Parents of young content creators can potentially deduct camera expenses if the child’s gigs qualify as a business under IRS rules, reducing taxable income through depreciation or Section 179. Equipment must be ordinary and necessary, with proper documentation to avoid hobby classification. This applies to self-employment income reported on Schedule C, but kiddie tax may influence overall family tax strategy.
Unlocking Tax Savings: Deducting Equipment for Your Child’s Online Ventures
In the evolving world of digital content creation, many families are turning to platforms like YouTube, TikTok, and Instagram as income sources for their children. Whether it’s unboxing videos, tutorials, or family vlogs, a high-quality camera is often the cornerstone of these gigs. For parents footing the bill, the question arises: can these costs be deducted on your tax return? The answer hinges on IRS guidelines for business expenses, which treat content creation as self-employment if pursued with a profit motive.
The IRS defines business expenses as those that are “ordinary and necessary” for your trade or business. For content creators, cameras, lenses, tripods, and lighting qualify as essential tools, similar to how photographers or videographers deduct gear. According to IRS Publication 535, sole proprietors—including minors operating as self-employed—can deduct the full cost of qualifying equipment in one year via Section 179 deduction, up to $1,160,000 for the 2023 tax year, with inflation adjustments likely pushing this higher in 2025. Alternatively, depreciation spreads the cost over the asset’s useful life, typically five years for electronics like cameras, allowing annual deductions based on the Modified Accelerated Cost Recovery System (MACRS).
When the content creator is a child, the dynamics shift. If the child earns income from sponsorships, ads, or affiliate links—reported via Form 1099-NEC or 1099-K—parents can claim the child as a dependent and include the business on the family return using Schedule C (Form 1040). This offsets the child’s gross income against expenses like camera purchases. For instance, if a 12-year-old earns $5,000 from brand deals but spends $2,000 on a camera setup, the net profit drops to $3,000, lowering the family’s overall tax liability. Real-time data from TurboTax indicates that content creators deducted over $10 billion in equipment costs in recent years, with cameras leading the category for visual media gigs.
However, the IRS scrutinizes these deductions to distinguish business from hobby. Under the nine-factor test in IRS Topic No. 419, factors like profit intent (e.g., consistent posting and revenue tracking), expertise development (e.g., editing courses), and time investment matter. If the activity shows losses in three of five years, deductions may be limited to income only, treating it as a hobby. For parents, this means maintaining meticulous records: receipts, mileage logs for shoots, and a business-use percentage if the camera doubles for family photos (e.g., 70% business use allows deducting 70% of the cost).
State laws add layers, especially for child labor. California’s Coogan Law requires 15% of a minor’s earnings from entertainment (including influencer work) to go into a blocked trust, but parents can still deduct related expenses against the reported income. In 2025, with the standard deduction rising to $15,000 for singles (up $400 from 2024 per IRS inflation adjustments), families with modest child earnings may owe little after deductions. Yet, self-employment tax (15.3% on net earnings) applies if income exceeds $400, covering Social Security and Medicare.
To maximize benefits, consider the home office deduction if filming occurs in a dedicated space—up to $5 per square foot, capped at 300 square feet ($1,500 max under simplified rules). Software like Adobe Premiere for editing or props for content also qualify. Recent IRS guidance emphasizes digital economy compliance, with platforms like YouTube issuing 1099s for earnings over $600 starting in 2023, ensuring transparency.
Parents should track everything via apps like QuickBooks Self-Employed or Expensify, as audits can request proof up to seven years back if underreporting is suspected. Consulting a tax professional familiar with gig economy rules is crucial, especially for interstate shoots or international sponsorships that may trigger additional reporting.
Disclaimer: This article provides general tax tips based on IRS guidelines and reports from sources like TurboTax and Keeper Tax. It is not personalized tax advice; consult a qualified professional for your situation.
