If you generate income from platforms such as YouTube, Instagram, Twitch, Facebook, Twitter, TikTok or a blog to post and build up a base of followers as an influencer, this is considered a business activity and needs to be reported on your income tax return.
Types of Influencer Income:
There are a few ways to earn income on these platforms and include posting pictures, videos and blogging on social media platforms that involve product placements or promotions. The income earned can be monetary or non-monetary.
- Channel Subscription Revenue
- Advertising and Brand Advertising Revenue
- Sponsorships and Product Rewards
- Merchandise Sales & Commission on Sales
- Tips and Donations
- Free Perks Including Goods and Services
- Products, Clothes & Trips
If your total taxable supplies are more than $30,000 over four calendar quarters, you need to register, collect and pay the CRA GST/HST on all taxable sales from online activities.
Considering that the income earned is business income, that means that you may deduct business expenses and reduce tax owed on the revenue. The expenses must be directly related to revenue generated as a social media influencer and can be categorized as follows:
- Bad Debts
- Start-Up Costs
- Business Tax, Fees, Licenses and Dues
- Business Home Office Expenses
- Capital Cost Allowances
- Delivery, Freight and Express Costs
- Fuel Costs (Excluding Motor Vehicles)
- Interest and Bank Charges
- Legal, Accounting and Other Professional Fees
- Maintenance and Repairs
- Management and Administration Fees
- Meals and Entertainment
- Motor Vehicle Expenses
- Office Expenses
- Other Business Expenses
- Prepaid Expenses
- Property Taxes
- Salaries, Wages and Benefits
- Telephone and Utilities
Haven’t Reported Previous Income?
Not reporting your income from social media activites and platform sales may result in tax, penalties and interest owing. Correcting your tax reports voluntarily can reduce penalties and interest.
If you need more information on the Business Expenses or Tax Implications applicable to social media influencers, review the links here: