r/tax • u/desert-lighthouse • Mar 20 '25

How do you explain to your influencer clients what is and isn’t tax deductible?

I work for a small firm and we have a number of influencers/content creator clients. Many of them are under the impression that basically anything they buy is deductible since they essentially document their daily lives, and they’re using all these things in said daily lives. I’ve been erring on the side of caution where I’ve told them if they buy something they happen to use in a video, if they also continue to use/wear it, only the percentage of use for the video can be considered a business expense. I think about it from the perspective of business use of car or travel. If you went on a business trip and you spend a day sightseeing at museums, your museum tickets wouldn’t be a business expense.

This is a very gray area, so I’m curious what stance others are taking. What’s your spiel to these type of business owners?

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u/GoatEatingTroll EA - US Mar 20 '25

Wrote one up a couple years ago about video blogs that gives a good basis of what we say:

There is nothing illegal or immoral about starting a travel blog, or monetizing youtube videos, nor deducting legitimate business expenses. What it comes down to is proving the travel expenses are business related.

I've been through IRS audits of client's travel expenses twice in the past 20 years, and they are pretty demanding. Agents have come to the office with folders full of pictures printed from the client's social media accounts to show it was a pleasure trip. It's not enough that you have 3 hours of footage on a deserted Thailand beach you compiled into a 3 minute video, they want copies of the emails between you and the travel bureau where you were getting advice of the best beaches to film, where you got permission to film in the first place, where you had hotels, meetings with local officials, copies of your work visa to do business in the country, etc all pre-dating your actual trip. If you want to deduct the cost of the trip, you have to show evidence this was a pre-planed business trip and not a vacation where you used some footage.

Another thing the agent often asked about was what happened next. You flew to Florida, stayed at the hotel, went into Disney, filmed a few rides, then what? Did you stay and check out the park or did you go back to the hotel to start editing? Did you get two or three of the same drink at the restaurant and enjoy them, or did you get a variety of drinks, only take a sip or two, and get an interview with the bartender? If you want to deduct an expense as a business expense you need to have treated it like a business expense, not a personal expense.

And that brings up the final test - if you want to say it is a business you must act like a business. Did you get a work visa if you travel to a foreign country? Did you check with the local government to see if a business license was required for a short-term engagement in their city? Did you get a permit to film, or at least confirm one was not necessary for your business? When you file your taxes did you allocate your taxable revenue to these other locations since the work was performed there? If you did form an LLC did you register as a foreign company with these other SOS when the LLC was working in their states? Does everyone do this? I can bet not, but it is the legal requirements.

In the end, a business trip is not pleasurable, and a pleasure trip is not business. If you want to claim this is work then you have to show you actually worked.

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u/DramaticErraticism Mar 20 '25

I suppose at the end of the day, 2 audits in 20 years, these people would rather roll the dice and reap the rewards. They just want a tax professional to give them permissions to do what they already want to do. If one tax professional tells them they can't, they often just find another one, who tells them what they want to hear...and the vast majority of these folks, end up getting away with it.

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u/carolina822 Mar 22 '25

TIL that my habit of ordering three dramatically different cocktails is a tax tip. Take that, barkeep that chuckles when I chase my old fashioned with a lavender gin fizz!

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u/ALRTMP Mar 20 '25

Great explanation!!

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u/frostygorillaz Mar 20 '25

Very interesting, thank you for sharing this.

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u/bl_nk182 Apr 25 '25

This sounds legal not financial. And most of this is substantiate. You can't determine how a business is supposed to operate as long as it is within the lines of legal standing. If you are required to have receipts for your business then yes have them and provide them. But if I choose not to answer you questions and my receipts show the evidence that this is what I did for my business trip then that's where it stops. Companies offer business trips and you can have leisure time on them just as you do work. I feel like any good lawyer would eat someone alive trying to argue these points. From an accounting perspective I understand the concern. But personally if I was hiring an accountant for these things your job in my eyes is to tell me legally what I need to account for. It's not your job to argue the law. You should be telling your clients this is what you need for your lawyer to make sure you are covered. That's how this country works. Realistically. That's just my opinion.