Do Influencers Pay Taxes? A Complete Guide

Yes, influencers and content creators must pay taxes on their income through online activities. 

Even if content creation is just a side gig or hobby, you must still report all earnings to the IRS.

This applies whether you make money from brand sponsorships, ad revenue, affiliate marketing, or receive gifted products in exchange for promotion. The IRS considers all these forms of compensation as taxable income.

As an influencer, you're categorized as self-employed for tax purposes. This means you're responsible for paying self-employment taxes and regular income tax on your earnings.

Do Influencers Have To Pay Taxes?

Influencers and content creators are considered self-employed by the IRS. This means you must pay taxes on your income, even if content creation isn't your full-time job.

Any income earned from brand deals, YouTube ad revenue, affiliate marketing, or sponsored posts is taxable. 

If an influencer earns more than $600 from a company in a year, they will likely receive a 1099-NEC form from the company. Earnings below $600 must still be reported on tax returns. Additionally, influencers receiving payments through third-party platforms like PayPal might receive a 1099-K if they meet certain thresholds.

It's not just cash payments that are taxable, either. If you receive free products, trips, or other perks from brands in exchange for promoting them, the fair market value of those items is also considered taxable income.

As a self-employed individual, you're also responsible for paying self-employment taxes. This includes Social Security and Medicare taxes normally withheld from a traditional employee's paycheck.

The self-employment tax rate is 15.3% as of 2023. This consists of 12.4% for Social Security and 2.9% for Medicare. You'll pay this tax on your net earnings from self-employment, which is your total income minus any deductible business expenses.

What Tax Forms Do Influencers Receive?

As an influencer or content creator, you'll likely receive one or more tax forms from companies you've worked with throughout the year. 

These forms report your income to the IRS and help you complete your tax return accurately.

1. 1099-NEC

If you earn over $600 as an independent contractor from a brand or company, they must send you a Form 1099-NEC.

This form reports your non-employee compensation, which includes payments for services you provided, such as sponsored posts, affiliate commissions, or content creation fees.

2. 1099-MISC

While the 1099-NEC is used for most self-employment income, the 1099-MISC may still be used to report other types of payments you receive as an influencer. 

This could include prizes, awards, or the value of gifts and free products provided in exchange for your promotional services.

3. 1099-K

If you receive payments through third-party networks like PayPal, Venmo, or Cash App, you may receive a Form 1099-K. 

As of 2022, this form is issued when you have over $600 in transactions, regardless of the number of transactions. Previously, the threshold was $20,000 and 200 transactions.

Remember, even if you don't receive a 1099 form, you're still responsible for reporting all your income on your tax return. Keeping detailed records of your earnings throughout the year will make tax time much easier.

4. Form W-8

Form W-8 is a series of forms the IRS provides to help foreign individuals and businesses establish their status as non-U.S. residents for tax purposes. 

If you are an influencer earning income from U.S. companies but do not reside in the United States, you might need to fill out one of the W-8 forms. 

These forms ensure that appropriate tax withholding rates are applied based on the tax treaties between the U.S. and your country of residence.

Do Influencers Pay Taxes On Gifts And Free Products?

Yes, influencers must pay taxes on gifts and free products they receive from brands, as the IRS generally considers these items taxable income. 

If an influencer receives a gift in exchange for promoting the product (such as a review, social media post, or shout-out), the gift's fair market value must be included in their taxable income. This applies whether or not the influencer receives a 1099 form from the brand.

Here’s how it works:

1. Fair Market Value As Income

The value of the free product or gift is treated as income, and the influencer must report this on their tax return. 

Fair market value is what the product would cost at retail. 

For instance, if a brand sends a $300 camera for an Instagram review, the influencer must report $300 as income.

2. Gifts And Reporting Threshold

The IRS has set a general threshold of $100 for gifts; gifts below this value may not need to be reported, but anything above must be declared. 

However, it’s advisable to report all gifts to avoid any issues, especially since brands often write off them as marketing expenses, creating a paper trail that the IRS can track​.

3. IRS Forms And Documentation

Influencers may not always receive tax forms for every gift, but they are still responsible for reporting these items. 

For gifts or products received, a 1099-MISC or 1099-NEC form might be issued if the fair market value crosses the reporting thresholds. However, influencers must keep their own records of gifts they receive and research their value if the brand does not explicitly provide it​.

4. Non-Cash Compensation

The IRS considers these promotional gifts as a form of bartering or exchange, meaning that even non-cash compensation (like products or services) must be included in the influencer’s gross income for tax purposes.

What Expenses Can Influencers Write Off On Taxes?

As an influencer, you can significantly reduce your taxable income by writing off various business-related expenses.

Since you're considered self-employed, the IRS allows you to deduct ordinary and necessary expenses for your business. Here's a detailed breakdown of common expenses you can write off:

1. Home Office Expenses

You can claim the home office deduction if you use a dedicated space in your home to create content. 

The IRS allows you to deduct a portion of rent, mortgage interest, utilities, and maintenance costs based on the percentage of your home used for business purposes. 

You can use the simplified method, which allows a deduction of $5 per square foot, or the actual expense method, where you calculate the exact costs​. The IRS allows a deduction of $5 per square foot of the home office, up to a maximum of 300 square feet, which equates to a maximum deduction of $1,500.

2. Equipment And Supplies

Equipment costs such as cameras, lighting, microphones, tripods, and computers are deductible as business expenses. 

For items expected to last longer than a year, like a new camera, you may need to depreciate the cost over several years. Office supplies, like pens, notepads, and storage devices, are also deductible​.

3. Software And Subscriptions

Any software you use to edit videos, schedule posts, manage content, or communicate with clients (e.g., Adobe Premiere, Canva, or social media schedulers) can be written off. 

This also includes cloud storage services and other online tools necessary for your work​.

4. Travel Expenses

If you travel for a photoshoot, event, or meeting related to your influencer activities, you can deduct transportation, airfare, hotel stays, meals (typically 50% of the cost), and even parking and tolls. 

If you're driving for work, you can deduct the actual car expenses (gas, repairs, etc.) or use the IRS standard mileage rate​.

5. Marketing And Advertising

Expenses you incur to promote your brand, such as sponsored posts, paid ads on platforms like Instagram or Facebook, website hosting, or giveaways, are deductible. 

This category can include costs for boosting posts, paying for advertising services, and even hosting a branded website​.

Tip: As an influencer, one key source of income is through affiliate marketing or sponsored posts, where having an effective sales page can make a huge difference.

Get your free worksheet to help you write the perfect sales landing page to convert leads into paying customers.

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6. Contract Labor And Services

If you hire a photographer, makeup artist, stylist, or virtual assistant, the money you pay them is deductible. 

Any contractors or freelancers who help you produce content or manage your business can be deducted under contract labor​.

7. Meals

Business meals are deductible if they are directly related to your work, such as meeting with potential collaborators, managers, or partners. Typically, 50% of the cost of the meal is deductible​.

8. Cell Phone And Internet

If you use your phone and internet for your business, you can deduct a percentage of those costs. It’s easier if you have a phone dedicated to business, in which case you can deduct 100% of the cost. Otherwise, you’ll need to determine the percentage of business vs. personal use​.

9. Gifts And Contest Giveaways

If you give away products as part of a contest or promotion, you can deduct the cost of those items as an advertising expense. This is common for influencers running campaigns to boost their following or brand​.

10. Legal And Professional Services

Fees paid to lawyers, accountants, or tax professionals for services related to your business are deductible. This includes any costs for consulting on contracts, tax preparation, or legal advice​.

11. Insurance

If you purchase insurance to protect your business, such as equipment insurance or general liability insurance, you can deduct the premiums paid​.

12. Business Use Of Your Vehicle

If you use your vehicle for work-related purposes, such as driving to a shoot or attending a business meeting, you can deduct the associated expenses. This includes gas, repairs, insurance, and registration, or you can opt to use the standard mileage deduction​.

13. Clothing And Makeup (Limited)

Any clothing or makeup that is not suitable for everyday wear but is specifically purchased for a shoot or event can be deducted. 

For example, costumes, branded uniforms, or makeup purchased for a tutorial would qualify​.

14. Sample Products For Review

If you purchase products solely for review purposes and they are not used personally, you can deduct the cost as a business expense​.

15. Training And Education

Expenses related to improving your skills, such as attending workshops, purchasing educational courses, or certifications relevant to your business, are deductible​.

16. Website Hosting And Domain Fees

If you maintain a website or blog as part of your content creation business, you can deduct the costs of hosting and domain registration fees.

How Much Do Influencers Pay In Taxes?

The amount you pay in taxes depends on your total earnings and how well you manage deductions. 

Since most influencers are classified as self-employed, they must pay income and self-employment taxes.

1. Self-Employment Tax

Influencers are responsible for the self-employment tax covering Social Security and Medicare. 

This rate is currently 15.3% on your net earnings (12.4% for Social Security and 2.9% for Medicare). 

Unlike traditional employees, influencers must cover the employer and employee portions of these taxes. However, you can deduct half of the self-employment tax on your income tax return​.

2. Income Tax

Your income tax rate will vary depending on your total income and tax bracket. Income from influencing is treated like any other earned income, so it will be taxed at your marginal income tax rate, which ranges from 10% to 37% in the U.S., depending on how much you earn annually​. 

The more income you earn, the higher the rate, and it applies to your total earnings after deductions and write-offs.

3. Quarterly Estimated Payments

Since self-employed individuals don’t have taxes withheld by an employer, influencers need to make quarterly estimated tax payments to avoid penalties. 

These payments are due in April, June, September, and January of the following year​. You’ll need to estimate how much you expect to owe and make these payments accordingly.

4. Potential Deductions

Fortunately, influencers can lower their taxable income by claiming several business-related deductions, such as equipment costs (cameras, computers), home office expenses, travel costs, and marketing expenses. 

Deducting these legitimate business expenses can help reduce your overall tax burden​.

5 Tax Tips For Influencers And Content Creators

As an influencer or content creator, navigating the world of taxes can be overwhelming. 

Here are five tips to help you stay on top of your tax obligations and maximize your deductions.

1. Track Your Income Accurately

As an influencer, you'll likely receive income from various sources (brand deals, affiliate marketing, ad revenue). 

You must keep accurate records of all income received, whether reported on a 1099-NEC, 1099-K, or paid directly. 

Any income over $600 from a single source is typically reported via a 1099 form, but you are responsible for reporting all income, even if you don’t receive a 1099​.

2. Set Aside Money For Taxes

Since influencers don’t have taxes withheld from their income like traditional employees, you should plan for quarterly estimated tax payments. 

These payments help cover your federal income tax and self-employment tax (15.3%), so you don’t face penalties at the end of the year​.

3. Take Advantage Of Deductions

To lower your taxable income, claim deductions for business-related expenses. Common deductions for influencers include:

• Equipment (cameras, lighting)
• Software subscriptions
• Home office expenses
• Travel costs for content creation
• Marketing and advertising expenses​.

4. Keep Track Of Gifts And Free Products

If you receive free products or gifts from brands in exchange for promotion, the fair market value of these items is considered taxable income. 

You need to report these on your tax return, even if the brand doesn’t send you a 1099 form​.

5. Hire A Tax Professional

Given the complexity of influencer tax obligations, consulting with a tax professional who understands the industry is wise. 

They can help you identify additional deductions, ensure compliance with quarterly payments, and manage your overall tax strategy effectively.

What's The Best Way For Influencers To Manage Taxes?

Given their unique financial situations and obligations, managing taxes effectively is crucial for influencers and content creators. 

Here are the best strategies to help influencers navigate their tax responsibilities:

1. Track Income And Expenses Consistently

Keeping detailed records of every dollar you earn and spend is essential. Use bookkeeping software or apps to log all your income sources (brand deals, ad revenue, affiliate commissions) and expenses (equipment, travel, marketing, etc.). This will help you accurately report income and maximize deductions​.

2. Make Quarterly Estimated Payments

As a self-employed individual, you are responsible for paying taxes quarterly. Calculate how much tax you owe quarterly and set aside funds for estimated tax payments to avoid penalties. 

This includes income and self-employment taxes (15.3% for Social Security and Medicare)​.

3. Leverage Deductions And Write-offs

Take full advantage of deductions for business-related expenses, such as home office costs, equipment (cameras, computers), software, internet, marketing, and travel expenses. 

This will reduce your taxable income and lower the amount you owe​.

4. Hire A Tax Professional

Taxes for influencers can get complicated due to multiple income streams, self-employment taxes, and deductions. Hiring a tax professional who understands the influencer business can ensure you take all the right deductions, file on time, and stay compliant with IRS regulations​.

5. Stay Organized And Plan Ahead

Avoid last-minute stress by maintaining organized records year-round. Set up a system to save receipts, track income, and monitor deadlines for quarterly payments.

Preparing early prevents surprises and ensures you have enough cash flow to cover tax liabilities​.

Final Thoughts

Managing taxes as an influencer or content creator can feel overwhelming, but you can make tax season stress-free with the right strategies. 

Keep accurate records, take full advantage of business-related deductions, and pay quarterly estimated taxes to avoid penalties. If you're unsure of your tax obligations, hiring a tax professional who understands the influencer landscape is a wise investment. 

By staying organized and proactive, you'll save money and ensure your business thrives long-term.

Platforms like Kajabi offer tools that streamline your business operations, including tax management. For instance, Kajabi's Sales Tax tools make tracking and managing sales taxes for your digital products easy, and its built-in analytics help you monitor revenue and expenses effectively. 

This is helpful when preparing for tax season, as it simplifies collecting and reporting taxes on your offers.

If you want to grow your business and need a platform that supports product creation and tax management, Kajabi offers a 14-day trial. With Kajabi, you'll have all the tools you need in one place, from content creation to sales tax tracking, so you can focus on creating valuable content for your audience.