How the HITS Act Creates a $150,000 Opportunity for Podcasters and Businesses

The HITS Act (Help Independent Tracks Succeed Act) is a U.S. tax law passed in July 2025 that lets podcasters, creators, and small businesses deduct up to $150,000 per year in sound recording expenses. This levels the playing field with big media companies and helps small creators reinvest in better equipment, studios, and guests to grow faster.

I. What the HITS Act Covers

👉 What does the HITS Act Cover?
The HITS Act covers sound recording expenses only — including studio rentals, sound equipment, acoustic treatment, audio editing, and guest-related costs. Video-only production, lighting, marketing, and paid ads are not covered but can still be deducted separately under advertising.

• ✅ HITS Act Eligible: studio rentals, sound equipment, audio editing, guest stipends, acoustic treatment
• ❌ Not Covered: video-only editing, lighting, marketing, ads (still deductible separately)

II. Why the HITS Act Matters

• For creators: lowers barriers, supports reinvestment into quality and growth
• For small businesses: transforms podcasting into a tax-smart marketing channel
• For studios: opportunity to differentiate by itemizing audio vs. video vs. marketing

III. How Each Audience Should Leverage It

• Creators: upgrade equipment, hire editors, book guests
• Businesses: sponsor their own shows, reinvest savings into ads/distribution
• Studios: restructure billing, partner with CPAs, guide clients through deductions

IV. The Bigger Impact

• Validates podcasting as a serious business investment
• Opens the door for small businesses to compete with big media
• Fuels growth in the creator economy by making professional podcasting more accessible

V. Call to Action

Studios: Position yourself as both a creative and financial partner

Creators: Stop DIY-ing — leverage deductible professional services

Businesses: Treat podcasting as a growth + tax strategy

I. Introduction: What is the HITS Act?

The HITS Act (Help Independent Tracks Succeed Act) represents one of the most important shifts in how content creation is recognized and supported by U.S. tax law. Signed into law in July 2025, this legislation gives podcasters, independent creators, and small businesses access to the kinds of tax advantages that, until now, were reserved almost exclusively for large-scale media and recording companies.

At its core, the Act allows individuals and businesses to deduct up to $150,000 per year in qualifying sound recording expenses. This includes the foundational costs of creating professional-grade audio — from studio rentals and recording equipment to engineering, editing, and even guest stipends related to the recording process.

Why is this significant? Because for years, podcasting and small-scale recording expenses were buried under “advertising costs” in the eyes of the IRS. That meant deductions were capped, unclear, or inconsistently applied, leaving independent creators and small businesses at a disadvantage compared to big studios with teams of accountants and lobbying power. The HITS Act changes that equation.

By establishing sound recording as its own deductible category, the law effectively levels the playing field. Small businesses can now produce content with the same financial advantages once reserved for major broadcasters. Independent podcasters can take their shows more seriously, knowing their investment isn’t just an expense but a tax-smart strategy. And podcast studios can use this law to add value for clients by clearly separating what qualifies under the Act versus what falls under general advertising deductions.

The implications go beyond tax savings. The HITS Act validates podcasting and small-scale audio creation as both creative outlets and legitimate business strategies. It gives entrepreneurs, creators, and studios the ability to reinvest tax savings into growth — whether that means running ad campaigns, producing short-form clips, or booking higher-profile guests.

In short, the HITS Act isn’t just about deductions. It’s about opportunity. It’s about giving small businesses and creators the financial breathing room to compete with larger players in today’s crowded content landscape.

II. What the HITS Act Covers (and What It Doesn’t)

One of the most important things to understand about the HITS Act (Help Independent Tracks Succeed Act) is that it is laser-focused on sound recording expenses. This distinction matters, because many creators, small business owners, and even studios naturally bundle audio, video, and marketing costs together when they think about podcasting or content production.

The HITS Act forces us to separate those categories — which is good news, because it provides clarity and allows for significant deductions in areas that were previously lumped under the vague umbrella of “advertising.”

✅ Eligible Expenses Under the HITS Act

The following categories qualify for the up to $150,000 annual deduction under the Act:

1. Podcast Studio Rentals
   • Renting professional recording space counts as a deductible expense.
   • This includes hourly, daily, or subscription-based access to podcast studios.
   • If you operate your own business podcast but choose to record in a rented studio, those costs are eligible.
2. Audio Recording Equipment
   • Microphones, mixers, recorders, and audio interfaces all fall under qualifying expenses.
   • Whether purchased outright or leased, professional-grade equipment is considered essential for sound recording.
3. Acoustic Paneling and Sound Treatment
   • Soundproofing and acoustic optimization are necessary for quality recording.
   • The Act includes items such as wall paneling, bass traps, foam, and other sound treatment materials.
   • This applies to both studios and individual creators setting up professional-grade environments.
4. Audio Engineering and Editing Services
   • Professional editing that includes audio qualifies under the Act.
   • This covers everything from sound mixing, mastering, and noise reduction to leveling tracks.
   • Importantly, this does not include video-only editing — the focus is on sound.
5. Guest Stipends and Travel Related to Recording
   • Paying for a guest’s travel or offering a stipend to appear on your podcast qualifies as a sound recording expense.
   • This opens doors for creators and businesses to attract higher-profile guests and expand reach, all while deducting the costs.

❌ Expenses Not Covered by the HITS Act

It’s equally important to understand what does not qualify. These items may still be deductible under traditional advertising or business expenses, but they are not part of the $150,000 cap provided by the HITS Act:

1. Video-Only Production
   • Lighting equipment, color grading, and video editing that doesn’t include audio are not covered.
   • While critical for video podcasts, these costs must be separated out from sound-related expenses.
2. Marketing, Promotion, and Social Media Distribution
   • Running social ads, paying for content distribution, or hiring agencies to promote your podcast does not qualify under the Act.
   • These fall under normal advertising deductions.
3. Paid Ads and Sponsorship Campaigns
   • Facebook, Instagram, LinkedIn, or YouTube ad spend is not eligible under the HITS Act.
   • Similarly, sponsorship arrangements where you pay to appear on another show or platform do not qualify as sound recording costs.

⚖️ The Key Distinction

The HITS Act only applies to sound recording expenses.

That means:

• If it directly relates to capturing, editing, or enhancing audio, it’s covered.
• If it relates strictly to video production, marketing, or promotion, it’s not covered under the HITS Act — though you can still deduct it separately as advertising.

This separation is not a limitation. It’s actually a benefit, because it allows creators, businesses, and studios to maximize both categories of deductions when structured correctly.

💡 Practical Example

A business spends $3,500 per month on podcast production with a studio. If the invoice is broken down like this:

• $1,500 for audio services (recording, editing, engineering) → covered under the HITS Act
• $1,000 for video post-production → deductible under advertising
• $1,000 for marketing & distribution → deductible under advertising

At year’s end, the business can claim $18,000 in HITS Act deductions plus $24,000 in advertising deductions — maximizing both opportunities without overlap.

III. Why the HITS Act Matters (and Who it Matters to)

The HITS Act isn’t just a new tax rule — it’s a shift in how creators, businesses, and studios can think about podcasting. For each audience, the opportunities look a little different.

A. Podcast Shows & Independent Creators

For individual podcasters and creators, the biggest roadblock has always been cost. Starting a podcast often means buying microphones, software, acoustic treatment, and paying for editing or studio time. Many creators cut corners by trying to do everything themselves, which can lead to poor sound quality and burnout.

The HITS Act removes much of that burden. By allowing creators to deduct up to $150,000 a year in sound recording expenses, it gives them freedom to:

• Invest in better sound quality. Instead of struggling with a cheap mic in a noisy room, creators can confidently rent studio time or upgrade to professional-grade equipment.
• Book better guests. Travel stipends and guest fees are deductible, which means creators can finally say yes to bringing in industry leaders or influencers.
• Pay for professional editing. Rather than spending hours struggling with editing software, creators can hire experts who make their content sound polished and professional.

The result? Creators get to focus on building authority and growing their audience — without the constant stress of figuring out how to afford production or cutting corners that hurt their brand.

B. Small to Mid-Sized Businesses Considering Podcasting

For small and mid-sized businesses, podcasting has often felt like a luxury — something reserved for big brands with big budgets. The HITS Act changes that by turning podcasting into a tax-smart marketing channel.

Here’s how:

• Sponsor your own podcast. A business can sponsor its own show, deduct the audio-related costs, and use the podcast as a platform to share expertise, highlight customer stories, and build trust with an audience.
• Reinvest in distribution. With the savings, businesses can push their content further — into newsletters, paid ads, or repurposed short-form clips for LinkedIn, Instagram, or YouTube.
• Move from “branding” to growth. Instead of treating podcasting as a soft branding exercise, businesses can make it a measurable growth strategy, supported by both marketing and tax incentives.

This opens the door for businesses that may have been hesitant before. What once seemed like a risky investment now becomes a smart financial decision, with real tax advantages to back it up.

C. Podcast Studios

Podcast studios are uniquely positioned to benefit from the HITS Act, not just for themselves but for their clients. The law creates an opportunity for studios to add value in ways beyond content creation.

• Differentiate with itemized invoices. By breaking down costs into audio (HITS-eligible), video (traditional deduction), and marketing (advertising deduction), studios make life easier for their clients’ accountants and bookkeepers. This builds trust and strengthens long-term relationships.
• Partner with financial professionals. Studios that collaborate with CPAs and bookkeepers can offer clients a clear roadmap for maximizing deductions, positioning themselves as both creative and financial allies.
• Attract new clients. Many small businesses who once saw podcasting as too expensive may now view it as financially viable because of the HITS Act. Studios that educate their market on these benefits will be the ones to win that new business.

By stepping into this advisory role, podcast studios can move from being seen as a “service provider” to being recognized as a strategic partner who helps businesses grow while also saving money.

The Big Picture

For creators, the HITS Act removes financial barriers. For businesses, it transforms podcasting into a tax-advantaged growth channel. And for studios, it creates a competitive edge that goes beyond microphones and cameras.

The law proves one simple truth: podcasting is no longer just a passion project — it’s a smart business strategy with measurable financial benefits.

IV. Practical Ways to Leverage the HITS Act

The HITS Act is more than just a tax break — it’s a tool you can use to grow faster and smarter. Whether you’re a creator, a business, or a studio, here’s how to put it to work.

For Creators

If you run your own podcast, the HITS Act helps you cover the real costs that often hold people back.

• Deduct professional editing. Instead of editing all night on your own, you can hire a pro and write it off. This saves you time and makes your show sound polished.
• Upgrade your gear. Microphones, mixers, and soundproofing panels all count. Better gear means better sound, and better sound means more listeners take you seriously.
• Rent studios when needed. Don’t want to record at home? Studio rentals are covered. You can walk into a pro setup and know it’s a smart tax move.
• Book better guests. Want a great guest to fly in for your show? Travel stipends and small payments are deductible. This makes it easier to say yes to big names.

For Businesses

Small and mid-sized businesses can now use podcasting as a real marketing tool, not just a side project.

• Start your own branded podcast. Share expert advice, highlight customer stories, or interview industry leaders. Every sound-related cost can be deducted.
• Separate audio and marketing. The audio costs are deductible under the HITS Act, while promotion and ads can still be deducted as advertising. This makes podcasting one of the smartest tax-friendly marketing tools out there.
• Reinvest tax savings. Use the money you save to pay for ads, short-form video clips, or distribution. This helps you reach more people without adding new expenses to your budget.

For Studios

Studios can use the HITS Act as both a growth tool and a way to stand out from the competition.

• Redesign pricing models. Break down invoices into audio, video, and marketing so clients can see exactly what qualifies under the HITS Act.
• Educate clients. Offer clear guidance on how the HITS Act works. By teaching clients, you become more than a studio — you become a trusted partner.
• Partner with CPAs and tax pros. Team up with financial experts to create bundled support for clients. Studios that connect creativity with smart money advice will attract more business.

The Takeaway

The HITS Act helps creators remove cost barriers, allows businesses to treat podcasting as a tax-smart growth channel, and gives studios a chance to add value that goes beyond recording. When used well, it doesn’t just save money — it fuels growth.

V. The Bigger Impact on the Creative Space

The HITS Act does more than just save money on taxes. It changes how people view podcasting and what it means for the creative economy.

Podcasting Becomes a Serious Business Tool

For years, some people saw podcasting as a hobby. The HITS Act flips that idea. By allowing big tax deductions, the government is saying: podcasting is real work and a real business investment. This gives creators and small business owners more confidence to put time and money into their shows.

Small Businesses Can Compete

Before, only large brands had the money to produce high-quality content. Now, smaller businesses can use the same tools — professional sound, polished editing, and even studio rentals — and write off the costs. This creates a level playing field where a local company can share their voice right alongside major corporations.

More Collaboration Opportunities

Because the HITS Act makes podcasting more affordable, it also makes it easier to team up. Creators can partner with businesses for sponsorships or branded podcasts. Studios can serve both groups by offering production and guidance. These partnerships help everyone grow faster while reaching bigger audiences.

A Stronger Creator Economy

When more people can afford high-quality production, the whole creative space grows. Independent voices get heard, niche communities get served, and new careers are built around podcasting. This makes the creator economy stronger, more diverse, and more sustainable.

The Takeaway

The HITS Act is not just a tax benefit. It’s a signal that podcasting has moved into the mainstream of business strategy. It opens the door for creators, businesses, and studios to collaborate, compete, and thrive in ways that weren’t possible before.

VI. What to do Right Now to Take Advantage of the HITS Act

The HITS Act is more than just another piece of tax law — it’s an open door. But to see the benefits, you need to take action now. Here’s what that looks like for each audience:

For Creators

If you’ve been recording in your bedroom with low-cost gear, this is your chance to step up. Stop shouldering all the work yourself. Editing, engineering, and even renting a professional studio can now be deducted under the HITS Act. That means you can focus on creating great content while knowing the costs are working in your favor at tax time.

For Small to Mid-Sized Businesses

Podcasting is no longer just a branding tool or a “nice-to-have.” With the HITS Act, podcasting becomes a tax-smart growth strategy. Launch your own branded show or sponsor one that aligns with your audience. Deduct the sound recording expenses directly, while still writing off marketing costs separately under traditional advertising. This double advantage creates both reach and financial savings.

For Studios

Studios have a chance to do more than provide creative services. By itemizing invoices into clear categories — audio, video, and marketing — you help clients maximize their deductions. Partner with CPAs and bookkeepers to make your studio not just a creative ally, but a financial one too. This positions your business as essential in a way that competitors may overlook.

The Final Word

The HITS Act isn’t just about saving money — it’s about strategy. Whether you’re an independent creator, a growing business, or a studio serving clients, the smartest move is to treat podcasting as both a marketing channel and a tax-advantaged investment. Those who adapt quickly will not only see tax benefits, but also set themselves apart in a fast-changing creative economy. If you’ve been thinking about starting a podcast but are unsure what to focus on or how to get started, we highly encourage you to take the San Antonio Podcasting Podcast Potential Assessment. It will provide you customized, actionable steps that more than double the chances of success in your podcasting journey.

If you’re unfamiliar with San Antonio Podcasting, it is the go-to online consortium of local San Antonio and Central Texas-based podcast studios, podcast shows, hosts, and frequent industry expert guests.