Starting to make money from your creative endeavors comes a slew of financial responsibilities. One of the most important responsibilities is your tax liability. For creators earning money via Patreon, there are a number of things to keep track of from the start. That way you aren’t blindsided when tax day arrives.
(Please note that this information applies to U.S. creators who are considered self-employed for tax purposes.)
Do I Have To Pay Taxes on Patreon Income?
The short answer is yes. If you made money from Patreon as a creator, that counts as income. This applies whether that money comes from subscription fees or from digital goods through their Commerce platform.
Does Patreon Withhold Taxes?
Patreon does not withhold taxes. You must keep track of your income throughout the year and set aside estimates to pay taxes. Taxes can be paid either quarterly or yearly.
Do I Need To Fill out Tax Forms?
If you make at least $600 from Patreon in a calendar year, you’ll need to submit a W-9. This form will be accessible through your account by going to Settings > Payouts and Taxes > Tax settings, and clicking on Fill out W-9 form.
There, you’ll have to provide your legal name, exempt status, address, and taxpayer identification number. For most people, this will be your social security number.
The W-9 has to be submitted to Patreon before the end of the calendar year. If any of the information on it changes, you’ll have to submit a new form to update your records.
Will I Get a Tax Form From Patreon?
Currently, Patreon only sends out tax form 1099-K to creators who meet one of two criteria. First, you make at least $20,000. Second, you had at least 200 individual transactions in a single calendar year.
There are a few exceptions for residents of states with lower thresholds. Oregon, for example, requires the form to be sent regardless of earnings.
But even if this doesn’t currently apply to you, keep an eye out. The IRS plans to shift the federal threshold so that creators who earn just $600 or more receive this form. The change is slated to kick in for the 2024 tax year.
It’s also worth noting that the threshold applies to all creator pages you have with Patreon. However, your forms will be separate for each page you have.
Where Can I Find My Patreon 1099-K?
You can find your 1099-K on Patreon’s website, via your creator page. Just go to Payouts > Documents and scroll down to the Income Tax section. There, you’ll find each individual year that you’ve had a Patreon page listed. This is also where you’ll find earnings and downloads for your Form 1099-K, when applicable.
Depending on your account settings, your 1099-K also may be sent through the mail. You can swap to exclusively accessing it online under Settings > Billing and payouts.
What’s on Form 1099-K?
Your Form 1099-K shows your gross income—or the full amount you earned from Patreon. Gross income is your income before fees are taken out. So if you have 100 subscribers at $5 per month, you may have only received somewhere around $415 from Patreon. However, you’ll owe taxes on the initial $500.
If that seems unfair, don’t worry. Patreon fees are among the items that can be written off as business expenses. This lowers your tax liability—but you do have to start with the initial, or gross, amount.
How Do I Track My Patreon Income for Taxes?
There are plenty of tools and apps available for keeping track of your income and expenses as a creator. Which one is right for you depends on several factors. Consider your sources of income, the sort of business expenses you encounter, and your annual income expectations.
To keep tabs on your Patreon income, specifically, you can start by visiting the Earnings section of the Insights tab. By selecting a time range, you can scroll down and check your gross revenue by month. It also shows what you were charged in payment, platform, and app fees.
You can even easily export the data in a spreadsheet for your personal records.
Figuring Out Your Tax Rate
Estimating your tax liability ahead of time can be tricky. Especially if you don’t know how much you’re likely to make in a year. But you can start by checking the upcoming year’s federal income tax brackets.
In addition to your income taxes, you’ll likely also have to pay a self-employment tax. The current rate for this is 15.3% of your self-employed income.
The money you make from a regular job where you are considered an employee only falls under income tax. Any money you make from Patreon will be subject to both income and self-employment tax.
Deducting Business Expenses
Fortunately, there are many deductions available to lower your self-employment tax liability. With Patreon, you can deduct the fees you were charged by the platform and payment processors. They’re part of the cost of doing business.
Some other common deductions include:
- home office expenses
- equipment and tools used to create your work
- Internet and cell phone bills
- promotional costs
- business website costs
- travel expenses related to your work
Ultimately, most of the expenses that qualify for a tax write-off depend on your work. Say your patrons support you in creating music. New recording equipment, audio samples, or an online course to sharpen your skills may all be deductible expenses.
It’s a great idea to investigate the specifics of what counts as a write-off for your work early on. That way you can track those expenses throughout the year and have a list ready when tax season comes.
Setting Aside Funds, and Quarterly Taxes
Estimating how much you’ll owe in taxes from each deposit and setting aside money can save you down the line. And for creators who will owe taxes quarterly rather than yearly, that’s an even more important step.
Quarterly taxes apply to self-employed individuals who expect to owe at least $1000 when annual taxes are due. These are estimated payments based on what you believe your final tax liability will be, paid in four installments.
Be careful to get the numbers right. Your quarterly payments don’t total up to between 90% and 100% of what you owe. Otherwise, you might incur additional fees when you file your annual taxes.
The good news is that if this is your first year being self-employed or turning a profit, 100% of what you owed the previous year probably falls below the threshold. In that case, you won’t have to pay quarterly taxes just yet.
When you do have to pay, you can do so directly on the IRS website. The due dates vary slightly each year depending on weekends and holidays. However, they generally fall around April 15, June 15, September 15, and January 15 of the following year. Notice that these are not actually divided into equal three-month periods.
What About State and Local Taxes?
Depending on where you live, your tax liability may not end with income and self-employment taxes. The majority of states collect an additional income tax, as do some local jurisdictions. Find out that information early so that you aren’t hit with an unexpected tax bill.
Understanding your liability can help you have a better grasp on how much your profit from Patreon (and other creator platforms/endeavors) actually is, and adjust pricing and your own expectations accordingly.
