Important Disclaimer: Consult a Tax Professional
Taxes can be complicated, and every creator’s situation is different. This article provides general tax tips, but always consult a tax professional to ensure you're making the best decisions for your business and staying compliant with IRS rules.
This is part 3 of our tax series. Check out Part 1: Tax Hacks for Creators: How to Keep MoreMoney in Your Pocket This Year! and Part 2: The Creator’s Guide to Taxes: Deductions, Write-Offs, and How to Avoid Costly Mistakes!
Introduction
No one wants to overpay the IRS, but many content creators end up paying more than they should simply because they don’t know how to optimize their tax filings. Unlike traditional employees, creators often handle taxes on their own, and without proper planning, it's easy to miss out on deductions, credits, and legal tax-saving strategies.
In this guide, we’ll break down:
- Why many creators overpay their taxes
- Essential tax filing tips to reduce your tax burden
- Key strategies to keep more of what you earn
If you’re a YouTuber, influencer, podcaster, writer, or any type of creator, these tips will help you stop overpaying and keep more money in your pocket.
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Why Many Creators Overpay Their Taxes
Creators overpay taxes for one simple reason: they don’t take advantage of all the tax-saving opportunities available to them. Here’s why this happens:
🚨 Not Tracking Business Expenses Properly
If you’re not tracking every business expense, you’re probably missing out on deductions that could lower your taxable income. Every dollar you deduct is money saved on taxes.
Solution: Use apps like QuickBooks Self-Employed, FreshBooks, or Expensify to automatically track and categorize expenses throughout the year.
🚨 Not Understanding How Self-Employment Taxes Work
Unlike W-2 employees, self-employed creators must pay both income tax and self-employment tax (which covers Social Security and Medicare). Many creators don’t set aside enough money and get hit with a big tax bill at the end of the year.
Solution: Set aside 25-30% of your income in a separate account and make quarterly estimated tax payments to the IRS (April, June, September, and January).
🚨 Missing Out on Key Deductions
Many creators only deduct big-ticket items like cameras and computers but forget about smaller deductions that add up over time.
Solution: Make a habit of tracking all business-related purchases, no matter how small, because they reduce your taxable income.
🚨 Not Taking Advantage of Business Structures
If you’re earning over $50,000 a year, staying a sole proprietor may be costing you more in taxes. Many creators overpay by not forming an LLC or electing S-Corp status, which can lower self-employment taxes.
Solution: If you’re making consistent income, consult a tax professional to determine if an LLC or S-Corp could save you money.
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Essential Tax Filing Tips for Creators
If you want to stop overpaying and reduce your taxable income, follow these tax-saving strategies:
Tip #1: Keep Business and Personal Finances Separate
Mixing personal and business finances is one of the biggest mistakes creators make. Not only does it create a paperwork nightmare, but it also makes it easier to miss deductions.
What to do:
- Open a separate business bank account and credit card.
- Pay for all business-related expenses from this account.
- Use a bookkeeping tool to keep everything organized.
Tip #2: Maximize Your Deductions (Even the Small Ones!)
The more expenses you deduct, the lower your taxable income. Many creators only focus on big purchases, but small expenses add up over the year.
Commonly Missed Deductions:
- Software & Subscriptions (Adobe, Canva, editing tools, website hosting)
- Home Office Expenses (A portion of rent, utilities, internet)
- Education & Training (Courses, books, workshops)
- Marketing & Promotion (Facebook ads, YouTube ads, website costs)
- Content-Related Purchases (Props, wardrobe, background decor, music licensing)
Pro Tip: Even a $20/month subscription adds up to $240 in deductions per year—track everything!
Tip #3: Deduct Business Travel & Mileage
If you travel for collaborations, events, or shoots, those expenses may be deductible.
What you can write off:
- Flights, hotels, Airbnbs
- Rental cars, Uber/Lyft rides
- 50% of business-related meals
- Mileage if you drive to a location for content creation ($0.67 per mile for 2024)
Pro Tip: Use MileIQ or another mileage-tracking app to automate mileage deductions.
Tip #4: Claim the Home Office Deduction (If You Qualify)
Many creators don’t take the home office deduction because they think it’s an IRS red flag. If you have a dedicated workspace used for content creation, you qualify for this deduction.
Two ways to calculate it:
- Simplified Method: Deduct $5 per square foot, up to 300 sq. ft.
- Actual Expense Method: Deduct a portion of rent, utilities, and internet.
Pro Tip: Even if you rent, you can still claim this deduction if your workspace qualifies.
Tip #5: Contribute to a Retirement Plan
Most creators don’t think about retirement, but saving for the future can also reduce your taxable income.
Best retirement accounts for creators:
- Solo 401(k): Contribute up to $69,000 in 2024 (massive tax savings!)
- SEP IRA: Deduct up to 25% of your net earnings
- Traditional IRA: Contribute up to $7,000 ($8,000 if 50+)
Tax Hack: Even if you haven’t contributed yet, you can make contributions up until the tax deadline and still lower last year’s taxable income.
Tip #6: Don’t Miss Quarterly Estimated Taxes
Creators don’t have taxes automatically withheld, so you must make quarterly payments to avoid penalties.
Quarterly tax deadlines:
- April 15 (for Q1)
- June 15 (for Q2)
- September 15 (for Q3)
- January 15 (for Q4)
Pro Tip: If you owe over $1,000 in taxes, you should be making quarterly estimated payments to avoid penalties.
Tip #7: Hire a Tax Professional (If You’re Unsure)
If you’re making consistent income as a creator, hiring a tax pro can save you thousands.
What a CPA can do for you:
- Help you find hidden deductions
- Determine if an LLC or S-Corp can lower your taxes
- Prevent IRS audits and penalties
Pro Tip: The cost of hiring a CPA is tax-deductible, so it pays for itself in tax savings.
Final Takeaway: Stop Overpaying the IRS!
The key to paying less in taxes is simple: stay organized, take all available deductions, and plan ahead. Many creators overpay because they don’t track expenses or miss legal tax-saving strategies.
By following these tax tips, you can legally reduce your taxable income and keep more money in your pocket.
Up Next: "What Happens If I Don’t File My Taxes? A Creator’s Guide to Penalties, Fees, and Fixing It Fast!"
Got tax questions? Drop them in the comments or consult a tax professional today!
About the Author
Eric Farber is an entrepreneur, author, and legal expert in the creator economy. He spent over 25 years as an entertainment lawyer, representing icons like Tupac Shakur for over 18 years and advising more than 200 professional athletes. He is the author of the bestselling book The Case for Culture and the founder of Creators Legal, the first dedicated legal platform for creators. Eric also founded Pacific Workers, one of California’s largest workers’ compensation law firms, and Viva Global, a remote staffing solution for businesses. In addition, he is the host of The Daily Creator, where he shares insights on building a sustainable creative business.
Follow Eric on LinkedIn for more insights on the creator economy, business strategy, and the future of work.
