Content Creator

Tax Strategy One Pager

The Greenroom Resource is committed to providing clarity & insight to our clients.  Each industry faces its own challenges in navigating taxes and IRS rules.  This is particularly true for content creators whose business is primarily via YouTube, Instagram, TikTok or other digital platforms.  The below issues are just a few of the specific rules that need to be properly navigated by creators using an overall strategy for maximizing tax deductions.

Rent / Home Office

• The Home Office Deduction is based on a percentage of the home (owned or rented) that is used solely for business purposes.  To prove this deduction, a business must have documentation of home related expenses and a square footage of the business use and the home as a whole.
• Creators often document their lives, and as such use their entire home. This creates complexity when determining what percentage of rent can be deducted.

Vehicle Deduction

• Vehicle usage is similar to the Home Office Deduction above in that a vehicle can only be written off according to the percentage of business use.
• The IRS releases a mileage rate annually. For 2020 the mileage rate is 57.5 cents per business mile. We can help navigate apps that have been created to help you keep track of your business miles and maximize this deduction.

1099s / Giveaways

• Any person or business other than a corporation providing a service or who receives compensation of $600 or more in a year needs to be sent a1099 if you are to receive a deduction.
• Creators must have a system to issue 1099s at the end of the year to editors, cameramen, production assistants, or anyone who received a prize.

International

• Any creator doing business in the United States will be subject to US tax laws and compliance.  Without proper planning this could mean a withholding of 30% from any revenue generated in the US by a nonresident alien.
• Many creators engage the services of providers and send compensation to individuals outside of the US.  The IRS requires reporting of most income paid outside of the US for services or prizes based on complex layers of international tax treaties.
• Because each country is different and each payment type may be treated differently there is no “one size fits all” advice for international transactions. A tax advisor is needed to navigate these waters.

The Greenroom Resource works with clients to create a comprehensive plan designed for tax efficiency and so that clients are not at an elevated risk in the event of an IRS or state audit.