Do you ever look at your TikTok earnings and get curious about taxes? If so, you're in the right place. In this article I’ll walk you through the entire tax filing process: from gathering your information to filing your tax return.
Let’s get to it.
Tax basics: what TikTok creators should know
First of all, know that TikTok earnings are taxable income. This means that, depending on where you live, you’ll need to file a tax return with the Internal Revenue Service (“IRS”) and your home state.
What is a tax return?
A tax return is an annual form that you file with the IRS and state tax authorities to report your income and deductions. After filing the tax return, you’ll either owe taxes or get a tax refund, depending on how much you earned and how much tax you paid during the year.
In the United States, individuals must file Form 1040, U.S. Individual Tax Return if they meet the annual filing requirements. Your state has a separate tax return, unless you live in a state that doesn’t have an individual income tax.
Should you file a tax return as a TikTok creator?
Not everyone needs to file a tax return.
The IRS requires anyone who earned $12,950 ($25,900 if you’re married) or more to file a Form 1040 for 2022. If your gross income was less than this amount, you don’t need to file.
But, there’s an exception to this rule if you’re self-employed as a TikTok creator.
If you earned $400 or more through TikTok, you may need to file a tax return even if your gross income was less than $12,950 ($25,900 if you’re married). This exception applies if your TikTok earnings are “self-employment” income, and this is more likely than not the case.
Most TikTok creators who made more than $400 in one year should plan on filing a tax return.
What happens if you don’t file a tax return?
If you’re required to file a tax return, you must file on or before April 15th, 2023. Failing to file before this date may result in penalties and interest assessed by the IRS.
Tax penalties and interest can be significant, so I recommend filing your tax return on or before April 15th, 2023 or file an extension if you need more time. An extension filed before April 15th extends your tax return’s due date to October 15th, 2023.
TikTok likely sent you one or more 1099s. A 1099 isn’t a tax return and this doesn’t mean you filed a tax return. You should still file a tax return even if you received a 1099 from TikTok, unless you meet a filing exception. The IRS will know if you haven’t reported your 1099 income.
What is the TikTok tax form (“Form 1099”)?
Form 1099 is a tax information document that TikTok gives to you and the IRS. This document reports the gross amount (i.e. amount you received before deductions) that TikTok paid you. TikTok is required to file a 1099 on behalf of any creator who received at least $600 in payouts during the year.
Let me reiterate this important point: the fact that you received a 1099 from TikTok, doesn't mean you filed and paid your taxes. A Form 1099 is a tax information document. It’s not a tax return. You still need to file a tax return.
You may have received more than one Form 1099 as a TikTok creator.
If TikTok paid you royalties from the TikTok creator fund, then TikTok would issue you Form 1099-MISC. If a brand paid you for affiliate marketing, then the brand (not TikTok) would issue you Form 1099-NEC. If you have an online store or receive donations from followers, your payment processor (e.g. Stripe, PayPal, Shopify, etc.) may have issued you a 1099-K.
Income from any version of the Form 1099 is reportable on Schedule C of your tax return, unless your TikTok income is reportable as “hobby” income.
What if you didn’t get a 1099 TikTok tax form?
TikTok may not have issued you a 1099 for a few different reasons.
Reason #1: You received less than $600 in payouts.
If you received less than $600 in payouts, TikTok may not have issued you a 1099 because you’re under the 1099 reporting threshold established by the IRS. You should still plan on reporting your TikTok earnings on your tax return to avoid underreporting your income.
Reason #2: The tax information you reported to TikTok is incorrect.
TikTok requires new creators to fill out a Form W-9. It’s possible that you entered information in this form which indicated to TikTok that you’re exempt from 1099 reporting. Consider reviewing the tax information you reported to TikTok.
When re-doing the W-9, be sure that you’re providing your personal social security number and classifying yourself as an individual. Even if you have an LLC with an EIN, you should provide your SSN to TikTok unless you have elected corporation status with the IRS. This would be uncommon.
Reason #3: It’s not January 31st yet.
TikTok won’t give you a 1099 until January 31st. TikTok requires some processing time between year-end and January 31st. So, you may just need to wait.
If you received payouts from TikTok, your W-9 information is correct, and January 31st has come and gone, then you should confirm why you haven’t received a 1099 prior to filing your tax return. Follow up with TikTok support if needed.
How is TikTok income taxed?
The taxes you’ll pay on TikTok earnings depend on a few different factors, including where you live, your age, and whether you’re a hobbyist or self-employed creator.
I’ll walk you through each of these factors.
Hobby Creators
The most important tax distinction is whether your TikTok content is a hobby or a business.
As a hobby creator, you aren’t eligible to take deductions and you’ll report your TikTok earnings as a gross amount. This means that the number reported on your 1099-MISC is the amount on which you’ll be taxed.
As a self-employed creator, you’re eligible to take deductions and you’ll pay both self-employment taxes and income taxes on your TikTok earnings. The number reported on your 1099-MISC isn’t the amount on which you’ll be taxed, unless you have no deductions to take.
The hobbyist vs. self-employed creator classification is subjective. You should review the IRS guidelines to determine whether your TikTok activities more closely resemble a hobby or a business. Be sure to have a defensible argument in the event that the IRS audits your tax return.
State Taxes for Creators
Your TikTok earnings may also be taxed by the tax authority for the state in which you live, in addition to federal taxes.
Some states, such as Florida and Washington, don’t have an income tax. If you live in a state without an income tax, then you’ll only file a tax return with the IRS.
If your state does have an income tax, then you’ll file both federal and state tax returns. You’ll likely owe taxes to both the IRS and your resident state.
TikTok Taxes for Minors
Minors who earn income on TikTok may be required to file a tax return. A minor’s filing requirements, and the amount of tax they’ll pay, depend on whether the minor is a hobby creator or a self-employed creator.
Minors who are “self-employed” creators must file a tax return if their TikTok income is greater than or equal to $400. They would pay self-employment tax in addition to income tax. They would be eligible to take business deductions to offset their income.
Minors who are “hobby” creators must file a tax return if their TikTok income exceeds $1,100. Hobbyists wouldn’t pay self-employment tax but would pay income tax. They wouldn’t be eligible to take deductions to offset their TikTok income.
The IRS provides guidance to determine whether TikTok creators are hobbyists or self-employed.
How to calculate taxable TikTok income?
Your gross taxable income will equal payments received from TikTok plus payments received from other sources. You must report all income related to producing your TikTok content on Schedule C of your tax return.
For example, you might sell merchandise through an online store that you advertise in your bio. Income earned through this store wouldn’t be included in your TikTok 1099-MISC, so you’d need to add it to your TikTok 1099-MISC to calculate your total gross taxable income.
You may have received other 1099s in relation to your TikTok income. Payment processors such as Shopify, Stripe, or PayPal would issue you a 1099-K. Brand affiliates would issue you a 1099-NEC, if you received more than $600 in payments.
Be aware that TikTok and other platforms report “gross” payouts on the 1099. The gross amount is what you earned before processing fees. If the amount that was deposited into your bank account differs from the amount on your 1099s, you should take a deduction for processing fees on your Schedule C to avoid overreporting your TikTok income.
How to pay less tax on TikTok income?
TikTok creators can pay less tax and keep more of their TikTok earnings by using the tax avoidance strategies I describe below.
Strategy #1: Get organized
Good recordkeeping makes tax season a breeze.
As a tax preparer, I often see clients fail to take common tax deductions and incur penalties because their financial records are disorganized. Tax season arrives and they’re struggling to remember whether that $64.65 Target purchase from 12 months ago was business or personal.
By maintaining good financial records, you’ll sail stress-free through tax season. You’ll file your tax returns on-time and you’ll take all available deductions.
The best recordkeeping system is usually the simplest one. My advice is to start small with a simple spreadsheet and make incremental improvements to your system as needs arise. At some point you may consider using accounting software such as Wave or QuickBooks Online.
Strategy #2: Maximize tax deductions
Businesses incur costs as a necessary part of generating revenues. Employees must be paid, supplies must be purchased, and advertisem*nts must be run in an effort to acquire paying customers.
The IRS allows businesses to deduct these costs to calculate their taxable income. The more deductions (i.e. “write offs”) a business can take, the lower its taxable income will be, which means the business pays less tax.
As a TikTok creator, you may sometimes pay for things to produce new content. Self-employed creators can deduct these expenses from their total earnings, which helps them pay less tax.
Bear in mind that the IRS requires deductions to be “ordinary” and “necessary.” This means that you can only deduct an expense if it’s used in your business.
For example, you might use some equipment when you aren’t making content for personal enjoyment. Since you can’t deduct personal expenses, you’d decrease the cost of this equipment by the extent to which you used it personally to determine the deductible amount.
Here’s a list of tax deductions that you might take as a content creator.
Production Expenses
- Outside services (assistants, commissioned art, editors, etc.);
- Payment processor fees (Stripe, PayPal, etc.);
- Software subscriptions (Canva, Streamlabs, etc.);
- Cost of merchandise sold through online stores;
Assets
- Furniture (desks, chairs, risers, etc.);
- Hardware (cameras, microphones, computers, etc.);
- Props used in content;
Other Deductions
- Personal vehicle
- Travel
- Legal & professional fees (accountants, lawyers, etc.)
Home Office
- Home utilities (water, electric, heating, etc.)
- Repairs & maintenance
- Mortgage insurance, interest, property taxes
- Rent
The home office deduction can be tricky. No, you can’t deduct 100% of your rent. But you may be able to deduct a portion of it if you “regularly” and “exclusively” produce content or perform administrative work from an area of your home.
In general, use your judgment when it comes to deductions. Be prepared to justify each and every tax deduction in the event that your tax return is audited by the IRS.
Strategy #3: Minimize self-employment taxes
As a TikTok creator you'll probably pay self-employment taxes.
Self-employment taxes are equal to 15.3% of your TikTok income after deductions. These taxes are your contribution to the Social Security and Medicare systems. You’ll pay self-employment taxes in addition to regular income taxes.
At some point it might make sense to form a separate tax entity for your business to avoid self-employment taxes.
This would entail establishing your content creation business as a S corporation (sometimes shortened to “s corp”). By doing so, your business becomes a separate taxable entity. The business pays you a salary and you pay the equivalent of self-employment taxes on your salary. The remaining net income isn't subject to self-employment taxes.
As a rule of thumb, only consider the S corporation strategy once you’re working full-time as a content creator. Properly managing an S corporation is a lot of work. There may also be other factors at play that reduce or eliminate the self-employment tax savings generated by an S corporation.
Contrary to widespread belief, forming an S corporation is not an automatic tax savings strategy. It can be very effective in reducing your tax liability but not always. Speak to a trusted CPA or tax advisor who can help you make the decision.
How to pay quarterly estimated taxes for TikTok income?
I often see self-employed clients who had a very successful year but forgot to pay estimated taxes. These clients will unfortunately owe penalties and interest in addition to a large tax bill when filing their tax return.
To avoid this predicament, I encourage self-employed clients to make quarterly estimated tax payments.
The simplest way to make quarterly estimated payments is to first estimate your income for the year. Then, use the IRS’s Tax Withholding Estimator to estimate your tax liability. Finally, divide your tax estimate by four to calculate the quarterly installment you must make four times throughout the year.
You can make estimated tax payments by mailing a check or paying electronically through the IRS or state tax authority’s website.
I recommend paying online through IRS Direct Pay. Select Estimated Tax as the reason and 2022 as the tax year. If you choose to mail a check, be sure to include the appropriate voucher from Form 1040-ES with your payment.
Your state probably requires quarterly payments as well, if you live in a state with an income tax. Check their website for instructions on how and when to pay.
When are estimated taxes due for TikTok income?
The IRS and most states require taxpayers to make estimated tax payments at least quarterly. This means that you should make at least 4 payments prior to filing your tax return.
This is when 2022 estimated tax payments are due to the IRS.
- Q1 2022 - 4/18/22
- Q2 2022 - 6/15/22
- Q3 2022 - 9/15/22
- Q4 2022 - 1/17/23
Don’t stress if you missed one of the estimated tax due dates. You can still pay, but you may owe interest on the late payment. The interest will be calculated by the IRS when you file your tax return in the following year.
How to file your tax return
“Filing your taxes” simply means submitting a tax return (Form 1040) to the IRS or your resident state. You may or may not owe tax, depending on your income and the amount of tax you paid during the year.
Think of a tax return as a bill that the IRS sends you.
If any taxes are owed, you’ll make a payment to settle up. If you’re due a refund, the IRS will deposit the refund into your bank account via direct deposit or they’ll mail you a check.
If you’re a self-employed creator and you’re not employed elsewhere, you’ll likely only receive a refund if you made estimated tax payments during the year. If you didn’t make payments, you’ll likely owe taxes.
Here’s a general timeline of the tax filing process/
January 31st, 2023 -
- TikTok mails your 1099 to you.
- You can also download the 1099.
April 15th, 2023 -
- File a tax return or an extension on or before this date.
- Tax payments are also due on or before this date.
October 15th, 2023 -
- Your extended tax return is due on or before this date.
When are TikTok taxes due?
You should file your 2022 tax return on or before April 15th, 2023. You should also make a payment for 2022 taxes on or before this date. Meeting this due date ensures that you aren’t hit with a late filing penalty.
Of course, it’s not always possible to file before the deadline.
If you need more time, for any reason at all, you can extend the filing due date by submitting an extension request (Form 4868) to the IRS on or before April 15th, 2023. Your tax preparer or tax filing software should give you the option to file an extension, usually at no additional cost.
Bear in mind that filing an extension doesn’t extend the tax payment deadline. It only extends the tax return filing deadline. If you expect to owe taxes, you should make a payment to cover any taxes you expect to owe in addition to filing an extension on or before April 15th, 2023.
State due dates and rules on extensions vary by state. Consult the tax authority’s website of your resident state. For example, I live in Virginia so I’d look at this page for state tax information.
Gather your TikTok tax information
In January, TikTok will make your 1099 available for download or mail it to your home. Save this form, because it’s an absolutely critical input to filing your tax return.
Once you have your TikTok 1099, review your bank and credit card statements to calculate your business income and deductions for the year. Better yet: if you’ve maintained a spreadsheet or QuickBooks file with income and expenses throughout the year, this information will be ready-to-go.
Piece by piece, tax forms from other sources will become available. Scan and save these in a folder as they arrive.
Before filing your tax return, run through a checklist of all your income sources to confirm that you received a tax form from each. Missing info will result in an adjusted tax return and other IRS notices.
How to file your tax return?
Your options for filing a tax return range from filing it yourself to hiring a tax preparer to file it for you. The best option is the one that accommodates your budget, your comfort with taxes, and the complexity of your personal tax situation.
DIY options range from free to paid.
Filling out and mailing a paper Form 1040 is the old school free-file method. However, most taxpayers now file their returns electronically. Tax filing software takes you through a series of questions and completes the tax return based on your responses.
My favorite tax prep software is either FreeTaxUSA or TurboTax. Both work equally well, but FreeTaxUSA is cheaper and you may even be able to file your federal return for free. The state tax return is usually an additional charge.
At some point you should consider hiring a CPA or other tax preparer.
Working with a CPA is similar to using tax prep software, except you’ve outsourced the difficult questions to someone else. A CPA will ask questions about your tax situation and request your 1099 and other tax forms. They’ll use this information, along with their professional expertise, to file your tax returns.
How to pay your taxes?
Once you’ve filed your tax return, you’ll either make a tax payment or receive a tax refund.
You’ll make a tax payment if you didn’t pay enough tax during the year. You'll receive a refund if you paid too much tax during the year.
Your tax prep software or tax preparer will let you know the amount of tax you should pay. You can confirm the amount due for yourself by looking at lines 34 or 35a on your final Form 1040.
The best way to pay your taxes is electronically. If you’re using software to file your return, you should have the option to schedule a tax payment prior to filing your tax return. Likewise, your tax preparer can also schedule a payment on your behalf if you’ve instructed them to do so.
You may have forgotten to schedule your tax payment prior to filing, or you may prefer to delay your payment. In either case you can pay your tax liability by going to the IRS Direct Pay website. Select “Make a Payment” > “Balance Due” > “Income Tax - Form 1040” > select the tax year that corresponds to the tax year on the tax return you just filed.
Your state tax authority should also have an electronic payment website where you can pay your annual tax liability. Google [YOUR STATE] + “pay taxes online” to find out.
Need help filing your TikTok taxes?
I hope this guide was helpful.
If you want help filing your taxes or just need advice, get in touch with Augur Advisory Group. We help creatives file, pay, and plan their taxes. We might even be able to help you pay less
