The social media influencer or blogger has more power in 2021 than ever before. Internet and social media success have become more accessible, with more and more people profiting from these endeavours. Those who work hard enough on their online presence can make a decent living or even a killing in the digital world.
There are many ways a blogger or influencer can earn money—sponsorships, digital content, and affiliate marketing, to name a few. The size of their following can also play in the role of their revenue.
However, as with any profession and form of income, these are all subject to taxes. But because the earnings of an internet professional is a little more complicated than the average working professional, your tax returns may be a bit harder to address as well.
Luckily, we have compiled a list of common questions Australian influencers and bloggers may have about filing their tax returns. Here they are, as compiled by accountants for bloggers and influencers:
Do I Need to Register for an Australian Business Number (ABN)?
Influencers do not need to register for an ABN. It is only applicable if you’ve started a business. However, as your income grows, you may need to register in time. Fortunately, you can apply online for free with no hassles.
Do I Need to Worry About Goods and Services Tax (GST)?
By the time you would have to worry about GST, you should already have an ABN. You only need to include GST in your tax return if you earn more than $75,000 every financial year. The GST is about 10 per cent of all your income from your internet activities.
Are My Earnings Subject to Paying Tax?
No matter the source of your earnings in your career as an influencer or blogger, you must declare all your income. It even includes non-cash benefits, such as product sponsorships and services received. While you generally do not have to mention small gifts, benefits of substantial value might alert the ATO.
What is Instagram Tax?
Influencers are subject to what is known as Instagram tax, which applies to other platforms as well. Your income from social media platforms becomes taxable once it exceeds $600, whether from donations or sponsorships.
What Can I Deduct?
Like any other industry, certain expenses you pay for in the name of work are exempt from tax. For influencers and bloggers, this can mean the following:
The cost of a new computer
A digital camera
Home office equipment, including HVAC costs
Communication equipment, such as phones and tablets
Travel expenses for work
Education costs related to your work like video editing courses or photography classes
However, you must be certain that your expense is deductible; otherwise, you may be subject to an audit by the ATO. We highly recommend you consult accountants who specialise in managing income for bloggers and influencers if you are unsure.
Taxation is not easy for any profession, but it can be more complicated for internet professionals. That is why you need the help of accountants and bookkeepers. You must make sure you are compliant with all rules and regulations, so your income never falls under scrutiny and risk.
It will greatly help you to hire an accountant for bloggers or influencers, especially if it’s your full-time job and you require someone to handle your taxes. Similarly, you could send The ECommerce Accountant a message. We can help make things easier for you so you can keep doing what you love!