Social media influencers, bloggers, and vloggers appear to be promoting many brands these days. Because social media influence is so prevalent, many mistakenly think it is a pastime rather than a profession.
If you are compensated for your services, you are considered a working professional and must pay taxes. However, due to the novelty of influencer marketing, it may be challenging to manage Australia’s tax rules.
That said, hiring a tax accountant may prove to be helpful. Here are some reasons you should consider getting one:
1. Navigating Taxes
Most likely, you may not know the entire amount of money you receive. Because of this, keeping track of all of the payments is essential. It indicates that you were in contact with and compensated by a company that practised meticulous accounting, mainly when dealing with numerous suppliers.
As an influencer, you are subject to the Instagram Tax, which applies to everyone who has a presence on social media, not just on Instagram but also on other platforms.
2. Keeping Proper Tax Records
Determining which of your expenditures may be deducted from your taxable income is difficult. To be eligible for a business expenditure deduction, you must use the money for work-related reasons alone.
As an influencer based in Australia, your responsibilities are the same as those of any other Australian citizen. You should follow individual Income Tax Rates published by the Australian Taxation Office (ATO).
Of course, when you fill out your tax return, you’ll have the opportunity to include certain tax deductions. Some things you’ve bought and paid for are likely to have some connection to your influencer role. As a result, you may write them off as tax deductions if the seller or brand doesn’t repay you. Expenses that you paid for with your own money are also eligible for a tax deduction.
3. Filing Accurate Tax Returns are Essential for Social Media Influencers
Tax season is not pleasant for social media influencers. Managing your money may be difficult, but don’t let it ruin your future. The good news is that professionals can help. They’re able to help you organize your income and expenditures for the next tax season.
A tax accountant can help here, as you cannot afford any mistakes on your tax return. Incorrect tax return completion may have severe repercussions. Always correct any errors and inaccuracies as soon as feasible. You may contact the ATO to rectify the mistake.
Inaccurate tax return declarations may result in administrative fines. They include withholding amounts that cause tax obligations. The penalties range from $110 to $210, which is why you should always complete your taxes correctly.
4. Helping You Differentiate Your Expenses
If you’re a new influencer, you’re probably not sure what costs you may deduct. This is problematic for your revenue since you are entitled to certain deductions that may result in company losses if not claimed.
A tax accountant can help you separate personal and business expenditures. For example, you may deduct a portion of your rent, internet, and phone bills if you work from home.
You should realize that the total amount you may claim is capped. As an additional suggestion, try segregating your personal and company finances. Having two separate bank accounts for these expenditures helps your tax accountant determine your income and business expenses, and therefore what deductions you qualify for.
5. Informing You In Proper Tax Declaration
A tax accountant can help determine which PR packages are small donations and which will draw the ATO’s notice. To be clear, the presents you got were from companies with which you collaborate, not personal goods that you attempt to avoid paying taxes on.
Freebies from various businesses are a key reason why more individuals are getting into influencer marketing. Granted, these items are given out as part of company public relations in hopes that influencers would promote their goods on social media. To be safe, it is advisable to employ a tax accountant to handle these issues.
Conclusion
There seems to be an abundance of bloggers, vloggers, and others promoting various brands today and age. Since social media influence has become so widespread, many people mistake it for a pastime rather than a profession. However, as long as you are compensated for your services, you are considered a working professional and pay taxes.
While you continue to manage your social media activities, you may wish to free your mind away from your company's financial situation. If you are searching for a reputable eCommerce accountant, you can always depend on us here at Ecommerce Accountant to deliver. We offer high-quality eCommerce accounting services and dropshipping, bookkeeping, and other related services to our customers. For additional information, please contact us now!