TikTok has 200 million users, with an average of 13 million videos uploaded daily. As a TikTok producer, you can make money by using this platform as a promotional outlet, parlaying your following into sponsorships, selling merchandise, capitalizing on at a revenue, or getting donations during a live stream event with your TikTok audience. TikTok accounting will help you accurately document the money you make from these various revenue streams.
Having accurate books will help you with your tax planning as a TikTok producer, especially when deducting the equipment and products you use. Accurate TikTok producer bookkeeping shows that producing videos on TikTok is not just a hobby or recreation but that it is an activity that you are engaging in with a reasonable intention of turning a profit.
Reporting All Of Your TikTok Accounting Income To The IRS
Good TikTok accounting practices require you to report all the income you’ve earned on a schedule C to the IRS. You might receive information returns like the forms 1099 MISC or 1099 – K if your TikTok producing profit exceeds $600. However, even if your profits are under this threshold, you’re still required to report the income you’ve earned. A CPA for TikTok producers may help you make sure that all of your taxable income gets reported accurately.
Paying Self-Employment Tax & Medical Tax On Your TikTok Producer Income
TikTok producer accounting means setting aside the money you’ll need to cover self-employment taxes and for paying estimated tax payments. Self-employment tax includes Medicare taxes and Social Security taxes. When you’re employed, your employer pays half of these taxes, and you pay the other half. However, as a freelance producer, you’re responsible for both the employer and employee share of these taxes. 50% of this tax is deductible as adjusted gross income.
It is good to discuss when to pay estimated tax payments with your CPA. More challenging than remembering to pay these taxes is to have the cash on hand needed to pay them. TikTok producer Financial advisers for TikTok producers can help you set up a plan to set aside a percentage of your earnings for estimated tax payments. They may recommend that you set up a separate bank account for these payments.
An option that some TikTok producer financial advisers recommend for their married clients is to have the employed spouse adjust their withholdings to cover the estimated taxes of the TikTok producer.
Benefiting From Special Tax Breaks As A TikTok Producer
If you record, mix, or edit your videos in a home office, or if you do your administrative work, scheduling appointments, and research in a home office you may be eligible for a home office deduction.
As you go through your TikTok producer tax planning for the year, keep track of qualified business income deductions. These could include transportation, meals, advertising, etc. Accurate bookkeeping is key to finding all the deductions you qualify for while simultaneously making sure that the deductions you take are in compliance with the law.
Fortunately, here at Fusion CPA, we focus on helping small to medium businesses and entrepreneurs make the most of their financial planning. As a TikTok producer, you fall into the category of possibly benefiting from CFO advisory, and we are here to help. We offer TikTok producer CFO advisory services, general accounting, tax preparation, bookkeeping, and financial planning. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today or read more on our entertainment page!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive