes.

Content creator business expenses include: 

• Insurance

• Affiliate fees

• Licenses

• Professional services

• Employees and independent contractors

• Specialized equipment

Home Expenses

If you primarily produce content in your home, you can deduct a portion of your housing costs as business expenses. However, to qualify for reimbursement, you must have an accountable plan. It would be best to have an area of your home explicitly designated for content creation purposes only. The home office deduction will then allow you to deduct a portion of your rent, utilities, mortgage, and other housing-related costs corresponding to the portion of your residence used for your business. Other personal properties you make use of for business purposes may also qualify. The office space must be your principal and regular place of work, and you should be able to support your claim with clear documentation, including its square feet.

Transportation Expenses

There are tax benefits to leasing and owning a vehicle for business purposes related to content creation. Deciding whether to own or lease should be based on considerations such as intended use. For instance, if you'll travel a lot for production, purchasing a vehicle will be better than leasing one, as leases typically place limits on annual mileage.

Content creation tax deductions related to transportation include: 

• Monthly lease payments

• Depreciation 

• Monthly loan payments

• Sales tax 

• Operating expenses (gas, oil changes, repairs)

Travel Expenses

Business travel is any travel outside your home city for an entire day or more intended entirely for business purposes. You should be able to deduct all business travel-related expenses that meet these requirements. Keep detailed records of the money you spend on:

• Transportation

• Tolls

• Lodging

• Business meals

• Parking

• Tips 

These are all deductible business travel expenses you can take advantage of for your content creation work. 

Meetings

Transitioning your content creation production from a hobby to a side gig will likely present new business opportunities that may involve meals and entertainment in your pursuit of closing a deal. The general guidance for deductions is that they qualify if they are directly related and an ordinary and necessary part of conducting business.

If you intend to deduct the cost of business meals and entertainment, keep detailed records of each meeting. 

What Taxes Do Content Creators Pay?

Content creators are typically taxed as self-employed individuals and would adhere to the same rules. The IRS identifies the following taxes for independent contractors:

• Self-employment tax: Also known as an SE tax, it includes Social Security and Medicare taxes. You’ll use IRS Form 1040 or 1040-SR to calculate your self-employment tax.

• Income tax: Use a Schedule C form to report your profits or losses related to your content creation business. This is determined by subtracting write-offs from the gross income you've received from your content creation business. 

When Do Content Creators Have to Pay Taxes?

Whether you're a hobbyist or embracing content creation as a side gig, you will pay taxes on the income you receive. However, you wouldn't get a Form 1099 until you've received $600 or more from a business or entity you're working with.

Most content creators are recognized by the IRS as self-employed, meaning they would pay taxes during tax day in April like most Americans. In addition to annual tax filing, self-employed individuals and other business entities are required to calculate and submit quarterly estimated taxes four times a year.Miscalculating quarterly estimated taxes or missing deadlines can cause penalties and increased IRS scrutiny. Ensure accurate filing and never miss a deadline with 1-800Accountant's full-service quarterly estimated tax solution. 

Do You Have to Pay Taxes on Gifts?

It's common for content creators to receive "gifts" from companies marketing new products. Typically, the company sends the "gift" in exchange for content highlighting that product, such as an unboxing video on YouTube. In this type of "gift" scenario, you may owe taxes on that product.

Consult with a tax professional to learn more about taxes on gifts for your business. 

Which Tax Forms Do Content Creators Need?

Content creators will use several forms to report their income, including: 

• IRS Form 1099 

• IRS Form 1040 or 1040-SR

• Schedule C

The businesses or entities you've created content for will provide the appropriate version of Form 1099 at the start of the year. If you have not received that form by late January, contact the business or entity promptly to obtain that document.

The IRS typically updates Form 1040 annually, so it's imperative to use the most current version as you calculate and submit your taxes. 

How Do Social Security and Medicare Work for Content Creators and Influencers?

Content creators are typically self-employed and must pay the 15.3% self-employment tax. Self-employment taxes go toward Medicare (2.9%) and Social Security (12.4%).Employers typically pay the Medicare and Social Security tax through FICA on their employees’ behalf. Employers withhold employee wages to pay one part of it, and they pay another portion themselves.Content creators and other self-employed individuals are responsible for paying both portions independently.

When Content Creation Isn’t Breaking Even & When to Consult the Experts

Your former hobby turned content creator side gig's complex, time-consuming tax responsibilities can be dizzying. Mistakes and missed deadlines due to higher-than-anticipated revenue, bookkeeping requirements, and scaling can lead to additional work and headaches, further detracting from production. That's why many content creators, business owners, and self-employed individuals trust 1-800Accountant, America's leading virtual accounting firm, for help with their professional accounting needs.

Whether it's business tax advisory, small business taxes, or any of our professional services, we have the solution you need at a price that works for your content creator side gig. Schedule a quick consultation – usually 30 minutes or less – to learn how we can help.