Patreon is a game changer for content creators. The affordable memberships enable fans — or “patrons” — to support their favorite artists, podcasters, musicians, and more.
Unfortunately, like all good things, the IRS has a funny way of ruining it.
That’s right! We’re talking about your taxes. In this article, I’m going to cover everything you need to know about how to handle taxes on your Patreon income.
Is Patreon income taxable?
Yes. Income earned on Patreon is considered “self-employment income” by the IRS. Any person who earns non-W-2 income through their own effort is automatically classified as a “sole proprietor” for tax purposes — meaning, the owner of a one-person business.
As a business owner, you’ll have to pay two types of tax: income and self-employment.
You have to pay income tax on almost all income you earn in the US, including from day jobs and self-employment.
Income taxes are “graduated,” so the rates increase as your income grows. They start at 10% and go up to 37%.
Higher earners pay higher rates — but only on a fraction of their income. For example, even if you manage to rake in a whopping $600,000 on Patreon, you’ll only be taxed at 37% for the “top” $60,099 of your income.
And everyone — even the top Patreon earners — get taxed at 10% on their first $10,000 or so.
You can lower your income taxes using all kinds of tax breaks, including:
- Your standard deduction, which every American taxpayer can claim
- Qualified business income deduction, which is available to most self-employed people — including all Patreon creators
- Income adjustments, like your self-employed health insurance
- Tax credits, which lower your tax bill dollar for dollar
Self-employment taxes only apply to business income, such as your Patreon earnings. They have a flat 15.3% tax rate.
Unlike income taxes — which you can reduce with all kinds of strategies — self-employment taxes can only be lowered with business write-offs.
How to lower your Patreon taxes with business write-offs
A write-off is a work expense that you pay and aren’t reimbursed for. These expenses can be used to reduce your taxable income.
How tax write-offs work
For example, say you:
- Earn $500 selling artwork
- Spend $200 on paint and canvases
Your taxable income would be $300. That’s how business write-offs reduce your self-employment taxes: they lower the amount you can actually be taxed on.
Many self-employed people struggle to keep track of all their write-offs throughout the year. As a result, they miss out on valid deductions when they file, which means they overpay the IRS.
This is why Keeper got its start: to help independent content creators and other self-employed people stop missing out on tax breaks. Our app connects to your bank and credit card accounts and automatically helps you find your eligible business write-offs.
What write-offs can you claim on your Patreon taxes?
It’s common for self-employed workers to cautiously underreport their write-offs because they don’t consider themselves “real business owners.” Artists and creatives — who regularly deal with customers undervaluing their work and haggling prices — may feel especially uncomfortable claiming write-offs.
If that sounds like you, snap out of it. Whether you feel like it or not, the IRS thinks you’re a business, and your tax bill will reflect that. That’s why you shouldn’t think twice about claiming all the write-offs you can.
Some write-offs are no-brainers. They’re expenses that nearly everyone on Patreon will likely have. You shouldn’t hesitate to write these off on your taxes.
- 💲 Patreon fees
- 🎬 Production software
- ✨ Marketing
- 🎙️ Sound equipment
- 📹 Film equipment
- 💻 Computer
- 🔌 Electronics
- 📱 Cell phone bill
- 🤝 Contractor fees
- 🌐 Hosting fees
- 🧨 Video props
- 🍔 Work meals
- ✈️ Travel expenses
- 🏠 Home office deductions
- 📚 Education and research
Industry-specific tax write-offs
Some write-offs are context-dependent. Meaning, you might be able to claim them based on the type of business you have.
What counts as a write-off in one field may not count in another. For Patreon, the type of content you create can matter too. For instance, a yoga instructor couldn’t write off utility gloves, but a beekeeper could.
Let’s look at some Patreon-specific examples:
Podcasts are a huge chunk of the creative content on Patreon. Those creators have their own, unique write-off opportunities, such as:
- 🎭 Attending podcast live shows
- 👂 Soundproofing your home office or studio
- 📚 Research costs such as museum tickets, books, or seminars
Any work connected to producing, advertising, or showcasing your podcast would count as a write-off.
Artists on Patreon sell their work, give tutorials, and take commissions. Here are some examples of costs they could write off:
- 🎨 Art supplies
- 💿 Software subscriptions
- 🖼️ Visiting art galleries and showrooms for research
- 📦 Packaging and shipping
- 🪴 Art storage and care
Regardless of whether you’re making art in traditional or digital media, any costs for creating, storing, or showcasing your artwork counts as a write-off.
Patreon creates space for musicians to release their music to their fans first. Here are a few examples of write-offs they could claim:
- 🎶 Spotify subscriptions
- 🎸 Instrument care and maintenance
- 🗣️ Vocal coaches and music lessons
- 🎭 Concert tickets or other live performances
In addition to the cost of creating music, any expenses you incur while promoting new albums or songs would count. Don’t forget about things like merchandise and album artwork.
A personal favorite of mine, sketch comics are huge on free platforms like YouTube and TikTok. On Patreon, these performers provide exclusive content for their biggest fans. Examples of write-offs they could claim include:
- 🥸 Props and costumes
- 🎢 Location fees for filming (such as park tickets)
- 🎭 Comedy clubs and other live comedy shows
- 🛡️ Liability insurance
With this line of work, odds are there are going to be some unusual expenses. If it’s needed to create the content, you can likely write it off.
What can’t you write off on your taxes?
While I want to say sky’s the limit, unfortunately, that’s not the case. The IRS specifically prohibits some expenses — even if they’re good for your business. These are:
- Fines and driving tickets
- Medical costs
- Meals you eat alone (even while working)
- Commuting mileage (driving from home to work)
The items on this list are deemed strictly personal. While there can be exceptions, those tend to be in very specific situations — like a branded hoodie that you use to promote your podcast. Read the linked articles to learn more.
How to file your Patreon taxes
Now for the fun part: how to report and pay taxes on your Patreon income.
Note: This will only apply to US citizens and residents (including undocumented immigrants who count as residents). If you’re a citizen of another country and operate outside of the US, skip to the section on Patreon taxes for non-residents.
Step #1: Gather your tax documents
US residents earning will get a 1099-K at the end of the year as long as they:
- Made at least $20,000 from the platform
- Had at least 200 separate transactions
(The IRS was supposed to lower the bar here in 2022, dropping the threshold down to just $600. But they decided to delay this rule change by a year.)
This form reports your total earnings on the platform. A copy will be sent to the IRS as well.
Note: Any Patreon fees deducted from your pay will already be taken out on your 1099-K. For example, if you earned $200 but only received $180 because $20 was taken as a Patreon fee, your 1099-K will report $180.
What your Patreon 1099-K doesn’t include
On the other hand, the 1099-K doesn't take out any payment processing fees paid to platforms like PayPal and Hyperwallet.
Be sure to write off these off as a business expense on your taxes! You can claim it on box 10 of your Schedule C (which I’ll take about in more detail in the next step).
It also doesn't take out any refunds you made to patrons.
How to get your Patreon 1099-K
Your 1099-K will be available under the Payouts tab of your Patreon account, in the section labeled “documents.”
For more information on your 1099-K form, Patreon created a FAQ page specifically for your questions.
Step #2: Fill out your tax forms
When it comes time to file your taxes, here are the key forms you’ll need:
You may need a few more than that, but those are the big ones. (For example, if you plan to claim a home office deduction, you’ll also need Form 8829, and if you want to depreciate a car, you’ll need Form 4562.)
If you’ve filed taxes in the US before, you’re probably familiar with the Form 1040, which is the main tax form individuals send to the IRS disclosing their income. Schedule SE is where you calculate your self-employment tax.
In between, there’s Schedule C. It’s so important, it’s worth talking about in greater detail.
Schedule C: The Holy Grail for self-employed taxpayers
Now that you have Patreon income, you’ll need to get comfortable with this important form. Your Schedule C is what you use to report your business income and expenses.
List your 1099-K income form here, along with the write-offs that we covered above. You’ll report your remaining income (or loss) on your 1040 return.
Not feeling up for this step? Consider filing through Keeper! We specialize in filing self-employment taxes and can even track your business write-offs in our app throughout the year.
Step #3: Pay your taxes
You settled up when you file your taxes in April. But technically, this isn’t actually when your taxes are due.
The US operates on a pay-as-you-go system, which means taxes are due when your income is earned. (That’s why employers withhold taxes from employees’ paychecks throughout the year.) Here’s how that works for self-employed people.
Paying quarterly taxes on your Patreon income
As a Patreon creator, you don’t have anyone withholding taxes for you. So, if you expect to owe more than $1,000 in taxes by the time you file, you should be making estimated tax payments. (To check if that applies you to, try our quarterly tax calculator.)
These tax payments are due every quarter, on the following dates:
- April 15th
- June 15th
- September 15th
- January 15th of the next year
These taxes are based on your net income — your income minus business write-offs.
As you undoubtedly know, a content creator’s income fluctuates quite a bit month to month. With Patreon, however, you can generally depend on a steady monthly income from your fixed membership prices. That makes planning for you quarterly taxes dramatically easier than before!
How non US-residents should handle taxes on Patreon income
A number of creators on Patreon are residents of other countries, but have fans in the US. This comes with certain tax implications.
Do nonresidents have to pay taxes on their Patreon income?
As a general rule, no. Most creators who live in other countries won’t actually have to pay any US taxes on their Patreon income, thanks to what are called “tax treaties”. (More on those in a bit.)
However, if you’re a nonresident, you might still have to file taxes with the US government. That means simply submitting paperwork to the IRS (without having to pay any money at the end).
How to avoid US taxes with tax treaties
The US has tax treaties with over 60 countries. While each one is a little different, they usually let nonresidents shield all — or most — of their US sourced income from taxation.
Your income would be reported as “exempt,” as long as you list the treaty number you qualify under. That’s true even if you have to file taxes with a 1040-NR with the IRS. (More on that next!)
When do nonresidents have to file taxes on their Patreon income?
If your Patreon income is effectively connected to the US, you’ll have to file taxes as a “nonresident” for income tax purposes. That means using Form 1040-NR to report your income from US sources like Patreon.
What counts as "effectively connected"? Generally speaking, it’s when your business has physical contact with the US market. For example:
- You include merchandise or products with your memberships — items like clothing or art — which are mailed to patrons in the US
- You physically work in the US from time to time — for example, performing live shows or concerts
While there are other situations that count as well — such as royalty income — these are the most common scenarios that require Patreon creators to file taxes in the US.
Do nonresidents have to pay US tax on Patreon digital content?
No! If you only include digital content in your membership tiers, you won’t have to file US taxes on your Patreon income at all.
That’s because digital content is considered a personal service, which is taxed based on where it’s performed. So it should all be taxed in your home country, not in the US.
For instance, if you live in Denmark and offer chess tutorials on your Patreon account, your income would be sourced in Denmark, not the US — regardless of where your patrons are located.
Digital content can include any of the following (and more):
- A video
- A song
- A skit
- A podcast
- An audio book
- A tutorial
- An ebook
- A tarot reading
Bottom line: Income taxed in your home country is rarely taxable in the US.
Avoiding US taxes altogether is obviously the best-case scenario. But if you do have to file, streamlining your taxes through Keeper will set you free to do more of what you love: create top-tier content for your patrons and devoted fans!
Our app will help maximize your savings and make tax filing a breeze. You’ll be our patron before you know it!
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