Influencers make their living by filming, tagging, and posting the free trip, the skincare drop, the comped dinner at that boutique hotel. The likes rolled in, and so did the next brand deal. What doesn’t always come with that gifted package is the reminder that the IRS is watching . If you’re building a business off your content, the IRS considers those perks compensation, and it wants its cut.
When a Gift Is Actually Income
True gifts are rare in the influencer economy. A gift, legally, means no strings, no expectations, no benefit to the giver. Your grandmother sends you $500? A quality gift. Your friend gives you concert tickets for your birthday? Another nice gesture. However, when a brand ships you products and expects exposure, it’s not a gift; it’s a business transaction.
If you receive skincare, supplements, clothes, or gear, and the brand’s goal is marketing, you’re expected to report the fair market value of that product as income. That means if you got $300 in designer makeup in exchange for a tutorial, your gross income goes up by $300. If a travel company gives you a $2,000 vacation in return for a post, you’re taxed on that $2,000.
The IRS doesn’t require a signed contract or formal request for a tag. If a product arrives because of your audience and the implied understanding is visibility, it counts. That holds true even when the brand says “no need to post” in the message. If the intent was to get you talking, it’s compensation.
Prizes, Giveaways, and Bartered Deals
Any time you win something , on a game show, through a giveaway, or in a brand raffle, you need to report it. Prizes are taxed the same as cash. Whether it’s a $500 gift card, a Peloton bike, or a trip to Cabo, the IRS treats the prize as ordinary income. The brand or sponsor might issue a 1099-MISC, but even if they don’t, you’re still on the hook.
Bartering also counts. If you shoot a promo reel for a local gym and get a year-long membership in return, you don’t walk away tax-free. The IRS expects you to report the market value of that membership as income. If a restaurant comps your meal in exchange for a review video, you need to report the value of the dinner. Exposure as currency still gets taxed.
This applies even if no money changes hands. If you’re being compensated in product or service instead of dollars, it’s all taxable income according to the IRS.
Where to Report It and What to Track
If you operate as a sole proprietor or small business (and if you’re an influencer earning from content, you do), you should report this income on Schedule C. That includes gifted products, free services, perks, trips, and any prizes you win related to your work.
To stay audit-ready, track everything you receive. That includes DMs or emails from brands, the estimated value of the products, and how you used them. Screenshots matter. So do timestamps. Use the fair market value, or a standard retail price that a consumer would pay. If you received a comped hotel room that typically books for $350 a night, that’s what you report.
Use bookkeeping software or a spreadsheet to track what’s taxable. Save receipts, contracts, and any digital correspondence. The IRS doesn’t excuse tax gaps based on confusion. If you receive value for content, it counts as income.
Contact Robert V. Boeshaar, Attorney at Law
If you’ve received a notice from the IRS about unreported influencer income or want help sorting out your tax obligations as a creator, call Robert V. Boeshaar, Attorney at Law . We help clients address IRS issues with clarity, focus, and real solutions.
The post How the IRS Taxes Your Gifts, Prizes, and Perks (Especially if You’re an Influencer) appeared first on IRS Tax Attorney | Seattle Tax Lawyer for IRS Help.