YouTube is the second most visited site globally, and as the platform grows, so do its stars. Whether you create reaction videos or educational content, there is quite a bit of money to be made as a YouTube influencer. Of course, when your income grows, your financial responsibilities often do too. In some cases, you may need to start paying quarterly tax estimates. In others, you may need to start putting some money away for tax filing in the future. But either way, it is likely that you’ll need to spend some time focusing on the best way to account for YouTube earnings, especially as the IRS laws consider income derived from social media to be the same as income earned as a self-employed individual.
YouTube Accounting
If you work with an editor, sound engineer, or other video production specialist to create your YouTube content, you must keep an accurate record of your payments to them and record all relevant transactions in your Youtube accounting software. The same goes for spending money on props, purchasing stock images, or incurring any other expenses associated with running your online business. Of course, when you spend the vast majority of your time creating and uploading videos, it can be tough to find time to sit down and work through your bookkeeping. It can also be challenging to know which expenses to record for tax purposes. As such, it is advisable to employ the use of reliable accounting software to help you track expenses and automate transactions to reflect on your recon statements. This makes for a smoother tax filing process and helps to keep the risk of inaccurate reporting to a minimum. Your accounting software can also be set up to take your bespoke YouTube-related expenses into account.
YouTube Influencer Tax Planning
As a YouTube influencer, you likely receive income from a wide variety of different sources. For instance, you may have some monthly sponsorship deals, some regular commission income, and maybe even some one-off payments. Regardless of where your income comes from you will need to account for it using a 1099 Form for independent contractors.
Common expenses that YouTubers can include as deductions when filing their taxes:
- Cellphone and laptop
- Cameras and other filming equipment
- Editing and other related software and apps
- Stock imagery and other related subscriptions
- Business-related travel costs
- Business-related meal costs (to secure the business, for example)
- Trademark and copyright fees
YouTube Influencer Financial Advisory
As a successful YouTube influencer and video creator, you face tough decisions every day. Should you invest in that new camera? Should you hire an employee to help you with your workload? It can be difficult to know what the right calls are.
Fortunately, when you work with an expert accountant that understands the tax laws and requirements for YouTubers, those tricky decisions can become easier to make, by looking into the financial position of your business. Our team of seasoned accountants can look through your reporting, analyze your choices, and provide you with guidance on the right steps to take to secure your financial future. Whether you need help navigating through an economic boom/bust or maximizing cash flow for the short and long term, our CFO advisory services are here to assist you on your journey as a YouTube influencer.
Our CPAs help to ensure you are making timely estimated self-employment and federal income taxes to avoid penalties and fees imposed by the IRS.
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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.
