Hey babes!

It’s tax season and there are always so many questions surrounding this topic. How do I file? What do I file? What do I need to report, etc. I’m gathering all my notes of things I’ve learned over the years and sharing some tips & tricks. Disclaimer: I am not a tax accountant and you should reach out to a CPA for tax advice. They will be able to help you with all the details and potentially save you money.

This is my 2nd year filing as a full time content creator. These tips generally apply to any freelancer, content creator, blogger, influencer, etc. Hopefully this will clear up some confusion you may have and help ease your stress a little. Here we go:

THINGS TO KNOW:

As a freelancer of any kind, when you get paid, taxes are NOT taken out. You are responsible for paying taxes on your earnings made throughout the year.

FORMS TO KNOW ABOUT:

Throughout the year when you work with different brands, you may be asked to fill out a W9. This is for contractor work. So you are not an employee for the company, you are just completing freelance work.

During tax season, the brand will send you a 1099 to file with your taxes when the time comes. From my experience, not all brands send these. Typically, you need to report any income that was $600 or more from one brand throughout the year.

For example:

Brand A: Collab 1 $200, Collab 2 $200 - this is less than $600 so you will prob not receive a 1099

Brand B: Collab 1 $500, Collab 2 $600, Collab 3 $700 - you will receive a 1099 to report the income at the end of the year because you made more than $600 with the brand.

Rule of thumb: If you are receiving a 1099 from a brand, you need to report that income because they are reporting your name to the government saying they paid you $XXX and that you are responsible for the taxes on the payment.

PART TIME GIG:

If this is your part time gig meaning you still have a full time W2 9-5 job, here are a few tips on how to report your income from your side hustle:

You will want to look into a SCHEDULE C (click to see the government’s definition)

With a SCHEDULE C, you are basically reporting a lump sum as a sole proprietor.

The way to find this number:

• add up all your earnings (net income)

• subtract your business expenses (see list below for what could potentially be a write off)

• The remaining number is your profit (or loss) and that is the number you report

FULL TIME GIG:

If this is your full time gig, it gets a little more complicated. I highly recommend hiring a tax accountant as this point to advise you on all best practices.

For me, I pay taxes monthly (others pay quarterly) to stay on top of it so you don’t owe a huge amount at the end of the year.

Best Practices during the year:

• Set up a business account at your preferred bank so you can keep track of all expenses

• Look into registering your business (LLC, S-Corp, etc. I am personally registered as an S-Corp but a lot of my friends are registered as LLCs. They each have different fees / tax benefits associated with them)

• Apply for an EIN (employer identification number) - This is a number given to you that you can write down on your tax forms instead of your social security number which is good to protect your identity

• Track expenses - quickbooks, excel sheet

• Track all your income

• Set aside 15-20% of income to pay for taxes

• Keep receipts

When filing for taxes, you use the same method listed above:

• Add up your total income (net income)

• Subtract all your expenses (see list of potential expenses below)

• The final number is the number you report to be taxed (my tax accountant helps me with all of this because it does get complicated)

NOTES FOR 2020 RELATED TO UNEMPLOYMENT / THE PANDEMIC:

• The stimulus payments are not taxable income therefore you do not get taxed on them

• Unemployment is taxed at a federal level (make sure you’re getting taxes taken out if possible)

• Recovery Rebate: If you did not receive any of the stimulus checks, when filing your 2020 taxes you can file a Recovery Rebate. If you owe money at the end of the year, it could be deducted from this number.

• (As of 3/10/21) The most recent covid relief bill was passed and it included that the first $10,000 of unemployment you received in 2020 is not going to be taxed. If you’ve already filed, you can submit an addendum to have this added to your taxes. If you have not filed yet, you can file an extension to make sure the law has been put into effect to make sure this reflects on your taxes.

• Golden State Stimulus: California passed an additional stimulus bill that you will receive either $600 or $1200 after filing your 2020 taxes.

POTENTIAL WRITE OFFS / EXPENSES:

This is a list of suggestions. Make sure you consult an accountant to make sure you are reporting everything accurately. Essentially as a “lifestyle” blogger, you are constantly investing in your business which happens to be yourself. Again, this is just a list of potential items you can write off:

• Auto Expenses (Car insurance, car interest, lease payment, Registration)

• Track your miles

• Meals (alcohol is not included) - if you’re having a meal and discussing business topics, it is considered a business meeting

• Travel for work - if you travel and create content on the trip, it can be considered a work trip where you can expense these items:

  • flights

  • hotels

  • meals (no alcohol)

  • potential shopping purchases

• Work equipment:

  • Laptop

  • iPhone (if you use your phone to take pictures, edit, post on socials for work)

  • Apps (any apps for editing, posting that you pay for)

  • Ring Lights

  • Backdrops / Backdrop paper

• Makeup

• Clothing (for work that you are posting, considered as costume)

• Nails

Again, this is just a suggestive list. Please consult with your accountant for best practices.

I know this was a lot of information, but hopefully it helps you get started with your taxes and feel a little more comfortable tackling them. Feel free to dm me any questions on my INSTAGRAM or you can leave a questions in the comments below and I will do my best to answer them!

Xx, Allysa

Resources:

Golden State Stimulus: https://www.ftb.ca.gov/about-ftb/newsroom/golden-state-stimulus/index.html

Most Recent Stimulus Bill: https://www.cnbc.com/2021/03/10/stimulus-update-house-passes-1point9-trillion-covid-relief-bill-sends-to-biden.html

Schedule C tax form: https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

What is a Schedule C: https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

All general tax information: https://www.irs.gov/