So, you are an influencer having a good year for 2023. This means that you will pay taxes to the IRS for your business. Depending on how well you do, this amount may seem daunting. Fortunately, there are many tax deductions and influencer tax write-offs for you to take advantage of as a content creator. The small business deductions for influencers include anything from equipment to charitable contributions.
Navigating tax deductions and write-offs isn’t easy at the best of times, but it is particularly challenging for influencers. While you may use an influencer accountant, you still need to be aware of what qualifies as a tax deduction or write-off. While it is wise to keep all receipts, invoices and mileage regarding your business, not everything qualifies.
Here’s an example of what is an influencer tax write-off for some and not for others. If you are a fashion influencer, you can write off clothes, but other influencers cannot, even if you expect to be seen in public. Not even the clothes you wear when creating content, unless it is a costume that you can’t be expected to wear in your daily life. Another example, let’s say that you are a hardware influencer, you can write off the safety equipment necessary for content creation, but not your clothes.
To help you understand where you can save on taxes through deductions and influencer tax write-offs, here are some general categories explained. They will make a huge difference in the amount of taxes that you pay for 2023 and therefore your profits as an influencer.
Home Office Expenses
As an influencer, you may do quite a bit of work from home. There are small business deductions for influencers for your home office that can take the edge off the amount of taxes you pay for 2023. Even if you don’t create content at home, you likely spend time researching, marketing and checking on social media assets while at your home computer. This allows you to write off completely or in part a lot of expenses like office furniture, property repairs and insurance, as well as hydro, water and Wi-Fi bills.
Most home office expenses are complete write-offs but some like the office space itself are a percentage of your home and so are the expenses like electricity and water that are shared between your personal and your workspace. Just calculate what percentage of your home is used as your office and use that percentage for the bills. You will need a Schedule C Form to claim write-offs and Form 8829 to claim the tax deductions where a percentage is deducted only.
Equipment and Technology
All equipment and technology that you use for your business as an influencer is a complete write-off for you. This means your computer, cell phone and camera as well as all the accessories that go with them from speakers to lighting. It also covers software/apps needed to run the equipment and your business like editing and photo editing. Hired a real editor? Write it off. Same with your photographer, designer and any other creative pro you hire.
Don’t forget to include any costs for products and/or services that you review. Simply add up all your equipment and technology costs and use the Schedule C Form as everything is written off completely.
Do you travel to meet brands and make deals? Do you travel halfway across the nation to do a photo shoot? Are you networking from coast to coast? All your travel expenses including transportation, accommodations and meals are tax write-offs for you. If you pay for a night out to schmooze a brand or potential partner, then the Schedule C Form is what you need to fully write off all your travel expenses.
Keeping updated and in the know has costs that are categorized as professional development. These can include expenses associated with courses you take to upgrade your knowledge, membership fees to industry organizations as well as any networking events you attend. You can write these costs off, which include any money forked out to travel to the events/courses and parking. They go into the Schedule C Form.
Advertising and Promotion
Since advertising and promotion is such a broad category, its tax implications for influencers is huge. Your website is advertising. Basically, anything that builds awareness of you is in this category. This includes all advertising print, broadcast or online as well as SEO services, social media influencers and website design. It also includes your personalized merch that you give away for free. Since these are completely written off, they belong on the Schedule C Form.
Cost of Goods Sold
Some influencers sell their own products and services, while others buy and resell products and services from another company. Cost of Goods Sold is calculated differently depending on which category you fall into. If you are a beauty influencer like Desi Perkins and create a brand like Dezi Skin, then all the costs associated with creating it are tax-deductible from the raw materials and equipment to anyone you hire to make it happen. Even the postage is tax-deductible as is the storage of the product.
On the other hand, if you resell products for a brand, then only the cost to buy the products is a tax write-off for you on your taxes. Either way, you’ll need the Schedule C Form.
Legal and Professional Fees
Use a lawyer or an influencer accountant? Do you pay dues or membership fees to industry associations? These legal and professional fees are tax deductible even if using the pro as a consultant only. The one stipulation is that these fees must be considered “ordinary and necessary” expenses for your business.
So you can’t write off the lawyer fees if you are arrested for misbehaving on a night out but you can write them off if you have the lawyer work on brand deals for you. Do you use an agent? Write them off! Just kidding, but do use the Schedule C Form to write their fees off your taxes.
Charitable contributions differ from charitable donations if there is a return benefit for you. In other words, the contribution is advertising for you. These contributions are a write-off up to the amount that you can reasonably expect to get back in awareness of you and your brand.
If you contribute $5,000 and end up in a church bulletin that promotes you to a wide enough audience to give you that value’s worth, then you can write off the full amount. If you are only getting $500 worth of value for your money because the audience is small and not targeted, then you can only write off the $500. What is written off belongs on the Schedule C Form.
Influencer Tax Write-Offs FAQs
What other deductions are available to influencers?
Another influencer tax deduction available to you is if you drive for your business including picking up products to review, going to photo shoots and driving to network events. You can claim care maintenance, parking, tolls, insurance and registration, a vehicle tool kit and some vehicle depreciation.
Ever conduct any business over a meal in a restaurant?
The meal is a write-off for you. Don’t forget prizes and giveaways as well as bank fees. And possibly your business loan. With a bank loan, you can deduct the interest only but if you get a loan from a company focused on influencer/creator loans like Breeze, the money borrowed is tax deductible.
How do you ensure you are correctly deducting expenses on your taxes?
If you are your own influencer accountant or you just want a deeper understanding of what qualifies as a business expense, you can check out the IRS’s Publication 535.
Can you still take deductions if you don't make a profit?
Whether you make a profit or not, you still paid out all your business expenses, so you can deduct all these costs.
What documentation do you need to support your deductions?
All invoices, receipts and mileage logs should be kept for anything that you claim.
Can you be audited for taking deductions as an influencer?
Remember that you can always be audited so be honest and keep all documentation to back up your claims.
The Bottom Line
As an influencer, you are your business and there are tons of small business deductions for influencers available to you in 2023. The better your year is business-wise, the more you pay to the IRS, so these deductions and influencer tax write-offs can considerably offset the taxes that you owe.
Don’t let tax season take away from your enjoyment of your success or destroy your hard-earned profits as an influencer. With all the tax deductions and write-offs available, you can still maximize your profits and enjoy a successful bottom line. This blog is intended to make you aware of what is available to you so that you don’t let any of these savings pass you by.