Here's the thing nobody mentions when you start making money from brand deals: you're not an employee. Nobody's withholding taxes from your payments. That $5,000 check from a brand? It's $5,000 gross. What you actually keep after taxes is a different — and much smaller — number.
I built Tally's Tax Center because I watched a creator get a $12,000 tax bill in April that they hadn't planned for. They'd made $80,000 in brand deals the year before, spent like they had $80,000, and didn't realize they owed the IRS roughly 30% of it plus a penalty for not paying quarterly.
This is not complicated. But if nobody teaches you, you don't know what you don't know.
Your income isn't your income
When a brand pays you, they report it to the IRS if the total is $600 or more in a calendar year. They send you a 1099-NEC form. That form tells the IRS exactly how much you made. There's no hiding it.
As a self-employed creator, you owe two types of tax on that income:
Self-employment tax: 15.3%. This is Social Security (12.4%) and Medicare (2.9%). When you're an employee, your employer pays half. When you're self-employed, you pay both halves. This one surprises people the most because there's no escaping it — it applies to your full net income.
Federal income tax: 10–37%. Depends on your total taxable income and filing status. Most creators in the $30,000–$100,000 range are paying an effective rate of 12–22%.
Add state income tax if your state has one, and you're looking at a total tax rate of roughly 25–35% for most creators.
Real example: Creator earning $50,000 in brand deals
That's a 31% tax rate. On $50,000, you're paying over $15,000 in taxes. If you spent all $50,000 during the year thinking it was yours, you now owe $15,000 you don't have.
The $600 rule and W-9s
Any brand that pays you $600 or more in a calendar year is legally required to send you a 1099. To do that, they need your W-9 form — which is basically just your name, address, and tax ID number (your SSN or EIN if you have an LLC).
Send the W-9 proactively. Don't wait for brands to chase you for it. If a brand pays you $600+ and doesn't issue a 1099, the IRS still expects you to report that income. Not getting a 1099 doesn't mean you don't owe taxes — it means the brand screwed up their paperwork, not that you're off the hook.
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Quarterly payment schedule, when to form an LLC, deductions you're probably missing, and the business bank account setup.
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Quarterly estimated payments
If you expect to owe more than $1,000 in taxes for the year, the IRS wants you to pay quarterly — not wait until April. If you don't, they charge a penalty. It's not huge, but it's annoying and avoidable.
The quarterly due dates are: April 15, June 15, September 15, and January 15 (of the following year). You're estimating how much you'll owe and paying roughly a quarter of it each period.
The simplest approach: take 30% of every brand deal payment and put it in a separate savings account immediately. When the quarterly deadline comes, pay what you've accumulated. You'll either be close to even or get a small refund in April. Way better than a surprise bill.
Should you form an LLC?
This is the question every creator asks once they start making real money. The short answer: probably, once you're consistently earning $30,000+ a year from brand deals.
An LLC does two things for you. First, it separates your personal assets from your business. If a brand sues you (unlikely but possible), they can only go after business assets, not your personal savings. Second, if you elect S-corp tax status (which requires an LLC or corporation), you can potentially reduce your self-employment tax bill once you're earning above ~$50,000.
The S-corp strategy works like this: instead of paying self-employment tax on your full income, you pay yourself a "reasonable salary" and only pay self-employment tax on that salary. The remaining profit passes through as a distribution, which isn't subject to the 15.3% SE tax. On $100,000 in income, this can save you $5,000–$8,000 a year in taxes. Talk to an accountant about whether it makes sense at your income level.
What you should NOT do: form an LLC just because someone on TikTok told you to. If you're making under $20,000 a year, the filing fees and added complexity aren't worth it yet. A sole proprietorship (which is what you are by default) is fine until your income justifies the switch.
Deductions you're probably missing
As a self-employed creator, you can deduct legitimate business expenses from your income before calculating taxes. This directly reduces what you owe. Common deductions creators miss:
Equipment and software. Camera, lighting, tripod, microphone, editing software subscriptions, Canva, your phone bill (the business-use percentage), your internet bill (same), and yes — tools like Tally.
Home office. If you have a dedicated space where you create content, you can deduct a portion of your rent or mortgage. The simplified method is $5 per square foot, up to 300 square feet ($1,500 max).
Content creation costs. Props, wardrobe (if purchased specifically for content), makeup and hair (for shoots), travel to shoots, meals during brand meetings. Keep receipts for everything.
Professional services. Accountant fees, legal fees for contract review, business insurance.
Education. Courses, workshops, and conferences related to content creation or business management.
What to do right now
If you haven't been paying quarterly: Don't panic. Calculate roughly what you owe (30% of your year-to-date brand deal income minus any deductions), pay what you can on the next quarterly deadline, and get caught up. The penalty for late quarterly payments is an annoyance, not a crisis.
If you're making over $30,000/year: Talk to an accountant. Not your friend's accountant. Not TurboTax. An actual CPA who works with self-employed people or small businesses. A one-hour consultation costs $200–$400 and will save you thousands in the long run.
If you're just starting out: Set up the 30% savings habit now, before you have any money. It's way easier to save 30% from the first check than to retroactively save it after you've been spending 100% for a year.
Track your 1099 income automatically.
Tally's Tax Center tracks income by brand, flags who owes you a 1099, manages W-9s, and keeps everything organized so April isn't a nightmare.
Try Tally Free →The bottom line
Creator taxes aren't complicated. They're just different from what you're used to if you've ever been an employee. Nobody withholds for you. Nobody sends you a neat W-2 with everything calculated. You're responsible for knowing what you owe and paying it on time.
The creators who get burned are the ones who ignore this until April. The ones who don't are the ones who set up a system early — separate bank account, 30% savings rule, quarterly payments — and then forget about it until the check clears.
This article is for informational purposes only and is not tax advice. Consult a qualified tax professional for advice specific to your situation.