Creating content for platforms like Instagram, YouTube, or TikTok may seem like a dream job for up-and-coming creatives, but there is plenty of work that must happen behind the scenes to turn your passion into a business. This includes effectively managing your finances so that your endeavor can become profitable without running afoul of the tax authorities. Here are 6 essential accounting tips for content creators to maintain a smooth-running business.
1. Don’t Undervalue Your Services
When you are setting rates for clients and negotiating fees, make sure you consider both the market value of your services and all your expenses, from rent and transportation to camera and equipment costs, internet costs, and outside fees for services like accounting and tax preparation. This can help you set appropriate fees that let you earn a profit while remaining competitive.
2. Keep Detailed Records
Whether you are ordering new camera equipment online or buying SD cards at the local store, keep track of all your expenses and save the receipts so that you can take deductions where appropriate and minimize your tax liability. Save all contracts and relevant communications, and record all payments and gifts you receive from social media platforms, ad revenue, sponsorships, and more to report your income accurately.
3. Learn Which Expenses Are Deductible
In general, only products and services that are used for business purposes are deductible from your taxes, though a portion of some items that are shared for personal and professional purposes, like internet access, can be deducted in some cases. Some examples of deductible items include legal fees, marketing costs, office rent, utility fees, office equipment, business software, and website hosting.
4. Upgrade to Professional Accounting Software
When you want to make running your business and managing your taxes as easy as possible, skip the spreadsheets and upgrade to quality accounting software like QuickBooks, Xero, or FreshBooks. These programs make it easier for you and your accountant to manage invoices and payments, track your financial health, generate reports, and keep taxes up to date.
5. Form a Separate Business Entity
Protect your personal assets like your car and home in the event of a bankruptcy or lawsuit that affects your business by forming a separate entity to manage your business assets.
6. Choose a Qualified CPA
Not all CPAs have experience with content creators, and that could put them at a disadvantage. Choose a CPA firm with industry-specific knowledge so that they can help you manage the unique challenges you face as a content creator, such as multiple revenue streams and sponsorship deals.
Accounting for Content Creators in Dallas
When you need a CPA with in-depth experience in the content creation industry, turn to our team at Gurian CPA. We offer complete accounting services for content creators and influencers in Dallas, Houston, and the surrounding areas. We feature everything from tax planning and preparation to business entity formation, account reconciliation, and payroll services, and we are committed to the success of your business.Call (469) 374-3150 today to learn how our accounting services can help your content creation business thrive!
