- Hi everyone. I'm attorney Aiden Durham
with 180 Law Co. in Colorado. Welcome back to All Up In Your Business where today we're gonna talk about some tax deductions
that might be available to you if you are a YouTuber
or a content creator. Before we get into all
that fun stuff though, please do subscribe if
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the internet, but whatever. Follow me on Instagram too, thanks. And while I am a lawyer,
I'm not your lawyer, the stuff I talk about in my
videos should not be taken as a substitute for actual legal advice. If you need help with any legal situation, you should consult with a lawyer who's
licensed in your state. So if you, like me, spend
much of your days talking to yourself in front of a camera, you may have some unique opportunities for tax deductions that
many other businesses and business owners might not have. And this doesn't just go for YouTubers. I'm talking about other kinds
of content creators as well potentially even other
influencers, influencer types. Some of these deductions are
gonna apply to all of you too. First, though, we need to make sure what you're doing is actually a business because you can only
take business deductions if what you're doing is a business. You can't take deductions
for hobbies, unfortunately. This doesn't necessarily mean
you have to be making money because certainly you can be in business and not be making any money. That's not all that uncommon. But whatever you're doing, whether it's creating YouTube videos or creating other content, whatever you're doing, you
should at least be doing it in the pursuit of making money. And there are a few different things that the IRS will look at to kind of determine
if something is a hobby versus a business. Like if the activity is carried out in a businesslike manner,
and if the time and effort that you're putting into
it shows that you're trying to make a profit. If you try things out and change methods in order to figure out what's
going to be more profitable and what's going to work better in your pursuit of making a profit. So these could be things
like maybe you've created a business plan for your YouTube channel or for your content creation business. You've researched other
creators in the industry to try to figure out what
works and what doesn't. Maybe you've hired a coach
or taken some courses to learn how to start
and grow a successful and profitable YouTube channel. Hopefully you've got a system in place to track your income and expenses, because certainly that's a
big part of being a business, is keeping an eye on your
income and your expenses. And maybe you have advisors like lawyers and tax professionals. These are all just
examples, but these are some of the things that the IRS might look at if there's a question of if what you're doing is
a hobby or a business. So let's just assume,
assuming your YouTube channel or what you're doing is a
business and not just a hobby. Now let's talk about what you can deduct. Just like any other business you can take business deductions. And the general rule from the IRS is that you can deduct any expenses that are ordinary and necessary. Ordinary means it's common
and accepted in your industry and necessary means it's
helpful and appropriate in your business or in
your industry or trade. So the things that I'm
gonna mention in this video, it's obviously not an exhaustive list of every possible business deduction because the possibilities
really are endless. As long as we can demonstrate that it's both ordinary and necessary then it's probably gonna be a
deductible business expense. So let's start with
some of the more obvious but maybe not so obvious
potential deductions for people like me, and
maybe like you YouTubers. Our camera and our filming equipment. Of course, the thing that we spend all of our time talking into, screaming into the void, our camera. That's going to be deductible. It is both ordinary and
necessary for a YouTuber or a video content
creator to have a camera. Your other filming
equipment like your mic, maybe your lighting, if you've got one of these nice fancy ring
lights or any other kind of lighting, that lighting's
going to be deductible. And then all the other things that go into creating these videos. So if you're doing your own editing, then your editing software. If you use other social media platforms to cross promote your videos or your channel and to
bring in your audience then maybe like your social
media scheduling tools or maybe you don't do
those things yourself. Instead, the cost of the people
that you hire to do those. So if you have hired a video editor or a social media manager,
those people's expenses, those costs that you pay to them are going to be deductible too. Costs associated with your website. If you have a website or
other advertising expenses are usually gonna be deductibles. So maybe you do some paid advertising on Facebook or Instagram or something. Those advertising expenses are
deductible business expenses. And again, if you are like me and you do all of this
fun stuff in your home then you're gonna most
likely be able to qualify for some home office deductions as well. Maybe taking a portion of your rent or your mortgage interest, your utility costs, your insurance costs. You can't deduct all of it,
but you can deduct the portion of your home that is used
for your home office. So for simplicity's sake, if your home is a thousand square feet and your home office is
a hundred square feet, 10% of a thousand, so you can deduct 10% of those home expenses
as your home office. Some other less obvious potential deductible business expenses. These are gonna really,
really depend on the nature of your channel or the type
of content that you make. Food, for example, nope, don't go crazy. Food as a general rule, food
expenses are not deductible because we have to eat food, regardless of if we
are in business or not. But if your whole thing, if
your whole shtick is food, maybe you review food or
you have a cooking channel then some of those food
expenses could be deductible because they are ordinary and necessary for the pursuit of your business. Same with stuff like makeup. If you're a beauty influencer and you teach people how to do makeup or you review makeup or skincare products then the money that you spend
on those products to review or to do those tutorials
could be deductible as well. Travel expenses, too. Travel costs, generally
speaking, are deductible, if you're traveling for business. I've attended VidCon before, the big like YouTuber convention,
I've attended that before. And those expenses, traveling
to VidCon, attending VidCon those are deductible business expenses because I wouldn't be going to VidCon, but for my YouTube business or if you're a travel
blogger, same idea applies. But it does get potentially kind of sticky in those situations. Just because you're a
travel blogger doesn't mean all of your travel expenses are gonna be deductible business expenses. Ultimately, it still comes down to that ordinary and necessary thing and you might find yourself in a situation where you have to defend
those business deductions. The biggest thing, especially with respect to these expenses that
are kind of on the line, may or may not be deductible is to take and keep really good record of those expenses and
why you incurred them. Keep your receipts, keep
your receipts for everything. Make notes to yourself
about what was the purpose of this purchase and why you
think it's a business expense. If you're a beauty influencer
and you purchased a product for a particular review
video, maybe write a note on that Sephora or Ulta receipt saying "brand review video posted on X date." That's not necessarily gonna make it a hundred percent a deductible
expense, but at least if the IRS comes around,
does an audit or something and asks, "hey, why did you take this as a business deduction?" You can look at the receipt and say, "well because I bought
this for the purpose of making this video" and you have something to back up why you made that deduction. And along, of course, with
keeping those receipts it's always a good idea to work with a CPA or a tax professional who
hopefully has some experience and knowledge with content
creators and maybe influencers and YouTubers so they can
help you figure out what is or is not deductible so
that you can maximize your deductions to pay
as little tax as you can, but also minimize the risk
and chances of getting into some trouble with the
IRS and the taxing gods. That's all for this episode, folks. If you learned a thing or two, gimme a thumbs up, subscribe
if you haven't already, click that little notification bell so you get notified
anytime I post a new video. Follow me on Instagram
and check the description for links to additional
information and resources. If you wanna keep learning
about business deductions, I've got another great video talking about more business deductions that might be available to you. You can check it out right here. I'll meet you over there. Thank you so much for watching. I'm Aiden Durham and
I'll see you next time.
