Do creators pay tax on the money they receive?

are you creative

There are so many new industries that have emerged as a result of the pandemic. One industry that has exploded is the creator economy, which includes influencers on TikTok, Instagram, YouTube, OnlyFans and Streamers. For many influencers, what started out as something fun to do with stay-at-home orders is now helping them generate significant income. According to the 2022 TurboTax data report:

  • There was a 207% increase in taxpayers reporting creator, streamer, influencer or a related term as their occupation from tax year 2018 to tax year 2020.
  • The average age of a TurboTax preparer who claims to be a preparer is 27; And of those filers, 47% filed as self-employed and 51% filed without a W2 – indicating that nearly half of these taxpayers rely on their crafting occupation as their primary source of income.
  • Top occupations for content creators include Streamer, YouTuber, Twitch Streamer, Influencer, and OnlyFans.

Whether you’re a TikToker making money from your favorite dance moves, or an influencer sharing the best beauty products on Instagram, we’re here to answer the most popular questions we hear from creators about their new revenue streams, like:

  • “Does my creator income from YouTube, TikTok and Instagram make me self-employed?
  • “When should I claim my income from the Creator?”
  • “What Can Creators Deduct on Taxes?”

TurboTax Self Employed It’s easy to guide you through figuring out your taxes if you’re a creator and help you identify industry-specific deductions related to your work as a creator, but here’s a quick rundown of what you need to know about your taxes as a creator.

Does my income from creating or streaming content for social media make me self-employed?

If what started out as a few posts for fun has evolved into content creation for income, then you are is considered self-employed And you’ll need to file your self-employment taxes at tax time. on the bright side You can deduct so many expenses Connected to your tax preparer.

When should I report my income as a creator?

If you are self-employed as a creator, you will need to report your income and file your taxes if you earn $400 or more in net income, as this is the point at which you must pay Self-employment taxes, which is calculated when you do your federal taxes. Self-employment tax automatically calculated TurboTax Self Employed When you file your taxes and whether Social Security and Medicare taxes are paid when you are self-employed.

If you’re employed, you’ll usually pay FICA tax, which is 7.65% of your gross income, and your employer will pay a matching percentage, making it a total of 15.3%. If you are self-employed, you must pay both sides of this tax, i.e. 15.3%. The good news is that the IRS allows you to deduct half of your self-employment tax from your income on your federal taxes. The 15.3% is only calculated on the net income of your business, not the gross income, so the more tax you can deduct on your business expense claim, the lower the tax.

What tax forms will I receive and where will my income be reported as a creator?

You will receive it Form 1099-NEC If you earn $600 or more or maybe 1099-k if you have it’s over 200 transactions and more than $20,000 in payments processed by a third-party provider in 20202. You’ll receive a Form 1099-K for transactions over $600 beginning with your 2023 tax year (the one you filed in 2024) after the IRS announced it will delay the $600-plus reporting threshold. Even if you don’t receive a 1099-NEC or 1099-K, you should still claim your business income on your taxes.

What are business expense deductions for filers?

There are a number of expenses that developers can deduct that will lower their taxes, such as:

  • Website development
  • Start-up costs
  • cameras
  • video equipment
  • Internet
  • Home office
  • stocks
  • Car expenses

Check out our Free self-employed tax deduction calculator To see what other expenses you can deduct.

For even more tips on the creative economy, hear from our hosts Friends with Tax Credits PodcastKathy, Lauren and Daniel speak in depth about their personal experiences and perspectives.

What if I still need to file taxes?

Do not worry. TurboTax Self Employed Helping you easily and accurately prepare your taxes and identify industry-specific deductions, whether you’re a creative or self-employed in another specific industry.

You can also receive your payments a TurboTax Live Full Service Self Employed Tax Expert which specializes in self-employed tax. TurboTax Live with full service You can ask the same tax expert to redo your taxes next year. TurboTax Live self-employed tax experts are available year-round in English and Spanish.

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Lisa Green-Lewis

Lisa has over 20 years of tax preparation experience. His success is attributed to interpreting tax laws and helping clients better understand them. He held the positions of public auditor, controller and operations manager. Lisa has appeared on The Steve Harvey Show, The Ellen Show and major news programs to break down the tax laws and help taxpayers understand what the tax laws mean for them. For Liz, providing taxpayers with timely and accurate information to help them keep more of their money. More from Lisa Green-Lewis

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