It's TAX season

[PinProject]

Okay I know this topic was brought up before but since it was so far away I guess answers weren't as clear and it was too early to think about.

so I didn't make a huge amount this year but still being a goodie-two-shoe and will be claiming it in my taxes. Here's the question, I know you can claim expenses (buying new equipment, etc.) How does that help you? If anything does it help you get money back lol??

 

[Uncivilized Elk]

What I want to know is if you can claim expenses on income earned as a sole proprietor if you're still taking the standard deduction. Or do you have to do itemized deductions to claim expenses?

Because for next year, yeah I bought some stuff, but no way in hell will it come close to offsetting the amount of the standard deduction (and I don't own a home or any of that sort of stuff so there's practically nothing else I can add to the itemized deduction).

As for your question TC, claiming expenses simply subtracts the amount those expenses cost from your taxable income.

 

[Political Junkie News]

I don't think you can claim expenses unless you've registered as a business.

 

[Uncivilized Elk]

I don't think you can claim expenses unless you've registered as a business.

In my state if you're earning money through a sole proprietorship (which basically means did you earn over $400 or something like that), you're automatically a business (and you even have to register for a general excise tax license, which is horribly stupid when it comes to matters of whether it applies to earnings from stuff like AdSense because these things were crafted long before the internet existed - so I'm still not sure whether I have to pay GE taxes on YT earnings or if the particular letter of the law makes me exempt from that [and even if technically does, the state could still claim you owe them anyway and they will probably win in the end]).

 

[Political Junkie News]

In my state if you're earning money through a sole proprietorship (which basically means did you earn over $400 or something like that), you're automatically a business (and you even have to register for a general excise tax license, which is horribly stupid when it comes to matters of whether it applies to earnings from stuff like AdSense because these things were crafted long before the internet existed - so I'm still not sure whether I have to pay GE taxes on YT earnings or if the particular letter of the law makes me exempt from that [and even if technically does, the state could still claim you owe them anyway and they will probably win in the end]).

I'll default to the guy who sounds like he know what he's talking about OP, do the same.
Check out your state laws. I'm sure google has some info somewhere

 

[PinProject]

I don't think you can claim expenses unless you've registered as a business.

When I first started I was told by a tax advisor that I don't need to register as a business yet

 

[Uncivilized Elk]

When I first started I was told by a tax advisor that I don't need to register as a business yet

Then you should probably ask this tax adviser your other questions and report back to us on the results, haha.

With how many people out there using AdSense and similar programs to earn a living, you'd think there would exist a comprehensive tax guide out there for everyone on the same boat. I have never found one.

Everyone always defaults to "Ask a tax consultant."
Well, some of us are poor, and our taxes owed are quite small to begin with. I'm not going to pay more than what I owe in taxes in the first place to figure out how to pay those taxes.

 

[PinProject]

Then you should probably ask this tax adviser your other questions and report back to us on the results, haha.

With how many people out there using AdSense and similar programs to earn a living, you'd think there would exist a comprehensive tax guide out there for everyone on the same boat. I have never found one.

Everyone always defaults to "Ask a tax consultant."
Well, some of us are poor, and our taxes owed are quite small to begin with. I'm not going to pay more than what I owe in taxes in the first place to figure out how to pay those taxes.

Lol I was hoping to do my own taxes this year and not go to the tax advisor.

I know you would think it would be so clearly stated somewhere on how to do this.....I'm sure there are some big youtubers here who can offer their advice

 

[babyteeth4]

I don't think many people want the potential liability of giving tax advice on an internet forum, and also there are many nuances and special circumstances with tax law and the way you run your YouTube business. Also, you don't say what country you're from. That's why most will tell you to talk to a tax consultant.

I am not a CPA or any kind of tax expert, this is just information that is readily publicly available that I am reposting here. This assumes you're a USA citizen paying federal USA taxes.

If you can't afford the $50 to talk to H&R Block then you're probably not making enough to worry about itemizing YouTube expenses, you're just going to take the Standard Deduction.

As a rule of thumb, if the amount you spent on supporting your YouTube business doesn't exceed the Standard Deduction (currently $6,300 if filing single, $12,600 if married filing jointly), then there's no point in itemizing your expenses, since you're just going to take the Standard Deduction.

Also, certain equipment, studio space, etc. must be amortized rather than just straight deducted.

 

[Munchito696]

Okay I know this topic was brought up before but since it was so far away I guess answers weren't as clear and it was too early to think about.

so I didn't make a huge amount this year but still being a goodie-two-shoe and will be claiming it in my taxes. Here's the question, I know you can claim expenses (buying new equipment, etc.) How does that help you? If anything does it help you get money back lol??

I had H & R block do mine last year, they had me file all my online earnings (YouTube & merch) as a business (which means I got taxed on those earnings once as a business, then they got added to my total income and my total was also taxed). Basically from the way they did it, my online earnings got taxed twice. I'm not sure if there's a better way to do it, but the tax professional seems to think that's how it should have been done.

Anyways, I asked them about deductions and they said anything I used to make my videos or merch could be deducted. So cameras, software, etc. were added on. I have to look at how they did it, but they had some stuff with weird numbers based on amortization, I'm not sure how that works exactly, I just let the experts handle it last year. This year I'm going to try to do my own and just follow what they filled out for me last year. Hopefully I don't owe too much this year, I can't really afford it right now!