From W-2 to Self-Employed: What Creators & Small Business Owners Need to Know

CPA for YouTubers, Creators, Online Sellers & Medical Professionals in Los Angeles

Becoming your own boss is exciting — but if you’re a YouTuber, TikToker, Filmmaker, Actor, Shopify store owner, Amazon seller, or even a Dentist leaving a traditional W-2 job, you’re about to step into a whole new tax world.

At Velin & Associates, Inc, we help self-employed creators, online commerce businesses, and medical professionals avoid costly surprises when they move from employee to entrepreneur.

How Taxes Change When You Leave a W-2 Job

When you’re an employee, taxes are fairly straightforward:

• Your employer withholds income tax, Social Security, and Medicare from each paycheck.
• You get a W-2 at the end of the year.
• You may get a refund if you overpaid.

When you’re self-employed:

• You pay BOTH the employee and employer share of Social Security & Medicare — this is called self-employment tax (about 15.3%).
• No one withholds taxes for you — you must make quarterly estimated payments.
• You can claim more deductions, but you must track them carefully.

Examples: 

1. What would you do if you’re a TikToker who quits your marketing job (W-2) and makes $75,000 in brand deals?

👉 If you don’t plan for self-employment tax and quarterly payments, you could owe thousands — plus penalties for underpayment.

2. What would you do if you’re a dentist leaving a clinic job to open your own office?

👉 As a W-2 employee, payroll handled your tax withholdings. Now, you’re responsible for tracking income, expenses, payroll for your staff, and your own estimated taxes. Miss this, and you could face an unexpected IRS bill.

3. What would you do if you switch from a W-2 retail manager to selling products online through Shopify?

👉 You now need to pay self-employment taxes, track inventory, and possibly collect sales tax. A Shopify Store CPA can help you keep it straight — so you don’t get hit with penalties or double-report income.

🔍 Key Transition Mistakes That Cost Creators & Small Business Owners

Many new self-employed people — especially creators, online sellers, and medical professionals — repeat the same costly mistakes:

1️⃣ Not Saving for Taxes

Example:
A YouTuber goes full-time, earns $120,000, but spends the cash flow on equipment and travel. They forget about taxes and owe $20,000+ in April — with no savings to cover it.

2️⃣ Missing Quarterly Payments

If you don’t pay taxes quarterly, you’ll likely owe penalties and interest. The IRS wants its share as you earn — not just at year-end.

3️⃣ Mixing Personal & Business Money

Creators and online store owners often use the same accounts for groceries and business ads. This makes it harder to prove expenses if audited — and you may lose legitimate deductions.

4️⃣ Not Tracking Deductions Properly

Example:
A filmmaker buys gear, software, and flights to shoots — but doesn’t keep receipts. When tax season comes, they can’t prove expenses and pay taxes on money they didn’t actually keep.

5️⃣ Forgetting Self-Employed Retirement & Health Deductions

Many new business owners don’t realize they can open SEP IRAs, Solo 401(k)s, or deduct self-paid health insurance — huge tax savers!

How to Do It Right

• Keep separate business and personal bank accounts
• Save 25–30% of your income for taxes
• Track expenses with an app or cloud bookkeeping
• Pay quarterly taxes on time
• Work with a CPA who understands your industry: CPA for YouTubers, CPA for Shopify Store, CPA for Filmmakers, CPA for Amazon Business, or Dentist CPA

🎯 Start Smart — Avoid Expensive Mistakes

Transitioning from W-2 to self-employed is a big step — but you don’t have to navigate it alone.

At Velin & Associates, Inc, we help YouTubers, TikTokers, online store owners, filmmakers, Amazon sellers, doctors, and dentists across Los Angeles pay less in taxes — legally.

For more information about our services, please visit our website.

Velin & Associates, Inc

8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org