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If you don't get the income tax form via the mail, online creators must still report income from content that is monetized on their tax return. Although other sites (like Etsy and Amazon) make tax filing more complicated by charging unneeded fees, it makes tax time simpler, easier to access and less stressful leaving you time to focus on the content.
1099-Ks Tax Season Update:
We'll start by defining the fundamentals. What exactly is the 1099-K? 1099-Ks are the forms provided by the IRS which monitor debit and credit card transactions made through third-party networks payment processors. Third-party processors (like PayPal, for example) can report on transactions that they process for their business. If you're a creator and accepts payment via debit or credit cards then you'll likely receive 1099-Ks in the mail together with the IRS. Since the IRS will receive every copy of the 1099-Ks, it's important to be transparent in filing tax returns.
Gross payments
In case you aren't aware your gross earnings, they are your total earnings make before taxes and deductions. In the past, many creators of content did not have to report their earningssince the threshold for qualifying for this was set at $20,000. In 2022, the max gross income to monetize online content was reduced dramatically to just 600 dollars.
With this transition, most online professionals--freelancers, artists, vloggers, and creators--will receive a 1099-K. A helpful tip in preparing for tax season is to record the money you make throughout the year, making gross income easier to file. If you fall under the threshold of $600 but you're not taxpayer, there is no need to fill out an application for a 1099-K.
Eliminating Hobby Classification
The Hobby classification is a situation when the IRS finds that your organization doesn't actually exist as a business however, it's an activity. Some content creators, especially those who are just beginning to learn about this area of work, might think it's a good option. If it's a hobby, I'm not taxed, surely? Absolutely not. In fact, it's detrimental both for your business and your profits if IRS believes that your business is considered to constitute a tax-exempt entity.
State Sales Tax
Another thing to be aware of when preparing for tax time is that there is the state-wide sales tax. This is particularly important if you're an online-based creator since your items are available all over the world.
Get an Tax Professional
We are able to provide suggestions and advice for our visitors, we're no accountants. We advise all of our site authors to seek assistance from an accountant for professional opinion about how to save on taxes, stay clear of tax mistakes and make paying taxes more simple.
Making it through Tax Season All the way to
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