- This video is sponsored by TurboTax Self-employed.
Make sure you're checking out the link in the description.
Hey everybody, this is Roberto Blake
helping you create something awesome today.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
and 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.
I wanna thank my friends over at TurboTax Self-employed
for helping me put together this information for you.
Make sure you're checking them out
with the link in the description.
They are really some of the best
at what they do and I couldn't recommend them more.
Question of the day, what do you wanna know
about treating YouTube like a business?
Let me know in the comment section.
That's it from you guys.
Thanks so much for watching
and don't forget, go out there
and create something awesome today.
Take care.
(upbeat music)