Everything you should know about tax deduction for bloggers and social media influencers in 2022

Following the pandemic, there has been a growth in remote working. Similarly, there has been an increase in social media influencers. This job allows you to express yourself and makes you in charge of your destiny. In addition to these, it also comes with tax deduction benefits. Read on to learn the benefits associated with social media influencers. 

What Qualifies As Tax Deductible Charges?

1. Home Office Deduction

You are allowed to claim a home office deduction If you work from home. This allows you to write it off. A portion of your rent, mortgage interest, and home insurance can be used for a tax deduction.

Few things to keep in mind:

• Your primary place of business should be your home office. You can only claim the area that you use for work.
• You can either claim this tax deduction by using the simplified deduction method or an itemized deduction. The latter involves tracking actual expenses and is more time-consuming.

2. Travel Expenses

Any flights, whether international or domestic can be used for a tax deduction if they were work-related travel. This also applies to several other modes of transport such as taxis, and hotels amongst others. But, you can only claim if these expenses were done away from your “tax home”. 

3. Advertisement and marketing

For social media influencers, advertising is very crucial. The good news is that you can claim a tax deduction on it. These comprise Google Adwords and Facebook ads amongst others. 

4. Business-Related Education

If you are going to go for courses to improve your skills as a social media influencer, you can get a tax deduction on them. These include social media marketing or photography courses. You can get a tax deduction on almost everything involved. Money spent on books, courses, materials and transportation is eligible.

5. Office Supplies

Any office supplies you may buy are eligible for a tax deduction. Examples of such supplies can be,

• Notepad.
• Printer ink.
• Stationary.
• Paper.
• Whiteboards.

This depends largely on which type of social media influencer you are. For example, vloggers can claim a camera and laptop.

6. Business Insurance

Business insurance will cover you against unforeseen events. This covers a lot of insurance you take to protect your business. Any insurance premium related to your business can be used for a tax deduction. 

7. Website costs

Being an influencer, you may need a website. This helps you reach a wider audience. It also lets you promote your services. If you pay for a website, you can write off the following expenses.

• Hosting fees.
• Cost of the domain name.
• Cost of plugins.
• Cost of themes.

8. App costs

Just like the website, any costs involved with an app are deducted. These involve tax accounting software, social media management tools and more.

9. Legal fees

Just like any business, social media influencers pay legal fees. You can avail of tax deductions for starting up and also managing your business.

10. Bank fees

It is advised to have a different bank account for your business. This allows you to get tax deductions on such bank fees,

• Transfer costs.
• Service fees.
• Overdraft expenses.

11. Giveaway expenses

Giveaways are very important if you are a social media influencer. When you do giveaways to fans you can get tax deductions on them. 

12. Clothing and Beauty Products

If you are an influencer, looking good on camera is very crucial. Hence, buying clothes consumes a good amount of money. The following can be used to get tax reductions:

• Beauty products such as hair products, tools or even haircuts.
• Lingerie for only fans content creators or models.
• Sportswear for working out.

13. Charity Donations

If you donate money or items to a charity, you can get tax deductions. You need a written document to prove this from the charity to get the benefits.

14. Tax advice

Tax is a hard-to-understand concept. Also, it takes time to figure out. Hence, social media influencers hire tax advisors. This comes at a cost but you can get tax deductions for this. This allows you to save a lot of time and save on the money paid for tax advice

15. Phone bill and internet

As an influencer, your phone bill or internet is one of the highest expenses. This is because you talk to many people and upload/download files on a regular basis. You can get a tax write-off on this.

If you have a separate business phone it will be fully deductible. But, if you have a personal phone which you use for business-related work, you can get a partial deduction. 

How to make the most of Tax deductions?

Being a social media influencer can get expensive. So, here are some tips and tricks to take full advantage of tax deductions.

• Keeping track of expenses

The best way to not miss out on any tax expense is by tracking all of them. You can use physical or digital journals to do so.

• Get receipts

Another tip would be to get receipts for every single payment. Any tax deduction requires receipts to back up the expense. Hence, collecting receipts for every expense might be a good practice.

• Tax advisors

Tax advisors provide great help. They make sure you get the maximum number of tax deductions. In addition, they ensure you meet the criteria for tax write-offs. This saves you time and effort. 

Conclusion

Being a self-employed social media influencer, you need to make the most of tax write-offs. This reduces your taxable income. This exercise requires time and effort but it saves a good chunk of your income from being taxed. 

This is why financial advisors at Piramal Finance are in high demand. They provide financial advice and help you manage your finances. There are many articles and blogs to help you learn more about the world of finance.