In short

Tax support for agencies covers the entity return, correct treatment of reimbursed client costs, Forms 1099 for freelancers and contractors, deductions for software, equipment and home offices for remote teams, and owner compensation for S corporation agencies. Agencies with remote staff in several states may also face state payroll and income tax registration questions.

Freelancer reporting

Agencies often pay many freelancers. Payments to qualifying contractors may require Form 1099-NEC; payments made by card or through some payment platforms are reported by the platform instead. We track payment method per freelancer so filings are correct.

Owner compensation

Agencies organized as S corporations need to pay shareholder-employees reasonable compensation. The IRS explains this on its page about S corporation employees, shareholders and corporate officers.

Equipment and software

Computers, cameras and software are deducted or depreciated under rules in Publication 946. Subscriptions are generally ordinary business expenses.

Remote teams and multiple states

Employees working remotely in other states can create payroll registration and sometimes income tax filing obligations in those states. We list where your team works so your preparer can review.

Home offices

Owners working from home may qualify for the home office deduction if they meet its requirements. See our guide on home office deduction basics.

Records we request

Contractor payment totals, software subscriptions and client rebill reports.

Agencies with remote staff in several states also give us payroll state summaries, because hiring in a new state can create filing obligations there. Client rebills of media spend are reviewed so pass-through amounts are reported consistently, and software subscriptions are categorized for the return.

Key terms

Definitions for terms used on this page:

Marketing & Creative Agencies problems this addresses

  • Client ad spend passes through the books and inflates revenue
  • Retainers are billed in advance for work done over the month
  • Freelancers and contractors are a large and variable cost
  • Project overruns are hard to see without time and cost tracking
  • Software subscriptions multiply quickly across clients and staff