Influencer Money Talk - LLC, Taxes and Chasing Brand Payments (feat. Mr D)

Influencer Money Talk - LLC, Taxes and Chasing Brand Payments

GUEST-STARRING Mr. D

It is finally time to talk influencer money.

This is a topic that has been highly requested and I happen to have the perfect guest to walk us through some of the most frequently asked questions I receive in terms of keeping track of finances as an influencer. My husband (the internet knows him as Mr. D) is highly qualified! He has worked 15 years in financial services to raise and invest money. In addition, he always helps with the financial and legal side of my own various businesses. Most importantly though, Mr. D is obsessed with saving money! Let’s jump into his advice on starting a LLC, taxes, and chasing brand payments.

Disclaimer: Please consult a tax specialist for your tax needs - we share as much as we can, but we are not tax experts!

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1. Is it best to have a company structure set up (LLC, etc)?

Firstly, you can protect yourself from debt or lawsuits. Of course, this is very rare for an influencer to encounter but it is an ease of mind knowing this is already set up. For instance, if you ever get sued, that opposing party will go after your company but your personal finances and assets will be protected. Secondly, when you have a company structure set up, you can deduct your business expenses from taxes.

2. Do I need a business bank account to create an LLC?

It is preferred that once you set up an LLC, you do have a separate bank account primarily for your business. If you mix personal and business, it does have a greater tendency of being confusing. However, if you are a relatively small start up, have no debt collectors coming after you, or any lawsuits, it is okay to have one bank account for now. However, having separate accounts is ideal as the whole purpose behind an LLC is to have the ability to keep things separate. This applies to PayPal accounts too.

3. What kind of expenses can we deduct?

The most standard things are travel, meals, equipment, and sometimes even clothing. As an influencer, my gear obviously allows me to do my job so anything camera, phone, or laptop related can obviously be expensed. It gets more tricky when it comes to things such as your office space. If you work from home, you can only expense the part of the home where you strictly run your business from. To do so, you would calculate the square footage of your home office in order to expense this portion of rent or mortgage.

As an influencer, you cannot expense everything you enjoy! You really have to separate what you actually are using to grow your business versus what is just for your personal use.

4. What does it actually mean when you expense something?

Let’s say you have $100,000 from all your work as an influencer. You do not get taxed on the entirety of this amount. There are expenses that help you to achieve this income. If your expenses add up to $25,000, the government will only tax you on the $75,000. This is your taxable income.

5. Does it matter where I live and operate my business?

Yes! One way you can save money as someone who is self-employed is by moving to a state that has better tax laws. For instance, in California, the state tax rate is dependent on your income but you will be liable to pay a max of approximately 13%. Whereas, one state over in Nevada, the state income tax is 0%. Texas and Florida are the other two biggest states where there is 0 state tax. We highly recommend tuning into Graham Stephans for his financial advice and his experience moving from California to Nevada.

If you are American and looking to live abroad, some of the countries with more favorable income taxes include Singapore, Hong Kong, Dubai, and Portugal. For more information, @wanderers.wealth helps digital nomads save money.

Fun fact, if you live abroad for a certain number of days, your first $112,000 is tax free. Beyond that, you still have to pay federal taxes to the U.S. even if you live abroad.

6. How else can I save money?

Mr. D shares that you can also look into investing into real estate as this is another way to dramatically reduce the amount of taxes you pay. I have shared this resource time and time again, but “Rich Dad Poor Dad” by Robert Kiyosaki goes into how rich people use real estate to continually pay $0 in taxes.

7. Do you have to pay for your own health insurance?

Yes, as a freelancer you do have to pay out of pocket for your own health insurance. In the US, this is very expensive so make sure you take this expense into account when starting your career as an influencer. But if your spouse works full-time and has a decent company health insurance, definitely look into jumping on their plan to save money.

8. What is a W-9? What is a 1099?

W-9 is for the US and acts as a tax ID. It is a form that you fill out and it gets sent to the brands or PR agency you have worked with so they can claim you on their taxes. Essentially, the W-9 form is for them to claim as a business expense.

10-9 is a form that the brand gives to you. Think of this as a receipt. You would then claim this on your tax form.

9. Should I have a tax accountant as a freelancer?

It is recommended. You will have multiple sources of income in addition to multiple sources of expenses, which is a lot to keep tabs on. An expert will be able to skillfully pull everything together for you so your taxes are properly filed each year. You could go so far as to learn as much as you can about the process and attempt to try and file your own taxes without submitting anything. From there, hire a professional and if your numbers match up, you could potentially do your own taxes the next year to save money.

10. What if a brand does not pay me on time?

Most brand deal contracts are based on net 30, 60, or 90 terms. After you deliver the content, the brand will have to pay you in 30, 60, or 90 days respectively. If they fail to pay on time, you need to send them a reminder via respectful, professional emails. Unfortunately as creators, we are responsible for our finances and you need to chase a brand to pay you. Always be diligent and keep track!