Are you making loads of money on Only Fans currently and are now worried about your tax implications? If you don’t know where to start for the money you made in OnlyFans and your tax bills are keeping you up at night, you came to the right video.
We will answer the 5 most in-demand questions we receive from Only-Fan content creators…let’s do it. We are here for you.
We been getting a good deal of DMs from Only-Fan content creators and we decided to create this video to be a sort of directory for the questions so that we can put you guys out there at ease if you guys happen to find great success on the OnlyFans platform!
#1- What tax forms should I worry about on OnlyFans as a content creator and what is a 1099 form and why did OnlyFans Sent me one?
So as an Only fan content creator I’m going to make a couple assumptions; One is you just started out and the two is you have not decided to incorporate such as forming an LLC, C Corp, or partnership. This makes your tax life very simple, you are what the IRS considered self-employed and what you will receive from Onlyfan is most likely a 1099 form, which will indicate your total earnings for the year.
But don’t panic if you don’t get one. They will only send you one if you earned more than $600 in earnings this year. If you have not reached this mark, most likely you won’t receive one and the IRS will not be expecting a tax return from you.
However if you did reach this figure, I would plan to fill out a tax return. The most important schedule to you, is what’s called a schedule C (Profit or loss from business). The schedule is where you would put on (show picture for many seconds of schedule C) all your earnings for this business along with any business deductions you have related to this business.
#2- What are some tax deductions that can really help reduce my taxes?
So for OnlyFan content creators I’m going to gather some of the top expenses that may pertain to you. This includes the following category.
- Transaction fees (the portion taken by OnlyFans)
- Clothing or Uniform or props or camera equipment used for your OnlyFan Content creation
- Self Employment tax deduction (The IRS treats the “employer” portion of the self-employment tax as a business expense and allows you to deduct it accordingly.
It is important to note that the self-employment tax refers to Social Security and Medicare taxes, similar to FICA paid by an employer. When a taxpayer takes a deduction of one-half of the self-employment tax, it is only a deduction for the calculation of that taxpayer’s income tax. It does not reduce the net earnings from self-employment or reduce the self-employment tax itself.5
Remember, you’re paying the first 7.65% whether you’re self-employed or work for someone else. And when you work for someone else, you’re indirectly paying the employer portion because that’s money your employer can’t afford to add to your salary.
- Home Office Deductions
- Internet and Phone Bill
- Health insurance premium – If you are self-employed, pay for your own health insurance premiums, and are not eligible to participate in a plan through your spouse’s employer, you can deduct all of your health, dental, and qualified long-term care (LTC) insurance premiums.
You can also deduct premiums that you paid to provide coverage for your spouse, your dependents, and your children who were younger than 27 at year-end, even if they aren’t dependents on your taxes. Calculate the deduction using the Self-Employed Health Insurance Deduction Worksheet in IRS publication 535.11
- Meals = A meal is a tax-deductible business expense when you are traveling for business, at a business conference, or entertaining a client. The meal cannot be lavish or extravagant under the circumstances, and in the past, you could only deduct 50% of the meal’s actual cost if you keep your receipts, or 50% of the standard meal allowance if you keep records of the time, place, and business purpose of your travel but not your actual meal receipts.
However, the deduction has been amended, according to the Consolidated Appropriations Act, 2021, H.R. 133, Temporary allowance of a full deduction for business meals. The bill temporarily allows a 100% business expense deduction for meals (rather than the current 50%) as long as the expense is for food or beverages provided by a restaurant. This provision is effective for expenses incurred after Dec. 31, 2020, and expires at the end of 2022.12
- Travel = Further, to be considered a business trip, you should have a specific business purpose planned before you leave home and you must actually engage in business activity—such as finding new customers, meeting with clients, or learning new skills directly related to your business—while you are on the road. Handing out business cards at a bar during your friend’s bachelor party won’t make your trip to Vegas tax-deductible.
Keep complete and accurate records and receipts for your business travel expenses and activities, as this deduction often draws scrutiny from the IRS.
Deductible travel expenses include the cost of transportation to and from your destination (such as plane fare), the cost of transportation at your destination (such as car rental, Uber fare, or subway tickets), lodging, and meals.
Feel free to watch our video on how you can squeeze some free travel also in your business travel
- Vehicle Use – When you use your car for business, your expenses for those drives are tax-deductible. Make sure to keep excellent records of the date, mileage, and purpose for each trip, and don’t try to claim personal car trips as business car trips.
You can calculate your deduction using either the standard mileage rate determined annually by the IRS or your actual expenses.
The standard mileage rates are 57.5 cents per mile in 2020 and 56 cents per mile in 2021.151613
#3- Do I need to make estimated quarterly tax payments as a OnlyFan creator?
This question really depends on how much you are making on your onlyfan account. If you are making less than 6 digits, then I think you can safely make payments on an annual basis. There could still be a penalty involved but it won’t be substantial. I say that because I realize people don’t like being bothered to figure out tax issues all year long haha, but yes technically it’s always good to think about tax as an all year event instead of just during April 15 or May 17th this year as what ppl considered tax time.
If you do make more than 6 figures a year I strongly encourage u to start making quarterly payments and the deadlines are April 15, June 15, September 15 and January 15 of the following year.
#4- Would it be smart for me to setup an LLC?
This is a great question. So in case you don’t know, an LLC provides protection for your business. It limits your personal liability that you have in case you do something that gets you sued or lawsuit so that they can’t come after your personal assets.
LLC is quite easy these days and there’s a lot of great services out there that can do it for you. Our recommended service is zenbusines (show logo) and we will provide a link in our description for you. This is recommended if you are treating your OnlyFans as a business and something you will continue to do for many years as and you see your activity and revenue level growing over the years.
#5- What are other things I need to worry about? Sales Tax? Business Licenses? Local and State taxes?? Penalties?
Ah yes a coverall question. So I will start answering this. So Sales Tax I would think does not pertain to most OnlyFans content creators. The only time this will trigger is if you happen to also have a merch store or a POD setup to go along with your OF setup so this would cross over the ecommerce and that’s the only time you would have to start worrying about sales tax. As far as acquiring a business license, yes that may be necessary depending on what state you are in. However it is another one of those factors that comes down to how much your earnings are. If you are earning a great deal vs you are just starting out how necessary it is.
Of course besides Federal Taxes, you should also know that your state and possible local jurisdiction may also want a piece of the pie of your earnings. If you are lucky enough to live in a state that has no state income tax such as Nevada tennessee and texas, then ur in luck and don’t have to add this to your tax to do list this year.
If you are an OF content creator making greater than 6 figures, I would recommend you seek professional help to help you not only just file your taxes, but also to help with your bookkeeping and consultation services. This will greatly increase the burden on you and if you hire someone that understands your business model they can also ensure you don’t overpay on your taxes and can make sure you maximize your savings and keep every penny you deserve!
Learn more about tax free wealth for yourself after you’ve worked so hard with our course: