YouTube Taxes Explained! 10 YouTube Tax tips | RISING HUNKS
Today we’re talking about YouTube taxes and what you need to know as a content creator. So I’m gonna be answering your most asked questions when it comes to the situation of YouTube taxes and where your tax responsibility is.
Do YouTube pays any of your YouTube Tax?
One of the first questions I get asked is whether or not YouTube pays any of your taxes and the answer is no. YouTube does not pay any taxes for you. They do not take any taxes out of your YouTube earnings or your ad revenue.
You are completely responsible for your YouTube taxes. When you become a YouTube content creator and you’re monetizing your content, you are not an employee of YouTube, you actually are an independent contractor getting a 1099 form and so they will send this to you directly.
You’ll need to file that with the IRS if you live in the United States or again, the tax agency in your country and you will need to pay those taxes yourself. So just kinda keep that in mind. This is also true if you make affiliate revenue on YouTube.
You will need to pay the taxes on your affiliate revenue with all the different affiliate programs you are doing. You will also need to pay the taxes on any sponsorship and brand deals. So all of your YouTube ad sense, whether that’s Super Chats, the ad revenue, YouTube premium channel memberships, all of it is taxable income and you will need to pay that.
YouTube Tax on equipment for your channel?
Question number two, can you deduct purchases like equipment for your YouTube channel? Yes, if you are using your equipment and any of those purchases in your job as a content creator, the business that you are doing, then you can actually deduct those things. You can go ahead and claim them.
They just need to be essential, reasonable, necessary to your business and if you can say that honestly, you can go ahead and you can claim those deductions. Just make sure you’re keeping your receipts for everything and try to do proper bookkeeping.
When do you need to pay YouTube taxes?
Question number three, when do you need to pay YouTube taxes? What if you’re a smaller You Tuber? Do you need to pay taxes? And the answer is yes.
Technically here in the United States, you need to report and claim all income but if you make $600 or more, you absolutely have to claim it on your taxes.
Consider YouTube a business and save YouTube Taxes?
Question number four, when do you need to consider YouTube a business? How much money do you need to make before YouTube is a business? Well, it’s really not about how much money you’re making, it’s about your intentions.
If you are making money with YouTube as a hobby, you still are gonna have to claim the income, so you’re going to have to pay and file those taxes. But regardless of how much income you’re making, if you consider YouTube to be a business and a business opportunity for you, then you need to treat it like that and you need to handle it appropriately.
The good news is, as a business, you would qualify for deductions and that could actually save you on your taxes so you can save a little bit money if you think about it as a business.
What can I deduct from my YouTube Tax?
Question number five, what can I deduct as a YouTube content creator from my taxes? Well, again, these need to be reasonable and necessary expenses for your business.
So if you decide to buy an online course to learn about YouTube, you decide to hire a YouTube coach like me, you can deduct those expenses from the business as reasonable and necessary.
Obviously if you buy camera gear, lights, audio, those things can be deducted from your business. If you are a travel content creator, as long as you really and truly are going there and traveling for the purposes of business and filming content, let’s say it’s a collaboration, then yes, you can claim those things on your taxes as long as you can say and prove that they are reasonable and necessary expenses for your business.
How should you set aside for your YouTube Tax?
Question number six, how much should you set aside for your YouTube taxes? Now, tax rates vary from place to place, country to country and even state to state, here in the U.S and so you will want to look into what the tax rates typically are at a state level.
Maybe your state doesn’t even have income taxes, business taxes. So just look into those things but the rule that I usually play by is to set aside 30% of my overall income for taxes and the way that I usually approach it is I take that 30% the moment I receive money, the moment I receive payment, I take 30% and I set it aside.
Now this is probably more than necessary but it does mean you have coverage and it means that you won’t have a lot of anxiety around this later, so just take that with a grain of salt.
Should I have to pay YouTube taxes quarterly or yearly?
Question number seven, should I pay taxes quarterly or yearly? Now this one is tricky for a lot of people but something that my friends at TurboTax Self-employed recommend is that if you making over a thousand dollars a month, they’re gonna recommend that you do pay your taxes quarterly.
If that’s what makes sense and that’s also what is recommended to you by a CPA, then I think you should absolutely go with that guidance and that advice. The most important thing is just to make sure you’re setting aside money for your taxes so that that amount of money that you owe doesn’t pile up and that you are paying it.
Is necessary directed to pay YouTube taxes?
Now, question number eight isn’t necessarily directed at taxes but because people are realizing they have to set aside money for their taxes.
A lot of people ask me if they should set aside any other money from that income that they’re making as a content creator and I absolutely believe that is more than responsible to not only set aside maybe 30% for your taxes but some additional money to just cover operating costs and to have money to reinvest into yourself.
What I typically do is set aside another 10 to 20% that I can take away from my overall income and in my case, I like to put these into my retirement accounts where I can get additional tax benefits. In my case, I set this aside into a Roth IRA and also into a SEP IRA, which is a Self Employed Pension.
So look at where you can gain some tax advantages by talking to a professional and realize that there’s a lot of benefit to going ahead and putting something away for your retirement and your future. The odds are you’re not gonna be a YouTube content creator forever. So plan for that.
Do you need to become a full time creator to tackle with YouTube Tax?
Question number nine, do I need to be a full time content creator to incorporate as a business? No you don’t, and there may be a lot of reasons that you might wanna incorporate, either as an S corp or as an LLC. There can be a lot of tax advantages to this as well.
So again, talk to a professional and see what makes the most sense for your current situation but you do not have to be earning a full-time living as a content creator before you decide to incorporate as a business or treat it like one.
Should you separate YouTube business from your personal finance for YouTube Tax??
Finally, Question number 10, how should I separate my accounts in terms of my YouTube business from my personal finance? And I love this question because it’s something most people don’t think about.
When you are conducting any type of business or business venture, you really wanna make sure that you have bank accounts that are separating the business from your personal. You do not want to commingle these finances. You want to really create a clear division with these.
What I tend to do is this, I have an account that’s set aside just for my taxes, for me to put that money there and also for me to pay the government what they need directly out of that account and touch no others.
I also have an account just for my business where money comes in for the business and where I also do any payments and any expenses that the business has. So whether I’m purchasing equipment, it comes out of that one account, that’s it.
If I have freelancers I need to pay, it comes out of that one account. Then I have my own personal account, my own personal savings, my own personal credit cards and those things are separate from the business.
Anything the business needs comes out of a business bank account or is put on a business credit card exclusively. And this is gonna help you with clean bookkeeping and just make life so much less stressful. So there you go, 10 tax tips you need to know as a content creator.
In this article, we have talked about YouTube Tax. Here, we have discussed about 10 best YouTube Tax tips that every YouTube content creator should know. YouTube Tax is a tax policy introduced by YouTube for non USA YouTube content creator. They have to pay 24% YouTube Tax from their YouTube revenue if they have not filled their YouTube Tax information.
If you don’t know how to fill YouTube Tax information then please surf it on internet and if you us to make a complete dedicated article for it, then please tell us in the comment section below.
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