Simple Pin Podcast Episode Summary Episode Title: Accounting Myths People Believe
Release Date: March 12, 2025
Host: Kate Ahl
Guest: Nate from Cookie Finance

Introduction: The Overlooked Importance of Accounting for Creators

In this episode of the Simple Pin Podcast, host Kate Ahl delves into a crucial yet often neglected aspect of running a successful business on Pinterest: accounting. Recognizing that many content creators—from travel bloggers to fashion influencers—may not prioritize their financial systems, Kate brings in Nate from Cookie Finance to debunk common accounting myths that can hinder business growth and lead to costly mistakes.

Myth 1: You Only Pay Taxes If You Make a Certain Amount of Money

One prevalent misconception among creators is believing that taxes are only owed once earnings surpass a specific threshold. Nate clarifies this misunderstanding:

“Every dollar you earn you have to report. Even if it was $4 and you might only owe a dollar in taxes, you still have to report that $4 on your tax return.”
— Nate, 08:29

Kate shares her own realization of initially believing the $600 mark was a reporting threshold, highlighting how widespread this myth is. Nate emphasizes the necessity of reporting all income, regardless of the amount, using the example of a savings account where even minimal interest must be declared.

Myth 2: You Only Need to Pay Taxes Once a Year

Creators transitioning from W2 jobs to entrepreneurship often overlook the importance of making quarterly tax payments. Nate explains the difference:

“As a business owner, as an entrepreneur, a creator, no one is withholding those taxes on your behalf. The IRS is going to charge you 8% interest on everything you owed us, plus penalties and fines on top of that.”
— Nate, 10:54

He warns that failing to make quarterly payments can lead to substantial penalties, even if creators are unaware of these additional charges. Kate relates this to her own experience, emphasizing the ease of missing these ongoing obligations compared to the automatic withholding in traditional employment.

Myth 3: You Can Avoid Taxes by Calling Your Business a Hobby

Another common myth is the belief that labeling a content creation venture as a hobby can exempt one from taxes. Nate counters this by outlining the IRS stance:

“If you do consider yourself a hobby, then you get zero deductions.”
— Nate, 15:58

He explains that while hobby income must still be reported, it offers no deductions, making it financially disadvantageous compared to operating as a legitimate business. Kate reinforces the importance of recognizing significant income streams as real businesses to take advantage of available tax deductions.

Myth 4: Content Creators Can Write Off Everything Related to Their Lifestyle

Creators often mistakenly believe that all expenses related to their personal lives and content can be deducted. Nate clarifies the boundaries:

“The IRS says, the expense needs to be an ordinary part of your business and a necessary part of your business.”
— Nate, 21:13

He stresses that only expenses directly tied to business activities are deductible. For instance, while clothing purchased specifically for a photoshoot may be deductible for fashion influencers with affiliate links, everyday personal attire does not qualify. This distinction is crucial to avoid audits and ensure compliance with tax regulations.

Myth 5: Travel Creators Can Deduct Entire Trips by Posting a Photo

Travel influencers might believe that simply posting a photo from a trip allows them to write off the entire expense. Nate provides a nuanced perspective:

“If you are audited and the IRS is like, how did that drive your business? It's gonna be hard. But if you have significant content built around it, like reviews and posts throughout the trip, then that is deductible.”
— Nate, 25:27

He advises that for travel expenses to be deductible, the trip must have a clear business purpose with substantial content creation involved. Merely taking a vacation and posting a single photo without a broader content strategy does not meet the necessary criteria for deductions.

Myth 6: Botox and Plastic Surgery Are Deductible for Front-Facing Creators

A particularly sensitive topic is whether cosmetic procedures like Botox or plastic surgery can be deducted as business expenses. Nate unequivocally addresses this myth:

“The government says you cannot write off plastic surgery, cosmetic surgery, those types of procedures. Botox is considered surgery since it, you know, even though it's not like true surgery, it's still considered because of that.”
— Nate, 31:40

Kate appreciates the clarity, acknowledging the temptation for creators to misalign personal cosmetic expenses with business deductions. Nate reinforces that such expenses must be borne personally, and attempting to deduct them can lead to legal repercussions and audits.

Conclusion: Prioritizing Proper Accounting for Business Success

Kate and Nate wrap up the episode by emphasizing that a solid financial foundation is essential for business success, even if it seems peripheral to platforms like Pinterest. They encourage creators to seek professional accounting advice to dispel myths and implement effective financial systems. Nate highlights the availability of free consultations through Cookie Finance, offering tailored guidance without the pressure of hard selling.

“Once I have let my accounting go to somebody that I trust, I don't think about it because I don't have to think about it.”
— Kate, 37:05

This partnership between accurate accounting and strategic business practices ensures that creators can focus on what they do best—creating content and engaging with their audience—while maintaining financial health and compliance.

Key Takeaways

• Report All Income: Regardless of amount, all earnings must be reported to avoid penalties.
• Quarterly Tax Payments: Consider making quarterly tax payments to prevent accruing interest and fines.
• Operate as a Business: Recognize your content creation as a legitimate business to take advantage of tax deductions.
• Understand Deductions: Only business-related, ordinary, and necessary expenses are deductible.
• Business Purpose for Travel: Ensure trips have a clear business intent with substantial content creation to qualify for deductions.
• Personal Expenses Are Personal: Cosmetic procedures and similar personal expenses are not deductible, even for front-facing creators.

For more insights on managing your business finances and to debunk additional accounting myths, consider scheduling a free consultation with Nate and his team at Cookie Finance here.