As a busy mom, having a home-based self-employed business has been a blessing for our family. I was lucky enough to be able to design my schedule around our kids’ schedules, which means I have more time with them while still earning an income.
However, while it is a lot more flexible than working a 9-5 job at the office, it’s still a business. Additionally, being self-employed means I have to be on top of my records — not only with my business’ day-to-day finances but with my taxes as well.
If you’re a social media influencer or blogger like me, you may be wondering — what income do I have to claim, and what expenses can I deduct? Here are a few things you need to know.
Social Media Influencers, Bloggers, and Taxes
I know other bloggers and social media influencers, especially in other spaces like tech, beauty, and health have been approached to get free products in exchange for honest reviews. It can definitely be a win-win scenario for all involved, but as a business person, it’s important you know what qualifies as income in the eyes of the IRS and what should be claimed on your taxes.
Did you know if you receive a product or have a trip sponsored, it is considered as compensation (aka income) to the IRS? By the way, you also want to make sure you properly disclose if you’ve been compensated per the FTC policy.
The good news is that many in your audience are already familiar with the practice and would appreciate the transparency!
4 Items You Need to Report on Your Taxes
This is not a complete list of what qualifies and what doesn’t, but according to the guidelines given by the IRS, you should make sure you report things like:
- Brand Partnerships: Do you have a podcast or a video channel that a brand is sponsoring? You need to include what you’re paid as income.
- Products: If you get a product from a brand to review, such as a laptop, camera, gym gear, or nutritional supplements, you have to report that as income at its fair market value.
- Sponsored Posts: Typically a brand will pay you money as the creator of content – it can be a video or a post. This would also include social media promotion. Again, this is something you need to include.
- Ads: Any income you receive from ads need to be counted as income.
How to Report On your Taxes
Hopefully, you now understand it’s important you keep everything on the up and up come tax time, but the question now is, how exactly do you report these freebies you’ve received?
Since you’re an independent contractor rather than an employee, you should receive a 1099-MISC reporting income earned from that brand if what you received was valued at $600 or more. You can then include that amount when you report your income on your taxes. Even if the value was less than $600, you still need to report the product you received. Make sure you keep good records, so you don’t leave anything out.
QuickBooks Self-Employed will help you track your business income, expenses, and mileage year-round and then you can export your tax information to your TurboTax Self-Employed tax return. Even if you don’t use QuickBooks Self-Employed year-round, TurboTax Self-Employed will easily guide you through your taxes.
Tax Benefits for Bloggers and Social Influencers
Just because you’re reporting the stuff that you receive as a blogger or social media influencer as income, doesn’t mean you’ll be stuck with a large tax bill. As a business, there are business tax deductions you can take provided these qualified business expenses are directly related to your business.
Some popular ones to look into include:
- Prizes (that you use for giveaways)
- Website expenses
- Software and apps (including subscriptions for stock photography and video)
- Office supplies
- Trademark and copyright fees
Your Thoughts on Self-Employment and Taxes
Do you have any of these expenses to deduct on your taxes? I hope these tips help make filing your taxes much easier this year.
Don’t worry about knowing these tax rules. TurboTax Self-Employed asks simple questions about you and your business and gives you the tax deductions and credits you’re eligible for based on your entries. TurboTax Self-Employed can find industry-specific deductions that you didn’t even know existed. If you have questions, you can connect live via one-way video to a TurboTax Live Self-Employed CPA or Enrolled Agent with an average 15 years experience to get your tax questions answered. TurboTax Live Self-Employed CPAs and Enrolled Agents are available in English and Spanish year-round and can review, sign, and file your taxes.