You’ve finally started making money podcasting! Now you must decide how to handle that income. Here are ten tips for what to do with podcast profits.
1. Document it
When you receive any kind of money, you need a record of the details. This will be important for tracking your income and expenses, filing taxes, and budgeting.
Approach your documentation with “who, what, when, where, how, and why.”
- Who gave the money—What affiliate, sponsor, or ad generated the income? Who donated?
- What podcast generated the income—If you have multiple shows, it’s important to track the performance of each one. Have different forms, check boxes, or email accounts to help. Also use affiliate tracker options to separate show incomes.
- When you received it
- Where it went and how it was paid—Did it come through PayPal, cash, check, or something else? Did you spend it on something?
- How much you received
- Why it was given—Was it donated for a specific reason? Was it income from a specific ad?
2. Include it in your taxes
Check with a tax professional! I am not a tax professional. But I do know that all income is subject to income tax in the United States of America. Generally, this will go under line 21 of Form 1040 for most USA taxpayers. This may be different if your podcast is or is part of a business.
3. Cover your regular expenses
The best use of podcast profit is to pay for your habit. Unless you’re trying to podcast for free, you probably have some fairly regular expenses.
- Web hosting
- Media hosting
4. Share with your cohosts
If you have cohosts, I highly recommend that you decide how income will be handled before you have any. There are a few basic ways you can share this with your cohosts for compensation before or after expenses.
- Percentage split—Do you split it equally, or does someone get more than someone else?
- Flat rate compensation—Will each person be paid a specific amount?
- Attendance earnings—Will you pay cohosts for episodes they couldn’t attend?
Remind your cohosts to also include the income on their taxes. If you pay them more than $600 in a year (as of 2013), you must provide them with a Form 1099.
5. Upgrade your equipment
It seems we always have our eyes on better podcasting gear! Don’t buy stuff just because you have the money, but plan carefully.
Generally, your purchases should help you achieve one of the following results
- Better quality
- New abilities
- Easier workflow
6. Buy helpful software
Podcasters are quick to consider hardware upgrades, and I agree that those are more important. Sometimes, you software may be just as important to upgrade or purchase.
- Editor—Would switching audio or video editors make your editing workflow faster?
- Helper apps—Consider an ID3 editor, media converter, asset manager, show notes app, and more.
7. Add new podcast “features”
What new “features” can you give your podcast if you could spend a little money?
- Better theme—look at the StudioPress themes for WordPress
- Premium Plugins—I love premium plugins because of how much easier they make my website. Consider plugins like Pretty Link Pro, Gravity Forms, SearchWP, Easy Azon, Social Subscribe & Follow Icons, and more.
- Licensed music—a better theme song, like from JewelBeat, Music Bakery, or PremiumBeat.com
- Stock photos—iStock, Fotolia, and more
- Premium services—Consulting, show notes help, editing, faster hosting, and more.
8. Get more resources
Sometimes, the money can help you produce better content for your show.
- Training materials—Books, videos, or other resources that help you think or do something better.
- Conferences—Network with others in your field, get inspired, and find new partners. I think conferences are totally worth it! (Go to the ultimate podcasting conference by podcasters and for podcasters!)
- Content inspiration—Here’s your opportunity to buy more stuff to review! It could be movies, TV show downloads from iTunes (so you can stop illegally downloading them—we’ve probably all done it before), books, magazines, music, games, and more.
9. Host giveaways
Consider giving back to your community. Give gifts to those who have volunteered their time to help you . You could also host a fun contest or giveaway for your community. Just check the applicable laws for giveaways.
10. Enjoy it
There’s nothing wrong with simply enjoying the money, no matter how you received it. Buy yourself some ice cream, pick up a new video game, go see a movie, or put it in your bank account.
You may be allowed to deduct these expenses
If you run your podcast part of or as a business, check with a tax professional to see how you may be able to deduct your expenses from your taxes. Stuff like equipment, subscriptions, training, travel, conferences, and software are easy to deduct; but content inspiration (books, movies, etc.) may be harder to justify.
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- Watch for our new podcast about ABC’s TV show Resurrection.
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- ONCE: Once Upon a Time podcast
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