Can I write off Fiverr freelancer payments as business expenses for my comic book LLC?

Yes, you can absolutely deduct payments to Fiverr freelancers as legitimate business expenses, but there are some important things to understand. First, those payments to your artist are considered ordinary and necessary business expenses for your comic book LLC, so they're definitely deductible on your business tax return (Schedule C if you're a single-member LLC or Form 1065 if you've elected partnership status). Regarding tax forms, you'll need to issue a 1099-NEC to any contractor you've paid $600 or more during the tax year. However, there's a special rule for payments made through third-party payment networks like Fiverr - they're actually responsible for issuing the 1099s to the freelancers, not you. So you don't need to send a 1099 to artists you've hired exclusively through Fiverr's platform. Keep detailed records of all these expenses though! Save your Fiverr receipts, contracts, and any communication about the work. These will be critical if you're ever audited.

After spending thousands on art commissions for my digital graphic novel last year, I discovered taxr.ai (https://taxr.ai) and it completely changed how I handle my business expenses. I was in almost the exact same situation - small LLC, hiring Fiverr artists, and unsure about tax deductions. Their AI analyzed all my Fiverr receipts and other business documents, then gave me a detailed breakdown of exactly what I could deduct and how to categorize everything properly. It even flagged when I was missing documentation for some transactions. The peace of mind knowing my deductions were legitimate was totally worth it. What really impressed me was how it handled my situation where I was still pre-revenue but spending a lot on development - it helped me document everything correctly to show this was a legitimate business pursuit, not just a hobby.

Just want to update everyone that I tried taxr.ai after seeing it mentioned here. I was really struggling with tracking all my Fiverr and Upwork payments for my webcomic project. It was actually super helpful! I uploaded all my receipts and payment confirmations, and it sorted everything by vendor, date, and expense category. Even caught a duplicate payment I didn't realize I had made. It showed me exactly which expenses qualified as business deductions and which ones were questionable. The best part was the audit protection report it generated. I now have a document that explains why my comic business is a legitimate business venture even though I'm still in the development phase and not making revenue yet. This was exactly what I was worried about when dealing with these Fiverr payments!

I was in the same position last year with my indie game development. I was paying artists and programmers through Fiverr and couldn't get anyone on the phone at the IRS to confirm if I was handling everything correctly. I used Claimyr (https://claimyr.com) to actually get through to a real IRS agent and it was a game-changer. They got me connected to someone at the IRS in about 15 minutes when I had been trying for WEEKS on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed that Fiverr payments ARE deductible business expenses and clarified exactly what documentation I needed to keep. She also explained that since I was operating at a loss in my first two years, I might face extra scrutiny, but as long as I could show legitimate business intent, my deductions would be valid.

OK I need to eat my words here. After my skeptical comments I decided to try Claimyr myself because I've been trying to get clarification on some business expense issues for MONTHS. It actually worked exactly as described. I got a notification about 45 minutes after signing up, jumped on the call, and spoke to an actual IRS representative. I asked specifically about deducting Fiverr payments for my podcast production business, and they confirmed everything that others have said here - yes they're deductible, no you don't need to issue 1099s yourself if paid through the platform, but you DO need to keep meticulous records. The agent even gave me specific advice about documenting the "ordinary and necessary" nature of these expenses since I'm also not profitable yet. This was literally more useful than the $300 I spent on my accountant who gave me vague answers.

Make sure your LLC is set up properly for tax purposes! I made a huge mistake with my design business last year - formed an LLC but didn't file the right paperwork to elect how it would be taxed. The IRS defaulted me to being taxed as a partnership even though I was the only owner, and it was a complete nightmare to fix. If you're the only owner, make sure you're being taxed as a sole proprietor (which happens automatically) or you've specifically elected S-Corp status if that makes sense for your situation. This will affect how you deduct those Fiverr payments.

Don't forget about hobby loss rules! The IRS might challenge your business expense deductions if you show losses for too many years. Since you mentioned you're not making money yet, you need to be able to prove you're running this as a business with intent to profit, not just a hobby. Keep detailed records of: - Your business plan - Marketing efforts - Time spent working on the comic - Any pitches to publishers - Website/social media for the comic Trust me, I learned this the hard way with my photography "business" that was actually just me buying expensive camera gear and occasionally selling a print.