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All You Need to Know about Influencer Accounting and Your Taxes

We live in a world today with an influx of influencers left and right. Influencers have paved the way for more effective marketing. This is why many aspire to be one.

One of the questions is whether influencers and bloggers pay their taxes? Yes, they do.

Certain items must be subjected to tax, such as gifts, partnerships, promotional ads and posts, and products in exchange for reviews.

If you’re getting into the business of influencer marketing, dealing with taxes is important.

When Should Influencers Learn about Influencer Accounting

It’s ideal for influencers to start learning about influencer accounting after being on the platform for a year. They should learn about what taxes entail, how to deal with the deductions, the income tax withheld by the company, and how to deal with non-deductible expenses.

This way, the influencer learns how to keep track of all the expenses incurred, such as events, travel, and software. Then, they should learn how they can be deducted, as well as how to submit the tax return properly.

Tax Deductions for Bloggers and Influencers

Influencers can qualify for the same tax deductions as other small business owners and self-employed people. These deductions can save you money when you pay taxes, but there are a couple things to know about them.

To be able to deduct a business expense, it must be both ordinary and necessary. An ordinary expense is one that is accepted and common in your business. A necessary expense is one that is helpful and appropriate for your business.

Some of the most common deductions that influencers can take advantage of are:

  • Clothing

Fashion influencers can write off clothing as a business expense. However, before you go on a shopping spree, remember that you need to be able to show that the clothing is necessary for your job.

  • Education

If you use online courses and seminars to improve your blog business, you can write off the expenses related to them. You can also claim any expenses for online media subscriptions that you use for blogging as tax deductions.

  • Home Office Expenses

You can claim some expenses for your home office. For example, if you use a portion of your home for your business, you can deduct a portion of your rent and any other expenses that you pay for your home office.

  • Supplies and Professional Services

If you need supplies to run your business, you can write those off as business expenses. You can also deduct any expenses for marketing your business and professional services that you pay for, like legal or tax advice.

  • Traveling

If you travel for business, including airfare, food, and entertainment expenses for business purposes is likely a deductible business expense. For example, if you travel to promote your blog, you can write off your airfare, food, and other expenses.

The Bottom Line

Becoming an influencer is easy. You can be one in less than a month. However, to be successful in the long-run, it is important to learn how to keep track of your income and your expenses. It’s also important to know how to deal with taxes. Knowing how to deal with taxes, as well as keeping up with your influencer accounting is important to your business.

Are you looking for an influencer accountant? The Ecommerce Accountant is your business advisor for online stores and influencers in Australia. Get in touch with us.

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