How to file a tax return as a blogger or influencer.
July 28, 2020
Being a blogger or influencer can really be a rewarding career with plenty of perks, but when it comes to taxes, these tastemakers experience the same complexity as self-employed workers: tax filing is a little more complicated than for those who are regularly employed by a company. Keep in mind that the deadline for filing your income tax return is still June 15, 2020 and has not been extended due to COVID-19. On the other hand, the deadline for paying your balances and instalments has been pushed to September 30, 2020.
Here's what else you need to know about how to file your tax return correctly:
How do I know if I should report my income?
You must file a tax return for your services as a blogger or influencer if you regularly earn income. If you have written two blog posts this year, it is not considered regular income. It's almost like selling a few pairs of shoes on Kijiji – that doesn't make you a shoe store owner. If, however, you write articles every month, or regularly publish sponsored content to your Instagram page, this is considered regular income and you would have to report it on your tax return.
It can be difficult for the self-employed, especially bloggers and influencers, to determine what constitutes their income. Your income should of course include the amount of money you are paid for your services as a content creator, but also a lot of other elements, which don't necessarily seem obvious. This may include the products you receive in exchange for visibility, the trips you are offered, and even advertising revenue (Google AdSense, etc.) from your website or YouTube page.
In other words, this means that if you receive a lipstick to test, and that you can keep it afterwards, you should indicate its selling price on your income tax return.
Deduct as much as possible
Without the Internet, you probably wouldn't be able to do your job. It is therefore possible for you to deduct part of these costs: hosting costs for your website or blog, Internet access costs, or even costs related to search engine optimization services fall into this category.
Other fees, such as those related to software like Adobe Photoshop, are considered capital property and can therefore be deducted at 50% for the year of purchase.
The same goes for any equipment you have to buy to do your job as a blogger – cell phones, laptops, and cameras are all capital property that you can deduct. However, you have to deduct the cost of these items over several years as the value of the property depreciates.
If you use your home as your main place of work, you can claim a portion of your home expenses (insurance, property taxes, mortgage interest charges). However, the amount you can claim depends on the percentage of the total area you use exclusively for your business.
What if I get paid in U.S. dollars?
If you are an influencer, you may be approached by U.S. companies for collaborations or partnerships, and chances are you will be paid in U.S. dollars rather than Canadian dollars.
In this case, it is important to convert all your USD income into CAD before completing your income tax return. Use the Bank of Canada’s conversion table, which shows annual exchange rates.
Use a tax calculator
It is never a bad idea to have a better understanding of your tax situation in advance, especially if you are self-employed. A tax calculator will give you an idea of how much money you may owe.
Be prepared for next year
The first few times you fill out your tax return will show you exactly how complicated this process can be. Our recommendation is simple: take note of what worked well and what didn't, and make sure you don't make the same mistakes year after year. Also configure your accounting software accordingly (if you have one) and next year's tax season will be much more enjoyable.
Last, we recommend that you speak with a Tax Expert who can guide you through the process. If you have any questions, H&R Block Tax Experts are here to help. See here for the latest information on how we’re making ourselves available to our clients during the COVID-19 crisis and how we can best serve you