YouTube icon

If you do not get an income tax form in the mail, creators of online content are still responsible for reporting the income earned through monetization of their content on their tax returns. Although other online stores (like Etsy and Amazon) complicate the tax process with unnecessary fees, makes tax time easier easier to access easier, more manageable, and less stressful. This allows you to concentrate on your content creation.

Tax Season Update 1099-Ks

We'll start by defining the basics. What exactly is an 1099-K? 1099-Ks are forms through the IRS which monitor transactions made with credit and debit cards by using third-party networks. Third-party processors (like PayPal, for example) are required to report the transaction they handle for their own company. If you're a content creator that accepts payments via debit or credit cards, you'll likely receive 1099-Ks in the mail as will the IRS. As the IRS has access to all of the 1099-K, it's crucial to remain transparent with regards to filing tax returns.

Gross payments

For those who don't realize what gross payment is, it's the sum of money you get before tax and deductions. Prior to recently, many content creators did not have declare their earnings because the threshold minimum for this eligibility was $20,000. In 2022, however the highest gross sum for monetizing online content was reduced 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 $600, you may not have to fill out a 1099-K.

Avoiding Hobby Classification

A hobby taxation occurs when the IRS determines that your business isn't really a business enterprise, but rather a leisure. Some content creators, especially novices to this field of work, might think it's a good decision. If it's just a hobby and I don't have to be tax liable, surely? No, absolutely no. This is actually harmful to both your profits should you are taxed if you are taxed if the IRS categorizes your business as one of those.

State Sales Tax

The last thing you need to be aware of in preparing for tax time is the state sales tax. This is crucial for creators who sell their products online as their items are available worldwide.

Meeting with a Tax Professional Tax Profession

While we can offer some helpful tips and suggestions, we don't have the expertise of accountants. Encourages all of our web creators to seek advice from a tax expert to get an opinion from an expert on ways you can cut down on tax costs, avoid any tax oversights and make tax payments easier for the taxpayer.

Tax Season is Here! From now until

This post was posted on here