Quitting your regular job to pursue a career as a full-time fashion influencer on Instagram or a video game streamer on Twitch might sound like something out of a fantasy. However, data from Demand Sage indicates that most content creators take around six and a half months to earn their first dollar. Moreover, a recent Goldman Sachs Research report shows that only about 4% of creators make more than six figures.
No matter what you earn through your content, you should expect to pay taxes on those earnings. The IRS typically views influencers and digital creators as self-employed individuals. This means that you need to set aside a portion of your income for taxes, though some deductions might help you out. Let’s delve into what this looks like come tax season.
Essentially, any money you make is likely taxable, and content creator income falls into that category. Here’s a breakdown of common income sources for creators that need reporting to the IRS:
- Advertising revenue: Earnings from YouTube’s Partner Program, Facebook Reels ads, or display ads on your blog.
- Brand sponsorship: Companies pay for Instagram Stories, TikTok videos, or blogs featuring their products.
- Subscription: Selling subscriptions for exclusive content through platforms like Substack, Patreon, and OnlyFans.
- Goods sales: Selling branded merchandise such as clothing on your social media or website.
- Affiliate commission: Earning a commission via programs like Amazon Associates when someone makes a purchase through your links.
- Donations and tips: Getting paid for “donations” or tips during live streams or for custom content on platforms like OnlyFans.
It’s worth noting that even non-monetary gifts, like branded merchandise or free meals, can also be seen as taxable income, particularly if you’re promoting a brand in return. Creators should generally report anything worth $100 or more.
Regardless of whether you identify as an influencer, content creator, or blogger, the IRS likely sees you as self-employed. This brings the responsibility of paying federal income taxes on your earnings, alongside any applicable state and local taxes.
Then there are self-employment taxes, which encompass Social Security and Medicare taxes. The combined rate is typically around 15.3% of your income, in contrast to the 7.65% applied to traditional salaried employees.
When preparing tax filings, creators often handle specific documents:
- Form 1099-NEC: Businesses use this to report payments to independent contractors. You might receive this from platforms or brands that paid you more than $600 in a year; from 2026 onward, the threshold increases to $2,000.
- Form 1099-K: Used by payment platforms like Venmo and PayPal, this form reports payments received. If your total exceeds $20,000 and involves more than 200 transactions, you’ll need to file it.
Be mindful that you could receive both forms for the same income, say, if a client pays you via Venmo. Keeping thorough records of your income is crucial to avoid double taxation.
The tax deadline for everyone, including influencers, is April 15. However, waiting to pay your taxes all at once isn’t ideal. If you earn a substantial income, you might find yourself needing to pay estimated taxes quarterly—in January, April, June, and September.
You’ll need to use Schedule C to calculate and record any profit or loss and Schedule SE for your self-employment tax. If you’re filling out a paper return, remember to attach both forms to your 1040. Tax software can simplify the process and might have versions tailored for self-employed individuals.
One of the perks of being self-employed is the potential for tax deductions that traditional employees usually miss out on. Here are examples of deductions available to digital creators:
- Home office deduction: Applicable if you have a dedicated workspace for your business.
- Clothes and makeup: Expenses for items purchased strictly for shoots or promotions.
- Some business trips: Although it can get tricky if the trip has both personal and business components.
- Up to 50% of business meals: Meals must be prepared by a restaurant and not deemed extravagant.
- Administrative fees: This includes charges paid to platforms.
- Marketing costs: Expenses related to paid advertising on social media or collaborations.
- Equipment, software, and supplies: Only the portion used for business can be deducted if the item has personal use as well.
Creators might also qualify for additional deductions like health insurance premiums or qualified business income deductions. If you’re unsure about what you can claim, consider consulting a tax professional.
Digital content creators do not escape the tax responsibilities. Approximately 70 occupations, including creators, can benefit from a new “tip tax-free” deduction, which allows for up to a $25,000 deduction on tips, though this cannot exceed your net income for the year.
The deduction does dwindle for higher income individuals, specifically those with a modified adjusted gross income (MAGI) above $150,000 for single filers or $300,000 for those married filing jointly.
The IRS allows reporting a business loss if your expenses surpass your income. For instance, if you’re a travel influencer spending $5,000 on gear but only earning $2,000, you can report that $3,000 loss to lower your taxable income. Just bear in mind that if you haven’t been profitable in three of the last five years, your influencer work might be categorized as a hobby, which means you can’t deduct future business expenses.
It’s important to note that content creators generally need to pay both federal income and self-employment taxes. Depending on your location, state and local taxes might apply as well.
If you sell on TikTok Shop and exceed the threshold for transactions, expect to receive a 1099-K. Regardless of whether you meet those criteria, you still have to report any revenue from your shop. Similarly, if you earn through brand sponsorships or other means, you might receive a 1099-NEC from those businesses.
Lastly, any income earned on platforms like OnlyFans must also be reported, regardless of the amount. For U.S. residents, OnlyFans will issue a 1099-NEC for earnings over $600 in a tax year.
