The #1 Question Asked By Influencers In Regard To Business Deductions

In this episode of Business Minded Mama Podcast, Stephanie offers an interesting perspective on business deductions for influencers. She answers the most asked question by influencers that can help you be more mindful of your influencer business expenses.

Stephanie also underscores how getting your taxes prepared by a tax professional or CPA can save you a good deal of money and time.

To dig deep in other potential tax deductions, make sure to grab your Free PDF. (Links Below)

TimeStamps:

[00:15] Free resource for Influencers

[00:55] What inspired me to start this podcast

[1:57] The most asked question by influencers regarding business deductions

[4:23] Best Piece of advice to effectively deal with your finances

[7:21] What deductions you can make as an influencer

[8:41] Closing Notes

Quotes:

“It’s important to use your creativity to showcase one item in multiple ways.”

“The clothing that you purchase to showcase on Instagram is not a deduction.”

 As per IRS: “In order for clothing to be deducted, it must be ordinary and necessary for your business operations.

Links Mentioned:

5 Tax Considerations Especially for Influencers(Free PDF): https://bit.ly/3h3PdAK

Connect with Us:

Facebook: https://www.facebook.com/groups/businessmindedmama

Instagram: https://www.instagram.com/stephanieparenza/

  

Full transcription below

In today’s episode. I am going to talk about the number one thing I’m asked by influencers when it comes to their business. I cannot wait to share this with you, but wanted to let you know that I just put out a free downloadable PDF with some more interesting tax considerations for you. That’s right. Five things that you may or may not be considering when it comes to your business financials as an influencer. So, make sure you head over to www.stephanieparenza.com/blog/tax freebie, or go to the show notes to directly click on the link. I will see you in the episode!

Hello, today, I am coming to you with the number one question that I am asked from fellow bloggers and influencers regarding expenses. Can you guys take a guess on what that might be? The number one thing I am asked is, “Can I deduct the clothes that I purchased for my influencing business?” Meaning the clothes that they have purchased to share with the world via Instagram. Can you deduct those? Can you deduct that hat that you bought to share via Instagram or those shoes,that purse? Anything that you’re wearing for your photo that is being marketed out on these social platforms. Can you deduct them? The answer is no, you cannot deduct your clothing. Here’s why. The IRS says that in order for clothing to be deducted, it must be ordinary and necessary for your business operations. Now, what does that mean? That means, ordinary, it’s in line with industry standards required for your industry that you are in and necessary, meaning it’s essential for your business to run.

Now, this may be confusing. Some of you, because as an influencer in your mind, the clothing that you’re sharing is essential and in line with industry standards, right? You are not wrong. You are not wrong, but in the IRS, his eyes, that is not an argument that you can make. I see both sides. So the IRS is really saying you are not required to wear a uniform, right? No one is making you and you hopefully are requiring it of yourself to be clothed. So clothing as an everyday essential item is, is there that’s you have to wear clothes, right? So you buying new clothes to show is not a necessary business expense because you need to be closed. There is nobody else telling you that you have to go buy that specific item. And so I think that’s where the confusion can come in. What I personally do think is that because this online business for influencers is newer and growing, I do think that we may see adjustment in the future.

This is just my opinion. Please keep that in mind. Um, what I also will say is I will always recommend that you talk directly with your tax preparer or CPA about this matter because accounting taxes can be somewhat gray. And I do know that there are some CPAs protects prepares out there that do think you have the right to claim that as a business expense. So always consult first, but in my opinion, keep it in your mind that these are not business deductions. The clothing that you purchase to showcase on Instagram or your blog is not a deduction now that you know, that clothing is not a business deduction. I think it’s important for me to tell you that as an influencer, you should be very mindful of this, especially as a new influencer. I know it is easy to get carried away with purchases because you all are always wanting to get out new content.

And with new daily content means you have to be showing other things. And I, from experience, no, it’s easy to get stuck in that trap. So from a financial aspect, I want you to be mindful of this because you can easily go into the red, even though it’s really a cross between personal business. So while you can’t deduct those to make your business actually in the red, knowing that you’re most likely at this beginning stage putting personal money into your business in order to grow it, you are in a sense negatively impacting your business. If that makes sense to you. So I think it’s just important to be mindful, to use your creativity, to showcase one item, multiple ways so that you’re not pouring all of your personal money into something that you can’t even deduct as a business expense. You, in my opinion will not get very far in your business with that kind of structure.

The good news is there are many other deductions out there that are available to you as a small business or an influencer. I have put together a quick PDF of just the top five tax considerations, especially for you influencers. I have put that in a free downloadable PDF just for you. All you have to do is head over to my blog and check it out. These five things are the things that come up the most when talking with other influencers. So I wanted to get that out to you all, as soon as possible, I will continue to work on a longer list of considerations for you, but I hope that this is helpful for right now. I know that taxes were due yesterday, but I think these things are still prevalent, especially as we are moving towards the end of 2020, when a new tax season will begin. So there is never a bad time to think about taxes and tax deductions and business expenses. So go out, go on over to my website. You can find the link in the show notes. Go over there, grab this free downloadable and then stay tuned for more to come. I hope you all have a wonderful rest of your week.