Do Influencers Get a 1099?
Does an influencer receive a 1099? So, what is a 1099? If you are classified as an independent contractor, which you likely are if you’re a social media influencer, you’ll receive a 1099, which is a form at the end of the year. And then the compensation received by the influencer from any of the sponsoring companies will have no taxes withheld. At the end of the year or quarterly, which would be preferable, the influencer would need to pay to the government whatever self-employment tax would go with whatever you had been compensated. In a normal kind of professional environment, you would have either employees or independent contractors. An employee would receive a W2 and then their compensation would have taxes taken out of it during the regularly scheduled payroll.
As an influencer, you’re not acting as an employee. You’re acting as an independent contractor. You’re just doing a specific amount of work for a sponsoring company for a specific amount of time. You don’t see most influencer agreements go beyond a year. Most of the time, at most they’ll be 12 months, and then they’ll be renewable by the agreement of both parties. Sometimes it’ll just be an event, so you would just have to show up for a day or for a few hours. And obviously, in that scenario, it’s a very short-term relationship, and being an independent contractor would be the only way to properly classify the influencer. What I would suggest is if you’re an influencer and you haven’t done this before, and you’re uncertain how to handle the tax implications of this, you need to reach out to an accountant preferably close to you.
I guess it doesn’t really matter nowadays, but someone who has some familiarity with social media influencers and kind of taking tax deductions and that type of thing. What they’ll likely do is they’ll tell you that you need to create an LLC. You need to get a tax ID number from the IRS, which is called an EIN, and then you’ll also need to create a bank account under that LLC. And then you’ll put all compensation and expenses, then run through that bank account so you can easily track the expenses. And then at the end of the year, you can deduct a lot of the things that you need to be an effective influencer. It could be travel costs, lodging, meals, or any type of cost associated with meetings, depending on what type of influence you are. Other topics of interest include:
It could be clothing or different products. There are just a ton of things that you can deduct. And so, ultimately you may come out ahead if you were just kind of classified as an average employee. There are certain tax benefits to being an influencer. It’s a different type of job, as you probably know. And I think the professional environment is kind of evolving as far as how they see influencers and then kind of what the potential tax deductions for them can be. So, does an influencer receive a 1099? Very likely yes. Absolutely, they would. If you have any questions about your independent contractor agreement or influencer agreement, we certainly can help with that.
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