Are you a creator?
There are so many new industries that popped up as a result of the pandemic. One industry that 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 get them through the stay-at-home orders is now helping them earn a substantial income. According to a 2022 TurboTax data report:
- There was a 207% increase in taxpayers claiming creator, streamer, influencer or related term as their occupation, from tax year 2018 – tax year 2020
- Median age of a TurboTax filer who claims creator as an occupation is 27; and of those filers, 47% filed as self-employed and 51% filed without a W2 – indicating nearly half of these taxpayers are relying on their creator occupation as a primary source of income
- Top content creator occupations include Streamer, YouTuber, Twitch Streamer, Influencer, and OnlyFans.
Whether you’re a TikToker earning money showcasing your favorite dances or you are an influencer sharing the top beauty products on Instagram, we are here to answer some of the most popular questions we hear from creators about their new found streams of income like:
- “Does my creator income from YouTube, TikTok, and Instagram make me self-employed?”
- “When do I have to claim my income from being a creator?”
- “What can creators write off on their taxes?”
TurboTax Self-Employed will easily guide you through your taxes if you are a creator and will help you uncover industry specific deductions related to your work as a creator, but here is a breakdown of what you need to know about your taxes as a creator.
Does my income from creating content for social media or from streaming make me self-employed?
If what started out as a few posts for fun evolved to creating content to make an income, then you are considered self-employed and will need to file your self-employed taxes at tax time. On the bright side, you can deduct so many expenses related to being a creator on your taxes.
When do I have to report my income as a creator?
If you are self-employed as a creator, you will have to report your income and file your taxes if you earn $400 or more in net income since this is the point where you have to pay self-employment taxes, which is calculated when you do your Federal taxes. Self-employment tax is automatically calculated by TurboTax Self-Employed when you do your taxes and is the Social Security and Medicare tax paid when you are self-employed.
If you are an employee, you would typically pay FICA tax, which is 7.65% of gross income, and your employer would also pay a matching percentage, putting it at a total of 15.3%. If you’re self-employed, you have to pay both sides of that tax, or 15.3%. The good news is that the IRS allows you to deduct half the self-employment tax from your income on your federal taxes. The 15.3% is calculated based only on your net business income, not on your gross income, so the more tax-deductible business expenses you can claim the lower that tax will be.
What tax forms will I receive, and where will my income be reported as a creator?
You will receive Form 1099-NEC if you earn $600 or more or possibly 1099-K if you have over 200 transactions and more than $20,000 in payments processed by a third party provider in 2022. You will receive a Form 1099-K for transactions over $600 beginning with your tax year 2023 taxes(the ones you file in 2024) following the IRS announcement to delay the lower over $600 reporting threshold. Even if you don’t receive a 1099-NEC or 1099-K you should still claim any income earned from your business on your taxes.
What are some of the business expenses creators can deduct?
There are a ton of expenses creators can deduct that can lower their taxes like:
- Website development
- Start-up costs
- Video equipment
- Home office
- Car expenses
Check out our free Self-Employed Tax Deductions Calculator to see what other expenses you may be able to deduct.
For even more tips about the Creator Economy, listen to the hosts of our Friends with Tax Benefits Podcast, Kat, Lauren, and Daniel have an in-depth conversation about their personal experiences and perspectives.
What should I do if I still need to file my taxes?
Don’t worry. TurboTax Self-Employed can help you easily and accurately file your taxes and uncover industry specific deductions, whether you are a creator or you are running your own business in another specific industry.
You can also get your taxes done by a TurboTax Live Full Service Self-Employed tax expert who specializes in self-employed taxes. With TurboTax Live Full Service you can request the same tax expert do your taxes again next year. TurboTax Live Self-Employed tax experts are available year round in English and Spanish.