Content Creators: How to File Taxes as a Freelancer

Ines Zemelman, EA
Ines Zemelman, EA
• 26.10.21 • 5 min read
Content Creators: How to File Taxes as a Freelancer

One can only envy the life of a freelancer. You are neither bound to report to a boss nor do you have to worry about getting dressed for work every day. Besides, you can take afternoon naps when the mood strikes you.

Freelancing is liberating. The number of Americans who work as independent contractors is expected to rise dramatically over the next decade. Freelancing is a great way to supplement your income even if you already have a full-time job.

However, let's get down to business: You'll have to file taxes differently if you're a full-time freelancer or just starting a side business. And if you don't pay attention, you may find yourself paying a significant portion of your freelance income in taxes.

Tax on Freelance Work

If you work as a freelancer, you must earn $400 in order to file a tax return. To be clear, this does not apply to people who are paid on W-2s and call themselves freelancers. Accordingly, it's true for freelancers who get paid in full for all of their work, have no taxes withheld, and file 1099 to report their earnings.

While you may not owe any federal income taxes, freelancing entails paying self-employment taxes on top of your regular income taxes. You are required to pay self-employment taxes when you make $400 or more. As a result, if your income is $400 or higher, you must file a tax return.

What Are Independent Contractor Taxes?

The Internal Revenue Service considers you to be an independent contractor if the business or person who pays you has the power to control or direct only the outcome of your job, rather than what you'll do or how you'll accomplish it.

If you're self-employed, you'll also have to pay self-employment tax on top of your regular federal income tax bill. Most wage earners have their Social Security and Medicare taxes taken from their paychecks. The self-employment tax includes both of those taxes as well. 

The self-employment tax rate is 15.3%, with 12.4% going to Social Security and 2.9% going to Medicare. Self-employment tax and income tax must be paid to the Internal Revenue Service directly unless you are paid as a W-2 employee. For the most part, this is done with quarterly estimated tax payments.

How to File Taxes as a Freelancer?

Gathering and reporting all sources of income should be your first priority as a freelancer. Having many revenue streams is common among freelancers.  If you're self-employed, it's more difficult to keep track of all your income.

This happens because you would not receive a W-2 form for tax purposes as a regular employee would. You will likely receive a 1099-NEC form, previously known as a 1099-MISC, from each of your clients.

Your own boss is a nice feeling until tax season rolls around. Freelancers will also have to pay a 15.3 percent self-employment tax in 2021 in addition to their regular income taxes. So here is what you need to file taxes as a freelancer.

1.      Consult a tax expert.

2.      Determine what you must pay and how much.

3.      Pay your quarterly estimated taxes.

4.      Make certain that your tax preparer is familiar with how you conduct your business.

5.      Learn which expenses you can write off.

6.      Maintain receipts, ideally digitally.

7.      Submit your expected tax payments on a quarterly basis. 

Content Creators: What Can You Write Off?

Content creators are difficult to define, so we'll employ a broad definition. The people who generate money on social media through advertising or sponsorship are considered content creators. Freelance content creators include entertainers and promoters. 

Regardless of where you stand in those two categories, one thing is clear: being a content creator today is more rewarding than it's ever been. Create your own material or create content for others if you are skilled in writing, videography, photography, design, or social media. You should keep track of any business expenses you incur when creating content if you want to deduct them from your taxable income and keep more of your earnings.

Here is a list of tax write-offs for content creators:
  • Gear and Equipment

  • Software

  • Phone Bills

  • Electronics

  • Expenses related to Websites

  • Marketing Costs

  • Inventory expenses

  • Shipping Costs

  • Professional Development

  • Professional Services

  • Bank Fees

  • Payment Processing Fees

In case you are working from home, you could deduct these expenses.
  • Internet

  • Utilities

  • Rent/Mortgage

  • Property Taxes

  • Insurance and Maintenance

  • Home-office Expenses

The list further expands if you are meeting your clients for content creation purposes. The costs related to this are tax-deductible.
  • Office Rent

  • Food and Beverages

  • Traveling

  • Accommodation