YouTube icon
Although you may not get any tax forms in the mail, online creators are still responsible for reporting income from monetized content on their tax returns. Although other online stores (like Etsy and Amazon) complicate the tax process with unnecessary fees, makes tax season more manageable, more accessible, and less stressful. This gives you more time to focus on the content.
Tax Season Insight: 1099-Ks
We'll start by defining the basics. What exactly are 1099-Ks? 1099-Ks are forms through the IRS that track debit and credit card transactions made through third-party networks payments. Processors that are third-party (like PayPal, for example) will report the transactions their company processes. If you're a content creator and accepts payment via debit or credit cards then you'll most likely get a 1099-K in the mail and so will the IRS. As the IRS will be receiving every one of your 1099-Ks it's essential to be transparent in filing tax returns.
Gross Payments
For those who may not know, gross payments comprise the total amount you make before taxes and deductions. Up until recently, many content creators didn't have to worry about reporting their income--since the threshold for this qualifier was $20,000. In 2022, however the amount of gross compensation for the monetization of content online has been reduced significantly to $600.
With this transition, most online professionals--freelancers, artists, vloggers, and creators--will receive a 1099-K. A helpful tip in preparing for tax season is to record the money you make throughout the year, making gross income easier to file. If you fall under the $600 mark and you are not a tax payer, then you do not need to fill out a 1099-K.
Averting Hobby Classification
A hobby classification happens an instance wherein the IRS decides that your company isn't really a company, but an activity. A few content creators, specifically people who are new to this field of work, may consider it's a good decision. If it's a simple hobby and I don't have to pay taxes surely? Absolutely certainly not. Actually, it's harmful to you and your income when the IRS considers your company to be an entity that is classified as.
State Sales Tax
Another thing to be aware of while preparing for tax season is that there is a state sales tax. This is especially important for creators who are online since their product is sold globally.
Get with a Tax Professional
We can provide advice and helpful tips, we are not accountants. Encourages all of our web creators to seek out the assistance of a tax expert to gain professional advice on how you can save money on taxes, prevent tax omissions and simplify the process of tax-paying easier.