Top 10 Tax Deductions For YouTubers
In this article, you will learn:
You might have heard of the popular 21st-century Youtube terms such as “Influencer tax” “Blogger tax” and “Influencer tax”. With the tax season arriving every year, YouTubers or influencers have to get them ready to PAY. But the strange thing is that many of them look less forward to paying taxes. For them, it is not so fun to file taxes and it’s just stress.
If you’re a YouTuber or influencer, you are known to be a business owner who paid with YouTube earnings. Considering yourself in this state would put you in the right mindset to pay for the taxes.
So, let’s discuss in more detail – Tax deduction opportunities for the U.S. Youtubers in 2024. One can go with getting a claim on some tax deduction expenses.
When it comes to taxes, bloggers, YouTubers, and other social media influencers, often have some questions in mind:
What Revenue Is Taxable?
What Kinds Of Business Costs Are YouTubers Allowed To Deduct?
What Taxes Do Influencers Pay?
Now that we’re going to discuss the taxes that come with being an internet influencer, influencers need to understand exactly what they’ve earned and the taxes to pay on that specific revenue. This is the only way to easily figure out how much you own.
Most of the influencers frequently forget about the fact that they are self-employed in technical terms. And this is the very reason Social media influencers have to step forward in paying self-employment taxes.
The tax rate is determined by the type of AdSense account an influencer has. If the YouTuber is located outside of the United States, the withholding rate is somewhere around 30% of U.S. earnings. In contrast, businesses already in the United States will be subject to a 24% withholding tax on global earnings.
What Can You Claim Back As Tax Deductions For YouTubers?
The IRS has all of the information you’ll need to make informed decisions, and you can deduct a wide range of expenses from your taxes. If you’re working as a full-time YouTuber, you need to gather the knowledge of the taxes available. Any necessary item that contributes to making business income will cause you to pay tax as per the Internal Revenue Service (IRS).
Considering the items, you can easily determine if you’re making a good claim or not. The IRS has certain rules on which expenses you can claim, including:
1. Business Equipment
Some of the most expensive components of having YouTube channels are cameras and computers you use for editing. There is also a need for microscope or lab equipment in addition to cameras, mics, green screens, and other equipment. Fortunately, you can usually deduct the cost of this equipment as depreciation over five years.
In general, there will be a deduction of 20% of the cost of equipment every year for five years. With this law in place, you can claim 50% depreciation on the first year of ownership. Before filing any claim, check with the IRS or a CPA, with all their advice.
Are you promoting your content and gaining users with YouTube Promoted Videos? Well, this is a great way to not just grow your audience but also get a tax break, especially if you don’t have enough marketing budget. You can claim prizes for contests and giveaways that are directly tied to advertising.
3. Using Your Home Office
If you’re one of the YouTubers who make or edit video content right from home and have a dedicated workspace, the IRS will allow you to deduct a portion of your home expenses.
Using your home office as a tax deduction is completely a red flag. This method is becoming increasingly popular, and the IRS is no longer as strict about it. If you have a room in your house dedicated to YouTube, even if it’s only a pastime, you could be entitled to a significant tax break. You can follow the idea to declare using Youtube space exclusively and regularly.
4. Mobile Phones In Use
You can lawfully deduct Internet and cell phone charges if you use them for business purposes alone. If a YouTuber buys an iPhone for personal purposes, you can only deduct 60% of the cost as an expense, not the entire amount.
Do you keep your YouTube channel on a separate phone? You may be entitled to a deduction if you often use your phone for networking or managing videos and comments.
5. Travel Expenses
Several video artists only concentrate on creating travel-related content. Other YouTube creators may incur expenses related to travel throughout the year and be entitled to deduct these expenses provided they can demonstrate that travel is necessary for their business.
6. Conference Fees
With the rising costs of conferences, it’s comforting to know that they’re tax-deductible. Not only the cost of attending the conference, but also any expenses associated with it, such as food, cab trips, and even the business cards you hand out.
7. Data Storage
Data storage for YouTubers may be costly. What is the size of your hard drive? Do you have any external hard drives? Do you store your files in the cloud? All of these expenses could be deducted from your taxes, allowing you to save money on file storage.
8. Subscription & Software Licencing Fees
If you pay for subscription services or license fees for software or other goods that are directly linked to your business, you can deduct these expenses. If you’re a beauty blogger and subscribe to a beauty magazine regularly, you can make a claim.
9. Expenses For Filming
Any YouTuber’s video creation process is going to cost them something, especially if they want to produce content with a higher production level. Even for the artists with an iPhone, there’s a good possibility they’ll upgrade to a dedicated camera and microphone, as well as additional technology. Keep the receipts, and as a committed film artist, you may undoubtedly deduct these expenses from your taxes.
10. Bank & Shipping Charges
You can also claim bank fees incurred as part of running your YouTube channel. For postage and packaging expenses, you can claim for that too.
Paying taxes to the IRS is mandatory and if you are looking for a way around it, it’s impossible. Every YouTuber like it or not has to pay a fair share of taxes. But, there are some tax deduction opportunities you can get hands-on and claim for the expenses mentioned above.
Also, be clear about your income so no concerns arise in the future. If you find this difficult to manage, shake hands with FreeCashFlow. We help you make your Youtube business run smoothly by minimizing your tax bills. With us, you will know the easiest way to get the claim on underlying expenses.