The rule that starts everything is short: if your net earnings from self-employment reach $400 in a year, the IRS expects you to file an income tax return, and those earnings are subject to self-employment tax on top of income tax. A creator who sold three videos in March has usually crossed that line before understanding what it means. Nothing registers you, nothing warns you, and the brand that paid you will report the payment to the IRS on its side once it reaches the reporting threshold. The status exists whether or not you chose it.
This guide covers the federal layer for a creator who is a US person and works alone, which is the common case. It names what the IRS and the Small Business Administration say, in the order a first year actually happens, and it stops where a state's rules or a tax professional begin.
You are a sole proprietor whether or not you decided to be
The IRS defines a sole proprietor as someone who owns an unincorporated business by themselves, and the SBA adds that you are automatically considered one if you do business activities without registering as any other kind of business. A creator invoicing brands under their own name is therefore already a business in the eyes of both agencies, with no form filed. The IRS's own list of who is self-employed includes anyone carrying on a trade as a sole proprietor or independent contractor, including part-time and gig work, which describes a creator with a day job and three clients as well as it describes a full-time one.
A trade name is not a company
Sole proprietors may operate under a trade name, and many creators do, on invoices and on a website. The SBA is explicit that this changes nothing about liability: a sole proprietorship's assets and liabilities are not separate from the owner's, and the owner can be held personally liable for the debts and obligations of the business. The name on the invoice is a label. The person behind it is still the person.
What an LLC changes, and what it does not
A limited liability company protects its owner from personal liability in most instances, in the SBA's words, so that personal assets such as a vehicle or a house are not at risk if the business is sued or fails. That is the reason creators form one, and it is a real reason, particularly once shoots involve other people, locations and equipment. What an LLC does not do by itself is change the tax picture: the IRS notes that the sole member of a domestic LLC who elects to treat the LLC as a corporation is not a sole proprietor, and the SBA adds that, without such an election, an LLC's profits pass through to the owner's personal income and its members are considered self-employed, so the taxes described below still apply. An LLC is a liability decision first and a tax decision only if you make it one, with advice.
The two taxes on the same dollar
Income tax on the profit
Business income and expenses go on Schedule C, Profit or Loss from Business, attached to the Form 1040 return. The number that reaches the return is the profit, not the revenue: the cost of the equipment, the software and the other expenses of producing the videos reduces it, within the rules the IRS sets out in Publication 334, its tax guide for small business. Which expenses are deductible is a question for that publication and for a professional; what this guide can say is that the tax is on net earnings, which is why keeping every expense is worth the effort from the first invoice.
Self-employment tax at 15.3%
The second tax is the one that surprises new creators. Employees pay Social Security and Medicare through withholding and their employer pays a matching share; a self-employed person pays both shares as self-employment tax, at a combined rate of 15.3%, which is 12.4% for Social Security and 2.9% for Medicare, calculated on Schedule SE. The IRS allows the employer-equivalent half of that tax to be deducted when calculating adjusted gross income, which softens it, but a creator who set aside only what income tax would take has not set aside enough. The Social Security part applies up to an annual earnings limit that the IRS updates each year; the figure in force for a given year is on the IRS page, and this guide does not pin one.
Paying four times a year, not once
Normally nobody withholds tax from a brand's payment to a creator. The IRS therefore expects self-employed people to pay as they earn, through estimated tax payments, and the trigger is precise: sole proprietors generally have to make estimated payments if they expect to owe $1,000 or more when the return is filed. The worksheet in Form 1040-ES is how the amount is calculated, and the IRS states that a penalty may apply if not enough tax is paid through estimated payments, or if the payments are late, even when a refund is due at filing. Unless the IRS's exception applies (among its conditions, no tax liability at all in the prior year), a creator whose income arrived in the second half of the year and who paid nothing until April has, in the IRS's framework, paid late.
The practical habit is to move a fixed share of every payment into a separate account on the day it arrives, before it looks like income. The share depends on the creator's bracket and state, which is why the first year is the one to spend with a professional; the habit is the same at every bracket.
The forms, in the order they arrive
| Form | Who produces it | When | What it does |
|---|---|---|---|
| W-9 | You, for each brand | Before the first payment | Gives the brand your taxpayer identification number so it can report what it pays you |
| 1099-NEC | The brand, to you and the IRS | After year end | Reports payments once they reach $2,000 for tax years beginning after 2025 |
| 1040-ES | You | Four times during the year | Estimated payments of income and self-employment tax |
| Schedule C | You, with the 1040 | At filing | Profit or loss of the business |
| Schedule SE | You, with the 1040 | At filing | Self-employment tax on the net earnings |
A first year, in three steps, before the professional does the rest:
- Answer the W-9 request from the first brand with a correct taxpayer identification number, a Social Security number or an Employer Identification Number, and keep a copy.
- Open a separate account for tax money and move a fixed share of every payment into it on receipt.
- Track every expense of producing the videos from the first month, because the tax is on the profit and a receipt that was not kept is an expense that does not exist.
The state layer
Federal tax is only one layer. Most states tax personal income too, at their own rates and with their own rules for self-employed people, and this guide does not restate fifty of them. One exception can be stated from a primary source: the Texas Comptroller states that Texas has no personal income tax and that sole proprietorships are exempt from its franchise tax, and counts Texas among five states that levy no business tax, personal income tax or fee on sole proprietors, alongside Alaska, Florida, South Dakota and Wyoming (a 2016 Comptroller article, so check the current position of any state before relying on the list). A creator in Houston and a creator in Los Angeles with the same gross income keep different amounts, and the city guides for Houston and Dallas note how that shows up in local rates. Everywhere else, the state's own revenue department is the source, and a local professional is the shortcut.
Sources
- IRS, Self-employed individuals tax center
- IRS, Self-employment tax (Social Security and Medicare taxes)
- IRS, Estimated taxes
- IRS, Sole proprietorships
- IRS, About Form W-9
- IRS, Instructions for Forms 1099-MISC and 1099-NEC (12/2026)
- U.S. Small Business Administration, Choose a business structure
- Texas Comptroller of Public Accounts, Starting a New Business
Checked on 20 September 2026. This guide is not legal or tax advice. Where this guide and the official source disagree, the official source prevails.
