Last week, we talked about forming your LLC (Limited Liability Company), and today, we are going to start prepping for the next tax season. I know it seems like we just finished filing our 2021 taxes, but if you aren’t working a traditional 9-5 job and are getting paid via 1099, it’s never too early to prep for the next tax season.
Again, let me say: I am not an accountant, tax preparer or lawyer. I am more than happy to give you the information I’ve learned and collected over the years, but I am not an expert. I am a content creator, like you. So please make sure to do your own due diligence and talk to a professional!
Okay, let’s get into it!
Tracking Your Income AND Expenses
If you know anything about me, you know I’m addicted to Excel spreadsheets. From planning vacations and itineraries to tracking every single penny I spend on my biz, I turn to Excel.
If you’re a busy mom, keeping all those receipts and spending time filling out an Excel sheet might sound impossible; so another great option is getting a business card and linking it to Quickbooks, which does all the tracking for you. You just go through it once a month or once a quarter and organize.
Services like TurboTax can pull directly from Quickbooks and you can also download this information for your accountant. (More on that in a minute)
Did you drive somewhere to take pictures? Track it
Did you pay for tickets to a beautiful flower field for a viral reel? Track it
When all those brands finally paid you after Net 30-120 completion? Track it
If you’re sending brands W9’s, they’re sending you 1099’s for the upcoming tax season. You want to know how many 1099’s to expect so you don’t file too early!
It’s a lot of work, but it is part of the bigger picture of treating this like the real job it is.
Write Offs For Any Tax Season
Depending upon your niche, you could deduct personal expenses if you use them during content creation; these could look like:
- Makeup
- Haircare products
- Skincare
- Clothing
- Jewelry
- Food
- Furniture
- Your home office
You can also write off:
- Management tool subscriptions
- Cost of running ads (on any social media platform)
- Content creation tool subscriptions (InShot, Tezza, Lightroom, Canva Pro, etc)
- Production costs
- Audio and visual equipment
- Blog content writing costs (domain costs, email marketing platforms, etc)
- Social media manager costs
Did you run a giveaway?
You can write off the buy in.
Hire a Virtual Assistant for various tasks?
Write off.
Internet, Phone, Computer
Best practice is to track anything and everything you use when creating content and let a bookkeeper help you sort through it all. You don’t want to have to owe more than you need.
Set Aside Money For Tax Season
Here’s where I lose a lot of people. Setting aside money for taxes. I get it, some of us live paycheck to paycheck and this isn’t a realistic expectation. And sometimes, it’s totally valid to treat yourself when you get a big payday, because life is too short and we deserve nice things. But, in order to avoid owing more than you have after filing, it’s ideal to put aside 30% of every invoice for taxes.
What does this look like? Let’s say the brand paid you $1200, you put $360 away (bonus points if it goes into a High Yielding Savings account) and keep $840 for bills, expenses or fun.
If that seems too unrealistic, start with $200.
This helps avoid that sticker shock feeling in April.
Make Sure Your Accountant or Bookkeeper has Small Business Experience
If you’re still getting started or doing content creation part time, TurboTax and H&R Block online services have great options for small businesses. You will need to pay for an upgrade since you’re using 1099’s and doing write offs, but this cost is also a write off for next year.
Once you’re making a substantial salary, one comparable to what someone would consider a typical “job,” I’d recommend finding an accountant and bookkeeper to help you file and make the most of your deductions. Again, their services are also a write off for next year’s taxes.
I hope this helped! As always, you can subscribe to my email list for more weekly social media tips. For more information on this topic, check out these blog posts:
- Filing an LLC As A Content Creator
- Filing an S-Corp As A Content Creator
- How To Know If You’re Ready For Social Media Management
- Why You Need A Business Credit Card
