Staying Zen During Tax Season with Brandie Posey

Issue #223 | March 26, 2024

I’ve spent a lot of time thinking about taxes lately, as evidenced by the last newsletter, in which I bravely took the IRS to task for not giving content creators — many of whom will be first-time filers — more of a heads-up about the new rules around taxable income this year. Even though we’re still in this technically nebulous area regarding reported earnings (under $5k and it’s cool to keep?), by this time next year the law will officially kick in requiring every platform to issue 1099-Ks to anyone making over $600.

And yes, they’re serious this time. Not like those other times, okay? And okay, if not now, then later: you bet your bottom influencer dollar that at some point in the near future you will be called on to fork over a third of those hard-earned RPM cents to pay federal and local taxes, social security, unemployment (which you’re not eligible for, btw), and Medicaid (which you are). Not that I’m out here saying that taxes aren’t a necessity — I’m not a Republican or even Libertarian — but I am saying it’s a little ironic for the United States to not recognize creators on the census bureau, allow them to form unions or guilds, or even be eligible for many of the social programs which they’re now being asked to pay for.

Lord help the auditors trying to make sense of the knotted ball of yarn that is creators’ various revenue streams (including influencer merch and travel!). It’s going to be literal chaos, as kids start their careers being thrown in the deep end of tax preparation, with dozens of income sources to account for and few instructions on how to prepare the myriad of forms necessary to just report how much money was made and who gave it to you. Many have already had their take-home pay halved by the time they get to their wallets, and there’s no clear set of guidelines on how to count expenses or make deductions. That’s what #TaxTok is for, bless. Another irony: Congress is currently trying to ban it even as they seek to profit off its regulation.

Call it a hunch: If I were a gambling type, I’d wager the IRS coming down real hard on owed back-taxes for creators in 2027. Not for any extremely speculative financial reason, certainly not, I’m just pulling a random number out of a hat here.

…but seriously, like, just how much do you want to bet? Because I’ll level with you: I’m way in the hole after winning that $1,500 in Las Vegas on a claw machine, since literally no one told me arcade game earnings are taxable, and now I’m getting penalized for winning with money that I no longer have because it was obviously all spent that night on other claw machines.

I’ll tell you, Lady Luck has a pimp and his name is Uncle Sam. (Feel free to read this whole newsletter in an extremely Tim Robinson voice.)

But for every TurboTax cloud there’s a silver lining, filed freely last Friday on Passionfruit’s Discord by comedian/podcaster/label founder/bookkeeper Brandie Posey. If you missed it, that’s okay, we’ve got it on re-run over on the YouTubes. (Please watch! We need all the tasty ad cents! My birthday is next month and I’m going back to Vegas, baby!)

While we’re required by law or something to disclose that nothing said in the discussion should be considered a substitute for personalized financial advice, I wouldn’t be doing my job if I didn’t also mention how even CPAs and expert tax professionals seem to be lost in the murky waters of content monetization.

As Posey told us, the best thing content creators of any size can do is start looking for a trio of consiglieres to stand in their corner: “A good attorney, a good accountant, and a good insurance person to make sure you’re covered.” Especially an accountant come tax season, preferably one who understands the creator economy, and isn’t a “TikTok Accountant.”

“Somebody that can set you up the right way for the first year and then show you what you need going forward,” as Posey put it, adding that, for this year at least, creators might have their backs to the wall. But that’s no excuse for not reporting your earnings, especially since you can file for a free extension till October: “As someone who knows people who have unfortunately had to learn and live that lesson, the IRS is not very quick at catching these things. So there’s certainly a sense that you can just hide.”

“I can tell you that they’ll get to it.”

Personally, I was surprised to learn that creators don’t have to register as an LLC to be considered a legitimate small business. Posey recommends that creators practice good financial hygiene: open a business bank account to conduct all work-related transactions, keep receipts, and learn ledger literacy. (Be it Acorns, Quickbooks, or even just a well-organized Google spreadsheet, documentation of legitimate work-related expenses separate from personal spending is the best way to protect yourself from or during an audit.)

The business of being a creator is…well, serious business; anyone working in the industry should approach it the same way they would owning a restaurant or a store even if most of the time you’re being told it’s not a “real job.”

“You as a creative, you’re a small business owner,” advised Posey, who admits to occasionally having to yell in her comedian colleagues’ faces. “You’re a small business owner! You run a business! I know that doesn’t sound fun and sexy, but you are a business owner…you just have to have a little bit of self-discipline around certain elements of it. That’s what separates those that rise from those that fall.”

When it comes to the side hustle, Posey says don’t write it off (but write it off, you know?). The pandemic allowed Posey to branch out into bookkeeping, an interest passed down to her by her CPA father. Because of her unique experience, Posey is able to help creators realize that financial hygiene does not have to be the antithesis of art.

“I do not think that being a starving artist makes you productive. The financial anxiety that comes with not knowing how your bills are getting paid does not help your creativity,” Posey said. “It does get in the way (creatively), to be worried about stuff.”

“You don’t want to go have a meeting with somebody that you want to be a mentor, and then you’re like, “Oh f*ck, can I even pay for our coffees?’” Posey speaks from experience: despite her many successes as an entertainer and producer, she continued working as a Lyft driver right up to the pandemic. “It doesn’t make you less of a creator if you have other gigs whatsoever to pay your bills. I’m a big believer in that… I’ve been in that position where you’re just terrified. I knew I wanted to have it in my back pocket; that at any moment, it could be “F*ck okay, I don’t want to take a gig at this horrible casino in Alabama or wherever.”

“I think that we’re allowed to choose our own paths. And grind culture is toxic; we should get that out of our heads. Your art, whether or not you make money off of it is one thing, but it doesn’t make it any less if that is not the full way that you make your income. I think it’s perfectly fine to spin several plates if it gives you the room to not have to compromise the thing that is your actual passion.”

Bars.

– Drew Grant, Editorial Director

PLATFORMS

Elon Musk Only Cares About His Free Speech

A judge ruled Elon Musk’s social platform was ‘punishing’ a nonprofit for its free speech.

By Steven Asarch, Passionfruit Contributor

elon musk next to free speech in bubbles

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We’re sorry, but it’s tax time again

Spring is here, daylight saving has started, and yes: Taxes are due. H&R Block is offering 20% off to Passionfruit subscribers for DIY Online taxes until April 15, so if you haven’t started yet, consider this your friendly reminder to get to it.

Fine, I’ll start filing

IN THE BIZ

Spotify has introduced a feature that publicly displays the number of followers for podcasts on its platform, revealing insights like “The Joe Rogan Experience” leading with 14.5 million followers, and aiming to provide a new metric for gauging podcast popularity while noting it doesn’t fully represent a show’s success.
Instagram has automatically enabled a feature limiting political content for all users by default, sparking concern among creators about reduced visibility and engagement during crucial times like election years and crises.
TikTok announces the launch of its global Youth Council, aimed at integrating teen perspectives into the app’s safety and design, supported by new research highlighting teens’ desire for direct collaboration with platforms. This initiative is part of TikTok’s ongoing effort to ensure a safe, inclusive, and engaging environment for young users.
Google has been ordered by federal investigators to disclose the identities of users who watched specific YouTube videos as part of a criminal investigation, raising concerns about privacy implications while Google asserts its commitment to user rights and legal compliance.

TIPS & TRICKS

How To Earn And Withdraw Money From Patreon

Time to get your earnings.

By Rachel Kiley, Passionfruit Contributor

READ THE FULL STORY →

PLATFORMS

Ron DeSantis in front of social media graphic

On March 25, Florida Governor Ron DeSantis signed a divisive bill.

By Charlotte Colombo, Passionfruit Contributor

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JOB BOARD

Production company Mad Realities is looking for a brand designer.
Documentarian Visual Venture is looking for a thumbnail designer and scriptwriter.
Sports YouTuber Kinny is looking for a video editor.
Science & philosophy YouTuber Aperture is looking for a scriptwriter.

YOUTUBE MADE ME DO IT

Be sure to check out the latest episode of Passionfruit Presents, where Brandie Posey, comedian and one of the hosts of the Lady to Lady podcast, shares knowledge about her well-kept industry secret superpower, bookkeeping for creators. Make sure to subscribe to the Passionfruit YouTube channel so you don’t miss more episodes like this!