A Practical Guide for Influencers: Tracking and Deducting Business Expenses

Life as an influencer might seem all about exciting partnerships and creative expression, but running a successful influencer business means understanding and managing finances, especially tracking expenses that can reduce your tax bill.

Let’s dive into some common deductible expenses, practical examples, and how you can keep your finances organized to maximize profitability and stay compliant with IRS regulations.

Common Deductible Expenses for Influencers

Influencers have unique business costs, and many of them can be deducted to ease your tax burden. Here’s a breakdown of key expenses you can deduct, with examples to make it easier to recognize and record them.

1. High-Quality Content Creation Tools

• Examples: Cameras, lenses, microphones, lighting equipment, editing software subscriptions, and laptops.

• Why: All these items are essential to creating and maintaining high-quality content, making them fully deductible business expenses.

2. Business Travel Expenses

• Examples: Airfare to industry events, hotel stays during brand meetings, mileage on your vehicle when traveling to business-related events, and rideshares to business dinners.

• Why: Travel directly tied to your business is deductible, helping you offset the costs of attending events or meeting clients.

3. Home Office Setup

• Examples: A portion of your rent or mortgage, internet costs, electricity, and even a share of homeowners’ insurance if you use part of your home exclusively for business.

• Why: Claiming the home office deduction can be beneficial if you use a designated space solely for content creation or business activities.

4. Marketing and Advertising

• Examples: Instagram ads, sponsored posts on social media, website hosting fees, and promotional giveaways.

• Why: These costs support your brand growth and audience reach, qualifying them as tax-deductible.

5. Professional Services

• Examples: Fees for accountants, legal advisors, managers, photographers, and videographers.

• Why: Outsourcing these tasks helps your business run smoothly, making these expenses fully deductible.

6. Educational Expenses

• Examples: Online courses in social media marketing, workshops on photography, or conferences on digital marketing.

• Why: Investing in skills relevant to your business can be deducted, supporting your growth as an influencer.

7. Office Supplies and Subscriptions

• Examples: Stock photo sites, Canva Pro, Adobe Creative Cloud, notebooks, pens, and other supplies.

• Why: These costs can add up and are necessary for creating content, so they’re deductible as business expenses.

8. Meals and Entertainment

• Examples: Coffee with a brand representative or lunch with a collaborator (50% deductible if directly related to your business).

• Why: Business meals are deductible if you keep detailed records of the date, attendees, and purpose.

9. Phone and Internet Expenses

• Examples: Cell phone and internet usage required to manage your online presence.

• Why: You can deduct the percentage of your phone and internet bill used for business activities.

Practical Tips for Tracking Expenses

1. Use Accounting Software

• Accounting platforms like QuickBooks, Xero, and Wave sync with your bank account to track and categorize expenses automatically. For instance, QuickBooks can pull in transactions from your business bank account and allow you to label expenses like “Advertising” or “Travel,” saving time and minimizing error.

2. Separate Personal and Business Accounts

• Tip: Set up a dedicated bank account and credit card for business expenses. This not only simplifies your accounting but also makes it easier to spot deductible expenses at tax time.

3. Maintain Detailed Receipts and Records

• Example: Keep digital copies of all invoices, receipts, and records. For instance, snap a picture of your meal receipt immediately after a business lunch, or file away receipts for travel expenses in a dedicated folder. Apps like Expensify or even Google Drive can help organize these records efficiently.

4. Categorize Expenses Consistently

• Tip: Regularly review and categorize expenses in your accounting software. For mixed-use items like your cell phone bill, estimate the percentage used for business and categorize accordingly.

Stay Ahead with Acqrate Consulting

Navigating the world of deductible expenses can be complex, and missing out on any tax-saving opportunities could mean leaving money on the table. That’s where Acqrate Consulting comes in. Our team specializes in supporting influencers with streamlined expense tracking and accounting services tailored to your business model, so you can focus on what you do best: creating compelling content. Let us take the financial side off your plate – contact Acqrate Consulting today!