21 Tax Deductions for YouTube Creators
One of the easiest ways to reduce your tax bill for the year is to claim all of the tax deductions or “tax write-offs” available to your YouTube business. But plenty of YouTubers miss out on these tax savings because they don’t know which expenses they can claim, or how to claim them.
To help you learn the basics and reduce your taxes for the year, here’s a list of common tax deductions for YouTubers.
For every deduction you plan to claim, make sure you keep all of your receipts. And ask your CPA to review and maximize all of the deductions you’re hoping to claim before you file your return.
What is a tax deduction?
A tax deduction is an expense that lowers your tax bill by reducing your business’s taxable income. Deductions are typically business-related expenses that you incur during the tax year. In certain cases, some personal expenses may reduce your annual taxable income, too.
For an expense to qualify as a tax deduction, the IRS requires that the expense must be “ordinary and necessary” to running your business.
You’ll also need to keep receipts and records of the expenses you’re deducting so you can prove that it was an eligible deduction if your business ever gets audited by the IRS.
The top tax deductions for YouTubers
Here’s a list of the tax deductions that are commonly available to YouTubers who are registered as a sole proprietor, limited liability company (LLC), or partnership.
Use this table of contents to jump to the section you need.
- Advertising and promotion
- Bank and payment processing fees
- Business meals
- Business moves
- Business supplies
- Business use of your car
- Depreciation
- Education
- Employee salaries and benefits
- Home office
- Independent contractors
- Interest
- Phone and internet
- Professional services
- Rent
- Shipping and postage
- Taxes and licenses
- Travel
- Software
- Subscriptions and memberships
- Personal expenses
Advertising and promotion
Are you using any kind of paid promotion to grow your channel? Any costs associated with advertising and promoting your business are 100 percent deductible.
These can include things like:
- Hiring a designer to create a logo or video thumbnail
- Purchasing ads to promote your channel
- Running a paid social media campaign
- Influencer sponsorship fees
- Sending promotional cards to subscribers and partners
- Sponsoring an event
- Printing flyers and posters
- Stock music and stock footage used for promotional purposes
- The cost of any free merch you send out for promotional purposes
Bank and payment processor fees
If you have separate bank accounts and credit cards for your business, any bank fees you’re charged for those accounts are tax deductible.
If you take online payments, you can also deduct payment processor fees and charges.
So keep track of expenses like:
- Annual credit card fees
- Monthly service fees
- Overdraft fees
- Transfer fees
- PayPal fees
- Stripe fees
- Patreon fees
Business meals
If you have a business meeting over lunch, or you take a channel sponsor out for some drinks, keep the receipts! Costs related to business meals and entertainment are generally 50% deductible.
To qualify for the deduction, your meals and entertainment expenses need to meet the following IRS criteria:
- The meal is provided to a current or potential business customer, client, consultant or similar business contact
- The meal isn’t lavish or extravagant under the circumstances
- The cost is directly related to the active conduct of a trade or business or incurred immediately before or after a substantial and bona fide business discussion
- An employee or the business owner is present at the meal
- If you provide the meal during or at an entertainment activity, the food and beverages must be purchased separately from the entertainment, or the cost of the food or beverages must be stated separately from the cost of the entertainment on one or more bills, invoices, or receipts
If you plan to deduct a business meal or business entertainment cost, the receipt needs to include the amount of each expense, when and where the meal took place, and the business relationship of the person you dined with.
It’s a good idea to write down the purpose of every meal and what you discussed on the back of the receipt (or in your expense app, if you use one) to keep track of this info.
You can also deduct 50% of the cost of buying meals for employees (think: buying pizza for dinner when the team is working around the clock on your latest edit). Meals provided at office parties and picnics are 100% deductible.
Business moves
Did you move to a new studio or home office this year? You can deduct the cost of moving business equipment, supplies, and inventory from one business location to another, as long as the costs are directly related to the move of your business.
Keep solid records that prove your moving costs were business-related. It’ll make your life much easier if you ever have to deal with an IRS audit.
Supplies
Every YouTuber needs a variety of supplies to keep their business running. Make sure you keep the receipts for these expenses, because the IRS lets you claim supplies in a few different ways.
Here are some of the supplies you can deduct on your return:
- Business supplies: things like pens, envelopes, pens, etc.
- Props or items you needed for making your videos
- Cords and adaptors for your computers, cameras, mics, etc.
However, there are some things to keep in mind before you claim these expenses:
- You can only deduct the costs of business supplies that are used up in the current tax year. Which means that you can’t go out and buy a large quantity of printer paper in December and write it off as an expense on your return because there’s no way you could use the paper (i.e. the supplies) up during the tax year.
- To claim the full cost of business supplies as a tax deduction, the supplies need to be used exclusively for business purposes. So if you’re using that Kylie Jenner brush kit or your videos, and for everyday personal makeup, you might only be able to claim a percentage of the cost as a deduction — or you may not be able to claim it at all.
- Some of your business supplies might actually be classified as business equipment (i.e. depreciable asset), which is a tricky deduction to calculate and file.
Categorizing and deducting the cost of business supplies is easy to get wrong.
We strongly recommend that you ask your CPA to categorize and file these business expenses for you.
Business use of your car
If you use your vehicle for business purposes from time to time — driving to collab with another YouTuber, driving to a meeting with your team, etc. — you can deduct the business-related costs on your tax return.
There are two methods for deducting business-related vehicle expenses — the standard mileage rate ($0.57 per mile in 2020, but this changes every year) and the actual expense method — and you can choose whichever one gives you a greater tax benefit.
Ask your accountant to figure out which is the better method to use, and use an app like MileIQ to track your business-related mileage so you can claim it as an expense come tax time.
Oh, and one thing to note: if you work out of an office or studio, you can’t count the miles driven while commuting between your home and your office/studio if it’s your regular place of business. That mileage is considered personal commuting expenses.
Conference fees
If you’re going to VidCon, Playlist Live, BeautyCon, or any other kind of conference that’s helpful for running and growing your YouTube business, we have good news.
Conference fees are deductible, provided that attending the conference is a business-related expense.
Oh, and if you’re traveling to get to the conference, hold onto all of your receipts. Business-related travel expenses are deductible, too.companyciation
Laptops, cameras, studio equipment… being a YouTuber isn’t cheap.
Thankfully, the cost of business equipment is deductible. The bad news is that you can’t always deduct the full cost of these items one go. Instead, if IRS depreciation rules classify your purchase as a depreciable asset, you’ll have to deduct a percentage of the asset’s cost each year over a number of years.
Generally, you can deduct 20% of the cost of filming equipment over the course of 5 years.
Here’s a quick example of how depreciation works:
Let’s say you buy a new Macbook Pro for $2000. You use the computer exclusively for your YouTube business — video editing, emails, business activities, etc. — so the cost is 100% deductible.
However, because the IRS classifies computers as “five-year property”, you can’t deduct the full $2000 on your tax return that year.
Instead, you’ll deduct the annual depreciation amount on your tax return every year over 5 years.
$2000 / 5 years = You can deduct $400 on your tax return per year for 5 years.
Now that you understand how depreciation works, are you ready for the plot twist?
There are some cases where you might be able to claim 50% or even 100% of the cost of a depreciable asset in the first year of owning the equipment.
Needless to say, depreciation is a tricky deduction to figure out. The best way to make sure you’re maximizing it on your tax return is to keep your receipts for big-ticket items and have your accountant take care of it before filing.
Education
Expenses for any education that “maintains or improves” the skills you need to run your business are fully deductible.
Education costs for YouTubers might include things like:
- Video editing courses
- Sound editing courses
- Online and in-person classes to improve skills in your niche
- Educational books relevant to your niche
- Subscriptions to professional or trade publications
Just note that the cost for any education that would qualify you for a new career, or the cost for education that falls outside of the realm of your current business’s focus, will not qualify as tax deductions for your business.
Employee salaries and benefits
If you’ve already hired employees for your YouTube business, congrats! That’s a huge step.
Employee salaries, benefits, and paid vacation time is generally tax-deductible costs provided they meet the following criteria:
- The salary is reasonable, ordinary, and necessary
- The “employee” is not the sole proprietor, a partner, or an LLC member
- The services were actually provided
Home office expenses
If you film or edit videos from your home, you might be able to deduct a portion of your home costs like rent and utilities under the home office deduction.
You can choose to deduct home office expenses in one of two ways: the simplified method, or the regular method. Ask your accountant to decide which method is better for your business before you claim it on your tax return.
And be aware that to qualify for this deduction, your home office needs to meet the following criteria.
1. Regular and exclusive use
You need to use your home office exclusively for conducting business activities — filming videos, answering emails, meetings with your team, things like that.
While you don’t need to dedicate an entire room to your business, your work area should have clearly identifiable boundaries. Unfortunately, this means that a desk that doubles as your kitchen table won’t qualify as a home office.
2. It needs to be your principal place of business
You need to spend most of your time running your business from your home office and you conduct essential business activities there.
Independent contractors
Unless you’re at the stage where you’re hiring full-time employees, it’s pretty likely that everyone on your YouTube team is an independent contractor.
Contractor fees are tax deductible, so keep track of payments you make to:
- Freelance editors
- Freelance designers
- Freelance film crew members (Director, AD, DOP, Grip, etc)
- Virtual assistants
- Social media managers
Also, for each independent contractor that you pay at least $600 during the tax year, make sure you:
- Require them to send you a signed Form W-9 (preferably before you pay them).
- File a Form 1099-NEC — one copy goes to the contractor, the other copy goes to the IRS.
Insurance
The premiums you pay for business insurance are fully deductible.
This might include things like:
- Liability or malpractice insurance
- Property coverage for your video equipment, studio furniture, or buildings
- Business interruption insurance that covers you for any lost profits in the event that your business is shut down due to fire or another cause
- Group insurance (e.g. health, dental, vision) for your employees
- Workers compensation coverage
- Auto insurance for business vehicles
- Life insurance that covers employees (you can deduct this as long as the business or you, the business owner, are not listed as a beneficiary on the policy)
Interest
If you take out a loan or use a credit card to cover business expenses for your YouTube business, the cost of any interest you pay back to your lender or credit card company is fully tax deductible.
To claim interest as a business deduction, you’ll need to meet the following requirements:
1. You need to be legally liable for the debt
If you took out the loan, or your name is on the credit card, and you’re legally liable for paying it back, any interest is deductible.
If your parents take out a loan for you in their name, and you are not legally liable for the debt, then you can’t deduct the interest as a business expense — even if you pay your parents back for the loan plus the interest.
2. You and the lender both intend for the debt to be repaid
If the loan is a gift that doesn’t need to be repaid — the interest isn’t deductible.
3. You and the lender have a true debtor/creditor relationship
If you use the accrual method for your business accounting, you can’t deduct interest owed to someone you’re related to until the payment is made.
One other distinction — if you take out a loan that’s part business, part personal, you can only deduct the portion of the interest that’s business-related.
Phone and internet expenses
You can’t be a YouTuber without a speedy internet connection. And it’s likely that you use your phone for business too.
Provided these costs are business-related, they’re tax deductible.
The only catch is that if your phone or internet plan is for business and personal use then you can only deduct the business-related percentage of each bill.
Here’s an example of how this works:
Let’s say you use your phone 50% of the time to run your YouTube business — filming, editing, and uploading videos, or even for answering comments on your channel. That’s all business-related. But the other 50% of the time the phone is for personal use — calling family and friends, checking social media, taking selfies.
In this example, you could only deduct 50% of your monthly cell phone bill as a business expense.
Professional services
Did you hire a lawyer to register your YouTube business, or an accountant to file your last tax return? Legal and professional fees that are related to running your business are fully deductible.
This deduction might include fees for:
- Lawyers
- Accountants
- Bookkeepers
- Tax consultants
- Online professional services (e.g. LegalZoom)
Similar to some of the other deductions we’ve covered above, if you hire a pro to help you with an issue that’s business-related and personal (e.g. making a will), you can only deduct the portion of the fee that’s business-related.
Rent
Rent for business property is deductible, provided it’s (yep, you guessed it) a business-related expense.
So if you rent a studio or an office for your YouTube business, you can deduct the rental payments as a business expense.
Shipping and postage
Sending a letter to your lawyer, or mailing some merch to your fans? Costs for business-related shipping and postage are generally fully deductible.
These may include things like:
- Postage and handling fees
- P.O. Box fees
Software
The cost of software (and software subscriptions) that you use to run your business is generally fully deductible.
This could include fees for things like:
- Video editing software
- Photo editing software (e.g. Sketch, Affinity)
- Cloud data storage
- Transcribing services
- Accounting software
- Monthly software subscriptions (e.g. Adobe, Shopify)
- Insurance for your computers and filming equipment
- Website hosting
- Domain name purchases and renewals
- Website plugins and themes
- YouTube SEO software
- Tax and accounting software
If you use the software for business and personal purposes, only the business-related portion of the expense is deductible.
Subscriptions and memberships
As a business owner, you can deduct the cost of subscribing to “professional, technical, and trade journals that deal with the business”. So if you’re a beauty guru and you subscribe to a beauty trade publication, that cost is generally tax-deductible.
Similarly, if you’re a member of a professional organization related to your niche — unions, guilds, etc. — you can often claim the membership fees as a business tax deduction.
Taxes and licenses
All of the taxes and license costs related to your business are deductible.
Depending on your business structure and the nature of your business, these might include:
- State income taxes
- Franchise taxes
- Payroll taxes
- Personal property taxes
- Real estate taxes paid on business property
- Sales tax
- Excise taxes
- Fuel taxes
- Business licenses
Travel
Some YouTubers make a full-time career out of filming in far-flung destinations, while others stay closer at home.
No matter where you land on that spectrum, you’re probably racking up a few travel expenses during the tax year — and these can typically be deducted on your tax return.
Local travel
When you travel close to home for your YouTube business — driving to a nearby filming location, grabbing a taxi to meet up with your editor — you can claim the transportation expenses as a deduction on your tax return.
So keep track of things like:
- Mileage
- Taxi, Lyft, and Uber fares
- Public transportation costs
- Parking fees
- Highway tolls
Interstate and overseas travel
You can also deduct the cost of expenses that you incur on long-distance trips, too.
Deductible business travel expenses include:
- Travel to and from your destination by plane, train, bus, or car
- Using a car while at a business location
- Parking and toll fees
- Transportation costs while you’re on a business trip (taxis, Uber/Lyft, public transit)
- Meals and entertainment (50%)
- Accommodation costs
- Tips
- Dry cleaning while you’re on a business trip
- Business calls
- Fees for shipping baggage or filming equipment to your destination
- Any other “ordinary and necessary” expenses incurred during your business travel
How to deduct business-related travel costs for your YouTube business
To qualify as a deduction, the needs to meet the following IRS criteria:
- The travel needs to be outside of your “tax home”
- The travel needs to be “ordinary and necessary” for running your business and generating income
It shouldn’t surprise you that the IRS heavily scrutinizes business travel expenses, so don’t try and write off a 2-week holiday in Japan.
Document all of the business-related reasons for the trip (who you met with, where you filmed, etc.). Keep every receipt and invoice. And have your accountant decide what you can and can’t deduct.
Mixing business and pleasure? You can still deduct the business-related expense of the trip.
If you mix business and pleasure on a trip — e.g. Your 10-day trip to Peru includes 5 days of filming for your restaurant review YouTube channel (business) and 5 days of hiking to Machu Picchu (personal) — you can still deduct the business-related travel expenses for the trip. But you’ll need to foot the bill for the personal expenses on the trip.
Things can get complicated when determining the split between business and personal expenses on an extended trip, so keep your receipts and have your accountant do the math.
Personal tax deductions for YouTubers
The tax deductions we’ve covered so far are business deductions. But there are a handful of other tax breaks you may be able to claim on your individual tax return.
As always, keep a receipt for every expenditure and have your CPA verify that it’s a deductible cost before filing your return.
Charitable contributions
Sole proprietorships, LLCs, and partnerships can’t deduct charitable contributions as a business expense, but you (the business owner) might be able to claim charitable donations to a qualified organization as a deduction on your personal return.
Child and dependent care expenses
If you pay someone to care for a child or dependent while you work, you might be able to claim the Child and Dependent Care Credit. The credit is worth between 20% and 35% of your allowable expenses, depending on your income, and it’s capped at $3,000 for the care of one dependent and $6,000 for the care of two or more dependents.
Retirement contributions
Contributions to employee retirement accounts are a business expense. But if you’re contributing to your own retirement fund, then you’ll need to claim this expense on your personal tax return. Follow these instructions on calculating your retirement plan contribution and deduction, or have your CPA do it for you.
Health care expenses
Out-of-pocket medical costs (e.g. prescription costs) can also be claimed as itemized deductions on your personal return.
And as a self-employed business owner, you can also deduct the cost of health insurance premiums for you, your spouse, and your dependents.
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If you made it this far, you’re a legend. Learning about taxes isn’t the most fun you’ll have as a business owner. But understanding the basics can help you reduce your tax bill, ask your accountant the right questions, and make smarter financial decisions that grow your YouTube revenue over the long-term.
When it comes to YouTube tax deductions, as long as you know what you can deduct, and you keep receipts and invoices for every purchase, you’ll be in a great place to work with a CPA and reduce your tax bill when it’s time to file your return.
If you want more guides like this to help you manage your finances and grow your YouTube business, subscribe to the Juice blog.
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Disclaimer: This guide is to be used for informational purposes only and does not constitute legal, business, or tax advice. Readers should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Juice assumes no liability for actions taken in reliance upon the information contained herein.
