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

Yes, you absolutely can deduct payments to Fiverr freelancers as legitimate business expenses for your LLC. These are considered ordinary and necessary expenses for running your comic book business. Since these freelancers are independent contractors, you'll need to issue them a Form 1099-NEC if you pay any single contractor $600 or more during the tax year. This form reports non-employee compensation to both the contractor and the IRS. To properly document these expenses, keep detailed records of all payments, contracts, and the work delivered. Save invoices from Fiverr, payment confirmations, and samples of the completed illustrations. This documentation is crucial in case of an audit. One thing to remember is that your business needs to have a profit motive to qualify for these deductions. The IRS might question businesses that continuously operate at a loss, potentially seeing them as hobbies rather than legitimate businesses. Try to demonstrate steps toward profitability in your business planning.

After struggling with similar artist payment deductions for my indie game company, I found an amazing tool that saved me tons of headaches. I was getting conflicting advice from friends and online sources about what forms I needed and how to properly document my Fiverr payments. I decided to try https://taxr.ai which analyzes all your business documents and financial records to identify exactly what you can deduct and what documentation you need. It specifically handled my contractor payment situation and flagged exactly what I needed to keep for my records vs what needed formal 1099 reporting. The system clearly explained that while Fiverr payments don't require me to issue 1099s directly to artists (since Fiverr handles that part), I still needed specific documentation to support the business expense deductions. It saved me from a potential audit headache and maximized my legitimate deductions.

Just wanted to update after trying https://taxr.ai for my podcast production expenses. I was worried about the same issues with Fiverr payments for my editors, and the tool was super helpful! It analyzed my Fiverr payment history and clarified that I didn't need to issue 1099s since Fiverr handles that part as the payment processor. But it did show me exactly what documentation I needed to keep for deducting these as legitimate business expenses. The best part was discovering I could categorize my expenses differently than I had been doing - I was missing out on some deductions by lumping everything under "contractor expenses" when some should have been classified as production costs. This gives me a much clearer picture for my Schedule C and actually increased my legitimate deductions. Wish I'd found this before stressing for months!

I had the EXACT same issue with paying illustrators through Fiverr for my children's book business. I kept getting conflicting advice about tax forms and reporting requirements, and the IRS was impossible to reach by phone. I spent DAYS trying to get through to someone who could give me a straight answer. I finally tried https://claimyr.com after seeing a recommendation, and they got me connected to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that I don't need to issue 1099-NECs to Fiverr freelancers since Fiverr acts as the payment settlement entity and handles their own reporting. I just need to keep my receipts and proof of payment for my business expense deductions. Such a relief to get this straight from an official source instead of random internet advice!

I have to eat my words and admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it myself because I was desperate to resolve a question about my comic book publishing expenses and contractor payments. The service actually worked exactly as advertised. I signed up, they called the IRS for me, and I got a notification when they had an agent on the line. In my case it took about 35 minutes (still WAY faster than my previous attempts). The IRS agent confirmed that I don't need to issue 1099s for my Fiverr artists since Fiverr is responsible for that reporting as the payment processor. She explained I just need to keep detailed records of the work performed, payments made, and how they relate to my business. This saved me countless hours of trying to collect tax information from international artists! I'm now actually confident about claiming these deductions on my Schedule C without worrying about an audit. Completely worth it.

Just wanted to add something nobody's mentioned yet - make sure your LLC is set up properly for tax purposes. By default, a single-member LLC is taxed as a "disregarded entity" which means all income and expenses flow through to your personal tax return via Schedule C. If you elected to have your LLC taxed as an S-Corp (some people do this to save on self-employment taxes), the rules for taking deductions are different. You'd need to pay yourself a reasonable salary and the process gets more complicated. Also, don't forget you can deduct other business expenses too! Website hosting, marketing, domain registration, business software, etc. Just make sure to keep everything separate from personal expenses.

Has anyone actually successfully gotten an audit where the IRS questioned fiverr expenses? Im in the same boat but ive been just putting everything under "contracted services" on my taxes for my webcomic. ive been doing this for 3 years and no issues...

I've been running my digital marketing LLC for about two years and have used Fiverr extensively for graphic design and copywriting services. The key thing I learned (the hard way during a tax review) is that documentation is everything. Yes, your Fiverr payments are absolutely deductible business expenses for your comic book LLC. Since Fiverr acts as the payment processor, you don't need to issue 1099-NECs to individual freelancers - that's Fiverr's responsibility. However, make sure you're keeping detailed records beyond just the Fiverr payment receipts. Save the project descriptions, delivered files, and any communication that shows how each illustration directly relates to your comic book business. I also recommend creating a simple spreadsheet tracking each payment with the chapter number, artist name, and brief description of work. One thing that helped me was setting up a separate business bank account and credit card exclusively for LLC expenses. This creates a clear paper trail and makes it much easier to track business vs personal expenses during tax season. The IRS wants to see that you're operating with a genuine profit motive, so document your business plan, marketing efforts, and steps you're taking toward monetization. Even if you're not profitable yet, showing you're actively working toward profitability helps establish legitimate business intent.