Famous athletes like Cristiano Ronaldo with his 169.5 million followers on Instagram or Leo Messi with an Instagram following over 121 million may be two fo the biggest athlete influencers on the planet. Macro influencers are digital celebrities on Twitter, Facebook, YouTube, and Instagram who have a minimum of 250,000 followers, but they may have followers into the millions.
There are several lesser-known professional and amateur athletes who have garnered a large following. If you are an athlete pursuing a career as an influencer, understanding macro influencer tax planning, bookkeeping, and accounting may help you earn a profit and grow your brand.
Do Macro Influencers Have to Pay Taxes on What They Earn?
Typically, they do. Macro influencers may work as independent contractors for the companies they do promotions for. In this scenario, macro influencer tax planning relates to paying self-employment tax, income tax, Medicare, and Social Security.
State tax obligations for macro-influencers may become complicated. If you work for companies outside of your home state, your macro influencer tax planning may include filing several state tax returns, depending on where you have a tax nexus.
If you are paid $600 or more from a company or partner, your macro influencer CPA should receive and file form 1099–MISC for each company you work for. Projects under $600 will still need to be reported to the IRS, even though you don’t get the 1099–MISC.
If you received gifts, these are generally considered compensation, and you may need to pay taxes on the value of the gift. The IRS is constantly changing its rules where this is concerned, so it’s good to talk to your macro influencer CPA about the subject. Some gifts that have a value under a set threshold do not need to be included on your tax return.
What may Macro Influencers Write off on Their Taxes?
There is a wide range of expenses that may be written off. Some of these include:
- Electronics, such as smartphones, tablets, or computers
- Editing software
- Marketing and advertising
- Email services
- Home office space and supplies
As a rule of thumb, expenses that are considered ordinary and necessary are tax-deductible. An athlete who uses home gym equipment solely for producing content as an influencer may write off the purchase of the equipment. However, in most cases, the same athlete may not be able to write off their gym membership as this is for personal use.
What Is Involved in Macro Influencer Bookkeeping?
Macro influencer bookkeeping generally involves categorization and reconciliation. Every transaction an influencer makes must be categorized and recorded on up-to-date financial statements.
Bookkeeping charts may have multiple levels. For example, a purchase may be categorized as “supplies.” However, that transaction may be listed under the parent category of “gym supplies,” then “expenses,” and lastly “owners’ equity.” You may do your bookkeeping manually, but it may be easier to use software designed for this purpose, like QuickBooks Online.
Reconciliation is where you, or your macro influencer career accountant makes sure that your accounting records and your bank statements align, both the beginning and ending balances. This job may be a lot easier for macro influencer accountants to do if you have already made sure that your business and personal accounts are separate. If you don’t do this, reconciliation could be a nightmare.
Getting more Done and Save timing with a Financial Adviser
In our scenarios, as a macro influencer athlete, you likely have a full schedule training, taking part in your sport, and producing content for yourself and your clients. You may not have time to give your accounting, tax planning, and bookkeeping the attention it needs. These circumstances could extend to any type of macro influencer. Here at Fusion CPA, our financial advisers are here to help. We are made up of a team of seasoned accountants. We work with small businesses like yours, to help provide financial data that may help make sound business decisions. We strive to take the mystery out of your financial reports and help you glean insight from these reports that may help to increase revenue and minimize tax liability. We want to help you get a clear picture of where your finances are now and work with you in creating a financial plan that may lead to future growth. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
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.