Your Guide to OnlyFans Taxes: What You Must Pay and File

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Your Guide to OnlyFans Taxes: What You Must Pay and File

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Many online video content creators in the U.S. have turned to OnlyFans as a primary source of income. This platform allows creators to earn money directly from their bedrooms with minimal expenses. Whether OnlyFans serves as your side gig or your full-time job, understanding how to calculate your 1099 tax rate is crucial to determining how much you owe the IRS. In this blog, we will cover everything you need to know, from mandatory taxes to the filing process of how OnlyFans taxes work. Let us get started:

Introduction

As of 2023, OnlyFans boasts over 190 million registered users and 2.1 million creators who have collectively earned $12.5 billion. Ranked among the top 50 websites globally by daily visitors, OnlyFans has enabled some creators to earn over $10,000 a month, according to The New York Times. This financial success brings tax obligations and the need to avoid IRS penalties into sharp focus for many creators. Let us look at some key points of OnlyFans taxes work:

  • To claim OnlyFans-related expenses as business deductions, it should be your full-time business activity
  • You can deduct costs for props and video equipment from your taxable income
  • You should receive a 1099-NEC from OnlyFans if you earn income on the platform

Can I Pay Taxes On My OnlyFan Income?

Yes, must have to pay taxes on my OnlyFan income, including tips, subscriptions, and payments from individual subscribers, which must be reported to the IRS. Additionally, any earnings from brand sponsorships or endorsements, such as promoting a makeup company’s products, are taxable. The IRS considers OnlyFans creators to be self-employed, requiring them to pay income tax based on their tax bracket, as well as self-employment (SECA) taxes.

How Do Onlyfans Taxes Work?

As an OnlyFans creator, considered self-employed and must pay taxes on my OnlyFan income. OnlyFans will issue a 1099-NEC form if you earn over $400 annually, reporting your income to the IRS. You’ll receive this form by mail or can download it from your account dashboard.

You must pay 15.3% in self-employment taxes on your adjusted gross income (AGI). For instance, with an AGI of $20,000, you owe $3,060 in SECA taxes. Deductible business expenses can reduce your AGI, potentially lowering your tax bracket and decreasing your overall tax burden. Taking assistance from any expert CFO Accountant like AquiferCFO accountant can help track income and expenses accurately.

How Do Onlyfans Taxes Work?
How Do Onlyfans Taxes Work?

Your AGI is your income after deducting business expenses, student loan interest, and qualifying IRS tax credits. If OnlyFans is your primary income, you can deduct relevant business expenses. For example, if you earn $64,000 from OnlyFans and deduct $14,000 in expenses, your AGI becomes $50,000. These deductions can lower your tax bracket and reduce your overall tax rate.

What You Can Deduct as an OnlyFans Content Creator?

As a full-time OnlyFans creator, you can deduct various business expenses that support your work. For example, you can write off a portion of your phone bill based on the percentage used for business. If you use your phone 40% for work, deduct 40% of the bill. If you have a phone solely for work, deduct 100% of those expenses.

The IRS requires business expenses to be:

  • Ordinary: Common in your industry, like software subscriptions for content creation
  • Necessary: Essential for your business, like a camera for filming content

What Expenses You Can’t Deduct from OnlyFans Income?

You can deduct business-related expenses from your taxable income, such as fuel costs for traveling to a filming location. However, personal expenses are not deductible. For instance, meals are only deductible if shared with a business partner, client, or potential client. Solo meals are not eligible for deductions.

How Can I Pay Taxes on My OnlyFans Income?

How Can I Pay Taxes on My OnlyFans Income?
How Can I Pay Taxes on My OnlyFans Income?

Self-employed individuals, including OnlyFans creators, must calculate and pay my OnlyFans taxes if their total tax liability exceeds $1,000 for the year. To avoid IRS penalties, you should pay at least 90% of your estimated tax liability, or $250, by each quarterly deadline.

How Can I File Taxes for My OnlyFans Income?

As a full-time OnlyFans creator, how do pay my OnlyFans taxes? You’ll need to complete Schedule C on your 1040 Form to report profits and losses, as the IRS considers OnlyFans creators as sole proprietors. Utilize your 1099-NEC from OnlyFans to accurately determine your tax liability. If you’ve misplaced the form, retrieve it from your OnlyFans account. Next, either manually fill out Schedule C or consult any CFO accountant like AquiferCFO for expense tracking and tax reporting, which offers expert CPA advice. After calculating profit and loss, use excess income to determine income and self-employment taxes via Form Schedule SE.

Final Words

Taking care of your taxes as an OnlyFans creator is essential for financial health. Understanding your obligations, deductions, and filing procedures ensures compliance and minimizes tax burdens. Remember, seeking assistance from financial experts like AquiferCFO can streamline the process and optimize your tax strategy. Take charge of your finances and maximize your earnings on OnlyFans with informed tax planning. Contact AquiferCFO today for expert guidance and support.

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