What Bloggers, Vloggers and Content Creators Need to Know About Taxes

If you frequently earn money as a blogger, video creator or influencer, you must file a tax return. Figuring out the right way to do so can be hard.

Over the past decade there’s no doubt that many content creators have made a transition by being considered ‘hobbyists’ to become serious, high earning professionals. With that however come financial complications they often haven’t considered, especially at tax time.

And once again, it’s almost that time when you must gather all of your financial and tax documentation and complete those annoying tax forms. Do you want to optimize your tax savings and stay away from the most frequent errors made while submitting income tax returns? Then read on.

It might not always be as simple as it first appears to file taxes. In fact, as thousands of people discover every year, it absolutely isn’t. It is often a challenging process, and errors on your returns are not hard to make, especially if you, like so many people, have turned to online content creation in the form of blogging, vlogging or social media influencing to supplement your income – or maybe even to earn you primary wage.

Do I Really Need to Declare My Earnings At All?

If you frequently earn money as a blogger, video creator or influencer, you must file a tax return. It is not considered regular income if you have only authored two blog entries this year as a hobby though. It’s like selling a few pairs of shoes on Kijiji doesn’t qualify you as a shoe store owner.

If, on the other hand, you write paid articles once a week, or once a month or frequently post sponsored content to your Instagram profile, this is considered regular revenue and must be reported on your tax return.

You’ll Need to Declare All of Your Content Creation Income

It can be difficult for self-employed people, particularly bloggers and influencers, to identify how much money they really make. Your reported income should, of course, include the amount of money you get paid directly for your services as a content creator, but it should also include a number of additional factors that may not be immediately obvious even to you. These may include:

• Revenues from Google Adsense, YouTube, Instagram, Twitch etc.
• Affiliate Commissions
• Patreon or other similar subscriptions you offer
• Merchandise sales (even if it’s just a few stickers)

You’ll also need to include the value of products, services, trips etc. you received in exchange for reviewing, mentioning or promoting them.

In other words, if you receive a lipstick to test and can keep it afterward, you must report the sales price on your income tax return.

Claim As Many Deductions As You Can

In addition to ensuring that you declare all of your income as a content creator, you’ll also want to make sure you claim all of the deductions you are entitled to at tax time.

For starters, you almost certainly couldn’t accomplish your work – whatever it is – without the Internet. As a result, you may be able to deduct a portion of these expenses.

Things like hosting charges for your website or blog, Internet access fees, and even costs associated with search engine optimization services, accounting services and professional subscriptions also fall into this category.

Other costs, such as those associated with owning pricey software such as Adobe Photoshop, are classified as capital property and can thus be deducted at 50% in the year of purchase.

The same is true for whatever equipment you need to accomplish your job as a content creator – cell phones, laptop computers, and cameras are all examples of capital property that you can deduct. However, you must deduct the cost of these items over several years as the property’s value depreciates.

If you work mostly from home, you can deduct a percentage of your home expenditures (insurance, property taxes, mortgage interest charges). The amount you can claim, however, is determined by the percentage of the overall space you utilize entirely for your business.

What If My Pay is in US Dollars?

If you are a content creator, you may be solicited to work for, or for collaborations or partnerships by US companies, and you will most likely be compensated in US dollars rather than Canadian dollars. Alternately you may also work with those from other countries as well, and effectively be paid in their currency.

In this instance, you must convert all of your foreign income into CAD before filing your income tax return. If needed you can make use of a currency convertor like this one from Bank of Canada to do so.

Make Use of a Tax Calculator.

It’s never a bad idea to understand your tax situation ahead of time, especially if you’re self-employed. A tax calculator will estimate how much money you may owe, allowing you to budget accordingly.

Finally, if your content creation income is becoming one that is more akin to a full time wage then it may be time to consult with a professional chartered accountant. They can be very helpful at tax time of course – we can help determine just what you should and should not declare, and help you claim everything you are entitled to – but that’s not all.

An accountant can also help you determine when or if you should formally incorporate a business, how to execute effective tax planning, how you can ensure that you save enough for important life events like retirement or buying a home and much more. You can contact us today to learn more about how we can help you.