New tax guidelines regarding PayPal
Does thinking about taxes cause your stomach to do a somersault? There’s no need to panic, however there is a need to prepare! There are endless pros to running an influencer business, but many would say the biggest con are the taxes - and if you’re like the majority of influencers who use PayPal or Venmo for your work, then you need to listen up!
So, what’s changed? Simply put, these apps will now have to start reporting business transactions to the IRS if they’ve totaled over $600.
How this affects a content creator
Previously, you would only receive something if you had one of the following:
- At least 200 business transactions in the year
- A combined total of $20,000
These new tax guidelines are a pretty drastic change. But, realistically, this won’t affect you if you’ve been reporting your business income. You may end up receiving both a 1099-K and 1099-MISC for the same project, which ends being more work on your end, but otherwise, you can proceed with running your business as usual.
How this affects brands
If you use a third party app, such as PayPal, to pay your content creators, you will still send out your 1099-MISCs when the time rolls around. The content creator may end up with forms from both you and the third party app, but that is for them to organize. You must still send them the form.
If you’re looking to learn more about creating content, we’re here to help! You can sign up here with our foundation plan to get access to strategy calls and any other support you may need.