There are two big reasons July is a great month for Instagram influencers.
A European summer - that means endless shots in Santorini, Paris and Croatia.
And according to Etax Accountants tax manager, Jateen Topiwala, there are a number of surprising expenses Instagram influencers can claim.
Most workers will find it tricky to decide exactly what they can claim, but it’s even trickier for influencers.
However, there are five good rules of thumb that go for both influencers and other workers.
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1. Is the item or expense directly related to your work or required for your work as an influencer?
2. Do you have a proper receipt or evidence for the item?
3. Did you pay for it yourself?
4. Did you use your own money to buy the item?
5. Did you carry the cost of the item as opposed to getting a reimbursement from the brand or item you are promoting?
If you can say yes to all five questions, then there’s a good chance you can make a claim.
Some influencers have taken to GoFundMe to fund their adventures, but Australian influencers can actually claim their travel expenses on tax, Topiwala said.
“If an influencer has to travel to events or functions, they can usually claim the cost of transport and accommodation as long as they weren’t already reimbursed,” he explained. “Items they can often claim include, flights, public transport, meals and hotel rooms.”
Home office expenses
When influencers aren’t creating content, they’re likely editing photos, posting on social media, consulting with brands and sending invoices from their home office.
Youtube personalities may even have a dedicated home office for shooting content.
“They can likely claim and apportioned amount of running expenses for items like electricity, heating and computer equipment. Plus, if they’ve purchasing lighting or video recording equipment to use for their content creation, that can usually be claimed as well,” Topiwala said.
“If they’re operating as a sole trader under their own ABN they can generally claim those purchases in full, otherwise if they’re earning income as an employee items over $300 will need to be depreciated.”
Phone and internet expenses
It’s hard to be an influencer without a phone, and practically impossible without internet.
“That means they can likely claim a portion of their phone and internet bills as a deduction on their return. They should keep a diary of their use over a month to work out how much of their total use is work related,” Topiwala advised.
As Topiwala explained, the fundamental distinction influencers need to make is whether the brands they’re promoting are paying them as a contractor or as an employee.
The best way to pick this is if you receive a regular payslip which has tax withheld on it, or if you receive a lump sum payment.
“For those influencers who are working under an ABN, they’re not paying any tax on their income when they receive it, so they will be required to pay the tax when they submit their tax return,” Topiwala said.
“Therefore, we’d suggest influencers set aside at least 30% of any payments they receive to ensure they don’t get a nasty shock at tax time. In addition, if an influencer earns about $75,000 as a sole trader they will also need to register for GST.”
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