First of all, if you’re reading this article, congratulations! If you’ve landed here, you’ve probably made enough money from your podcast that you need to pay taxes on it, which is an impressive feat in its own right. The internet is flooded with podcasts, and only a select few reach the point of having to pay the government money. Yay, you!
The downside to your impressive achievement is that you might feel a little bit lost at sea when it comes to paying taxes on the income from your podcast. If you’re used to receiving your wages or salary from a conventional office job, your listeners aren’t going to band together and send you a W2. But there are resources out there for those who seek clarity on taxable podcast income. Let’s take a look at what you’ll need to know to file the right way.
Know Your Deductions
If you decide to file your podcast income as business income and not hobby income, understand which expenses you are legally permitted to write off as deductions. For podcasters, any goods or services that are essential to the production of your show fall into this category. This includes hosting fees, travel expenses associated with live shows or events, microphones, computers, software, studio space, and graphic design expenses.
All those write-offs might leave you feeling thrilled, but the flip side is that reporting income as a podcaster can involve more than just monetary receipts. You not only have to report monetary income (whether it’s in the form of cash, checks, or direct deposit); free products and bartered goods or services should be included on your tax forms as well.
Keep Track of Everything
Don’t rely on your memory when you’re filling out your tax forms. Instead, organize all documentation of your income and expenses in one convenient place. If you’ve received income from Patreon, PayPal, and your advertisers in the previous year, make sure not to leave any of those income sources out. Even if you’ve received a small, seemingly insignificant exchange of cash or services from a listener/creative partner, honesty always wins the day when you file your taxes.
Separate Your Personal Finances From Your Business Finances
You may have other sources of income that aren’t related to your podcast. If that’s the case, don’t lump them in with your podcast finances when you file your taxes. This makes the process a lot less of a headache when it comes time to file, and it also helps you get a better sense of the overall income/expenses picture of your podcast, enlightening you to just how profitable the venture really is.
Be In Good Form with Your Forms
There are lots of different ways for people to make money in this country, and as a result, you’ll probably come across numerous different forms that can be used for reporting different types of income. To report self-employment income to the IRS, use Form 1040. Depending on the amount and type of income you’ve received, you may be asked to include information about the size, location, scope, and operations of your business on this form.
If your show is part of a podcast network or released under the banner of a media company, those organizations may supply tax forms that you must use when reporting your income to the IRS.
Don’t Be Afraid to Ask For Help If Needed
If the financial aspects of your podcasts are particularly complicated, tax-preparation specialists can help you figure out how to comply with state and federal laws and maximize your savings on your tax bill. For most podcasters, the logistics of paying taxes should be straightforward enough to take care of on your own, but everyone’s situation is different, so there’s no shame in soliciting the advice of a professional to get all your forms and documents in excellent shape.
Don’t Let it Tax You!
We know paying taxes can make your head throb and even induce nightmares. But don’t think of it as a chore; look at it instead as a mark of your podcast’s incredible growth and success! All the best before April 15, and remember to make those deductions count.