It’s tax day in the United States. April 15th is the last day to file your income tax and hand over the cash you owe our benevolent government overlords. For people with regular jobs, filing your taxes can be a snap. But if you’re a YouTuber following your passion rather than receiving a regular pay check, you may have some complicated figures to work out. We’re not tax professionals, so if you’re really struggling to file today then get thee to an accountant! However, we have rounded up a few useful tips for filing your taxes as an independent creative professional that might keep you from breaking the bank…or the law.
Know Who You Are – Some YouTubers are working solo while others are technically part of the company that they produce videos for. If you’re considered an employee, then it’s likely that any paychecks you received have already had your taxes deducted. Look around for a form W-2; if you received one, then you might even be in line for a refund. If you received a 1099, that means you’re being paid the full amount owed as an independent contractor. You’re responsible for deducting tax yourself and today is your last day to pay up.
Know What You Need – If your primary income comes directly from your videos, either via Adsense or through your network, then you are self-employed in the eyes of IRS. If you earned more than $600 this year from your videos, then you should have received a 1099-Misc. This form details everything you earned this year from a particular source. If you have multiple sources of income, for example Adsense and freelance work for another company, you should have received one 1099-Misc for each. The income on your 1099-Misc has already been reported to the IRS so make sure you have all of them before you try to file. If you’re missing one of these forms, call your employer or Adsense Support ASAP.
Look For Deductions – The IRS isn’t completely without mercy when it comes to what you owe. As an independent creator there may be a number of loopholes and deductions that will allow you to pay less. You are allowed to claim back any expenses that are considered “ordinary, necessary, and reasonable” to earning a living in your chosen field. Some costs you may be able to deduct this year:
- Advertising or promotion for your videos -Any paid advertising is a deductible expense.
- Conferences and career-building events – If you attended VidCon, PlayList Live, or any other cons this year in a professional capacity you may be able to deduct the admission fee as well as associated costs like travel, food, and lodging.
- Consultants and advisors – If you hired anyone to help you with your YouTube career or give you professional advice. This could include YouTube consultants, technical advisors, and even tax preparers.
- Software and Equipment – If you purchased any new editing software, a new camera, a fancy editing computer this year these could be classified as professional expenses and you may be able to deduct part of the cost. That includes those costly external hard drives you need to backup and store your footage.
- Home Office Or Studio – If you’ve created a space in your home that’s primarily and regularly for YouTube then it may be deductible. Hopefully you saved your receipts for that Green Screen.
This list is by no means exhaustive, but it is a good place to start thinking about the personal expenses you incur by being a YouTuber. Of course before you try to deduct any of these costs you’ll need to have the receipts to back it up. Don’t try to guess or make things up or the IRS may want to pay you a little visit.
Ask For More Time – If you’re finding this all totally overwhelming, there is hope: instead of filing your complete taxes, you can ask the IRS for an exemption. The good news is that extensions are pretty easy to come by and they give you another six months to get your shit together. The bad news is that you still have to pay. The IRS will require you to pay a portion of the estimated tax you owe today, but if you overpay you can usually get that money back when you file. You’ll also avoid getting stuck with a stiff penalty for filing late.
Get A Jump On Next Year – If this is your first year paying taxes as an independent creator, you may be looking at a pretty big number. Paying an entire year worth of taxes in one shot can be a real shock to your financial system. Most experts recommend that freelancers and independent creators get a jump on the process early by paying their estimated taxes quarterly. That way, when April 15th rolls around, you’ll be looking at a more manageable number and if you overestimate you might even be able to expect a refund from Uncle Sam.
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