MARCH 29, 2024

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Welcome to The Tilt, a twice-weekly newsletter for content entrepreneurs.

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Let’s start with the caveat. These tax tips for US content entrepreneurs do not constitute financial advice. Check with a tax professional for the specifics as they apply to you and your business.

Congrats! You’re earning revenue. But don’t plan to spend all that money. The government(s) gets a share. So do these five things to ensure you and the tax collectors have a good relationship.

1. Track your money: While you can create an invoice in a Word doc, that process won’t help you monitor your sales or track your expenses.

If you sell through third-party commerce sites, they will track your sales revenue, but don’t rely solely on them. Use accounting software to keep everything in one place and import data about your sales revenue from third-party commerce sites.

But even if you sell services, you’ll likely owe self-employment taxes (see No. 3.)

Helpful Resource:

• ​Best Accounting Software for Small Businesses compiled by NerdWallet​

2. Know the forms: When you work with US-based businesses, they often will request a W-9 form to secure your tax identification number (TIN). If you haven’t filled out the free form to secure a federal TIN for your business, you’ll provide your Social Security number.

At the end of the year, they’ll send a 1099 form detailing how much non-employment compensation (NEC) they paid you. If they paid you $600 or more in the year, they should send a 1099.

This form reports your adjusted gross income and earnings to the Internal Revenue Service (IRS). The income from any 1099 forms must be reported using Schedule C, Profit or Loss from Business, as part of your annual tax return.

Caveat: If a company pays your business, you should report the income even if they don’t send you a 1099.

Helpful Resources:

• ​What To Know About 1099s by Investopedia​
• ​About Form W-9 by IRS​

3. Understand when you’ll pay self-employment tax

Your taxable income will likely come from paid courses, subscriptions, books, speaking fees, and other products or services. This revenue contributes to your adjusted gross income, which is the amount used to calculate income tax.

If you are self-employed (i.e., you don’t have taxes deducted from your earnings), you must file Schedule SE. Self-employment taxes pay into Social Security and Medicare taxes. At the time of writing this post, the Social Security tax rate is 12.4% on up to $160,200 of your net earnings, and the Medicare tax rate is 2.9% on your entire net earnings.

Self-employment taxes are in addition to your federal income taxes.

Caveat: If you expect to owe self-employment tax, pay estimated taxes every quarter during the year or face a financial penalty if you wait to pay it when you file your taxes.

Helpful Resource:

• ​Self-Employment Tax explained by IRS​

4. Look at business expenses and tax deductions: Just like any other business, large or small, you can deduct expenses related to your writing business. Things like office supplies, travel expenses related to your content creation, business operations, etc. There’s even a home office deduction if you operate the business based out of your home.

Keep receipts for any expenses related to your writing business. Period. Keep your receipts. These receipts are crucial for proving your business expenses if the IRS ever questions your tax return.

To claim these deductions, you’ll need to itemize all deductions on Schedule A of your tax return. Note that your expenses likely will be greater than the standard deduction amount set by the IRS.

If your primary source of income is your content business, you may be allowed to deduct your health insurance premiums through form 8941. Be careful to review your filing status and ensure you’re eligible for this cost-saving deduction.

5. Remember state and local taxes

Don’t forget about local taxes. As a small business owner, you may be subject to state and local income taxes in addition to federal taxes.

If you sell products, you likely will owe sales tax to local jurisdictions (state, county, etc). The Tax Foundation breaks down the state sales tax rate and average local tax rate by state in this chart.

Helpful Resource:

• ​2024 Sales Tax Rates compiled by the Tax Foundation​

Selling your content products and services online means people from all over the world can purchase from you. That’s a terrific way to reach a broader audience, but it also means you’ll sell to people living under different tax codes. Refer to the IRS website for more information about selling internationally.

As a content entrepreneur, you’re not just creating content; you’re running a business. And with the right knowledge and preparation, tax time doesn’t have to be a source of stress.

Please remember that this guide is meant to help clarify key aspects of your tax burden. You should always consult with a tax professional or the IRS for advice specific to your business.

Helpful Resources:

• ​Tax Tips for Authors: A Tax Guide for Independent Creators​
• ​Tax Tips for Creators: From Crypto to Social Media Royalties​

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• Spring pricing for CEX ends March 31. Be sure to get your pass and save $100 before prices go up in April.
• Let’s talk content and business at 12 p.m. US EDT Tuesday on Tilt Your Business: A Weekly Mastermind for Content Entrepreneurs.
• Joe discusses how being a full-time creator means not being a content entrepreneur. (Content Inc.)
• Joe and Robert talk about Florida's new social media age-gating law and Donald Trump's new meme stock. (This Old Marketing)
• Matt and Lauren take another look at generative AI and how it can be a powerful tool to help authors and content creators. (Publish & Prosper)

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