OnlyFans Taxes Explained – What & How to Pay
OnlyFans is based in London, and it was founded in 2016. It’s a particular platform that many artists and content creators are using to generate money from their content and build a relationship with their followers or fans. Because of that, all residents in the United States who are earning money from this platform will be required to pay their legal OnlyFans Taxes. So if you’re one of them, this article is for you. Here’s everything you need to know about how to file your taxes and even lessen the total taxes you owe from what you’re earning on OnlyFans.
Do you need to pay tax on your OnlyFans Income?
Residents in the United States should pay their taxes from the money they earn in OnlyFans. Any money they received from tips and donations, subscriptions, Pay Per Views, and many other income-generating ways offered on the platform will all be added to see the aggregate taxes you owe. But you can also have some deductibles for the expenses you’ve paid for in running your OnlyFans account.
How does federal tax work on OnlyFans creators?
The Internal Revenue Service has provided a set of qualifications to see if your influencing on OnlyFans is a hobby or a career. So if you’re seriously working on your OnlyFans account to make it more profitable and earn more money, it means that you’re treating it as a business. The same thing can be said when you keep track of your expenses and income on this platform. Then you’re treating it as a business instead of being a hobby.
It’s important to determine the way you use your OnlyFans account if it’s a hobby or as a career because that will be your basis on what taxes you need to pay. So if it’s a hobby, please note that the IRS has suspended the ability of the taxpayers to list down the items for their hobby-related activities since 2018. It means that if you’re treating your OnlyFans account as a hobby, you will no longer take advantage of tax deductions. So you only have to settle your income taxes, and there will be no self-employment taxes anymore.
Moreover, all of the income you’re earning from your OnlyFans account will be taxable, and if you’re treating it as a career, it means that you’ll have the responsibility to pay your income taxes and even your self-employment taxes at the same time. Also, keep in mind that as a business, you will be required to pay your Social Security and Medicare taxes as mandated by the U.S. government. But whatever self-employment taxes you owe, it’ll now be based on your net earnings.
In addition, you also have to add up all of the expenses you’ve paid for running your OnlyFans account and deduct it from the net income you’ve earned. These deductions will be based on the IRS’s requirements to make the services and purchases eligible for the list of tax deductibles.
As a content creator on the OnlyFans platform, you are also required to settle your income and employment taxes on a quarterly basis. It’ll be due on the 15th of April, 15th of June, 15th of September, and 15th of January. The Internal Revenue Service will charge you for fees and interests if you don’t settle your owed taxes on the given due date.
It may depend on the local laws, but all of the expenses you’ve paid for running your OnlyFans account can be tax-deductible. That’s why you always have to keep all of the receipts and proofs for all of the expenses and include them when filing your returns. For instance, if you have internet service and 40% of its usage is for running your OnlyFans account, then you can deduct 40% of your monthly internet bill as a business expense.
So it’s personal use versus business use. The same thing goes for other expenses you’re paying on a monthly basis for being a content creator on the platform. The only guideline that will allow you to do that is that the said expenses need to be necessary and ordinary for your business. So always keep your record every time you need to pay for any necessary fees in running your OnlyFans account.
If you are a content creator on OnlyFans, you are not an employee of the platform, but you are a business owner or a sole proprietor. It means that all of the expenses you’ve paid for running your business will be deducted from the aggregate amount of the taxes you owed. So here are some you can add to your list of possible expenses that you can write off against the income you earn from being a content creator on OnlyFans.
- Beauty products and supplies
- Makeup and hairstyling fees
- Advertising and marketing expenses
- Props and photography
- Travel expenses
- Repairs and maintenances
- Professional and legal fees
- Tax return preparation
- Office supplies
- Dues and subscription fees
- Web services
- Internet bill
- Computer apps and systems
- Charitable events
These are some of the expenses you can include in your return to have tax deductibles. Also, it’ll give you so much help if you have a separate checking account where your funds will be coming from to pay for all of your expenses. You can then transfer whatever amount is left to your personal or savings account to make it easier for you to track your expenses and income every time you process your returns quarterly.
OnlyFans Creator 1099s
To complete filing your tax returns during the tax season, you have to gather all of the necessary documents and forms that have already been filled out. If you are a hobbyist on OnlyFans, you are required to pay your owed taxes, and if your income is $600 or more, the brand you’re working for on the platform should give you the Form Onlyfans 1099. Then, you have to include it in your Form 1040 on the section of taxable earnings.
Keep in mind that any business will only be required to give you the IRS 1099-K when you have at least $20,000 in payments and 200 individual payments. However, even without meeting these particular criteria, some companies may still be required to send you this form. In addition, during the tax year, you will also receive Form 1099NEC, where you can find the aggregate amount of your income that OnlyFans paid you. Again, it is you, as a taxpayer, who will process your tax returns from your earnings on the platform during the tax season. Not reporting Form 1099 income is a top IRS audit trigger.
Tax Tips for OnlyFans Creators
If you’ve been a content creator on OnlyFans for quite some time now, you can check these a couple of tax tips below.
Have a Separate Bank Account for Business
As mentioned earlier, it’ll give you so much help when you open a separate bank account that you can use for your business on the OnlyFans platform. It’s where you can get your funds to pay all of your expenses, and it’s also where you’re going to put all of the income you’ve earned from OnlyFans. Always remember, don’t use your personal bank account for any business transactions. Doing so will significantly make it easier for you to track all of your earnings and expenses on the platform every time you process your tax returns.
Set Aside a Percentage of Your Money
You may have to set aside a particular amount of money that you have to use to pay the federal taxes you owe during the tax season. As mentioned earlier, opening a separate bank account for your business will be of so much help. So the more your earnings on OnlyFans increase, the more money you can set aside to cover all your expenses and tax bills in the future.
Do Your Research
It’s a fact that many people will usually encounter different issues and challenges when it comes to dealing with their federal taxes as business owners or self-employed individuals in the country. They sometimes have questions about the necessary documents and forms to file and struggle with the process. So if you’re one of them, don’t hesitate to ask questions and get them answered. You can do your research to look for relevant information, making sure that you’re doing the right thing. Besides that, you can also get in touch with a tax professional in your area for any tax advice and assistance you need.
The More You Earn, The More Taxes You Owe
Not just in the United States, but this is also true in many countries worldwide. The more income you’re earning on a regular basis, the more the taxes you owe will increase as well. However, please don’t get discouraged about it because you’re still earning from your OnlyFans account by selling your content, subscriptions, tips, and many others. It may not be your primary source of income, but it’ll surely help you and your family in the long run. Keep in mind that the IRS generally has three years to audit you.
Tax Professionals are Big Help
You don’t need to be a tax expert in dealing with your tax return every quarter or every year. If you always have a busy schedule and may not have enough time to prepare all of your documents and other forms needed in filing your return, as mentioned earlier, you can always approach any tax professionals in your area. Doing so will help you save more time and effort in filing your return for the income that you earn from your OnlyFans account.
How to Avoid Paying Taxes on OnlyFans?
All content creators of OnlyFans in the United States are required to pay legal taxes from the income they are earning on the platform. It’s because if you’re creating content, it means that you’re running a business with yourself. So if you’re wondering how to not get taxed on OnlyFans, there’s no way you can avoid paying taxes on this platform. If you do so, you’ll surely face the corresponding penalties and consequences. However, there’s a way to lessen the total amount of taxes you owe from your taxable income on the platform. You can list all of your OnlyFans business expenses that you paid while running your account. It’s because, as mentioned earlier, these expenses will be deducted from the taxes of your total earnings.
Do you pay tax on OnlyFans income?
If you’re earning money from your OnlyFans account, you are required to pay taxes from your income on the platform as mandated by the U.S. government. You have to add up all of your earnings from pay-per-views, subscriptions, donations, tips, and the like. Then, you can also have some deductibles from all of the expenses you’ve paid for running your OnlyFans account. Just make sure to provide all documents and proofs to validate these expenses to the IRS.
Does OnlyFans report to the IRS?
OnlyFans reports to the IRS for all of your income you’ve earned from them. But the platform will not take out your owed taxes every time they pay you for your earnings. That’s why you have to make sure to process it yourself on a quarterly basis. Keep in mind that due dates for filing your tax return will be every 15th of April, June, September, and January.
Will OnlyFans show up on my taxes and account?
Residents in the United States are subject to paying taxes by filling out Form 1099 when they make an annual income of $600. That includes the income they’re earning from being a content creator on OnlyFans. Then, the platform will provide them with the necessary form they need to fill out, especially those who have been getting a self-employed income. So if you are one of those content creators on OnlyFans, it’ll show up on your taxes and on your account.
How do I do taxes for an OnlyFans account I deleted?
According to the law in the United States, if you have an account on OnlyFans that you deleted, the platform is required to give you Form 1099 that you need when filing your return. So if you haven’t received it yet, you can contact OnlyFans for them to provide it to you. But if you haven’t received any response from them after a couple of attempts, you can directly contact the IRS to ask for further assistance on how to proceed with filing your tax returns.
What tax form do you fill out for OnlyFans?
Many people are asking how to file taxes for OnlyFans and what tax forms to fill out? During the tax season, every content creator of OnlyFans should file their tax returns on time. Most of them will fill out Profit or Loss From a Business, Form Schedule C, and they will also submit their tax return Form 1040. Then, the list of your expenses will be shown in the middle of the form, and your total income will be at the top of the page. After that, you have to settle your self-employment tax and income tax on the net income you’ve earned on OnlyFans shown on your Form Schedule C. If you want to know more about it, you can visit the official website of the IRS to check further details.
When does OnlyFans send out tax forms?
As a content creator on OnlyFans, you are not an employee of the platform, but you are considered as a business owner or a sole proprietor of your business. At the end of the year, you won’t get the W2, but you will receive Form 1099NEC and other IRS tax information where you can see the aggregate amount of your income that OnlyFans paid you.
Does OnlyFans take out taxes?
OnlyFans will not take out taxes from the income you’ve earned from them. So it is you who will process it on a quarterly basis. It’ll be due on the 15th of April, June, September, and January. Besides that, you always have to keep in mind that you need to process your tax returns on these dates so that you can avoid paying possible penalties and interest for late payments.
How to fill out W9 for OnlyFans?
When you create an account on OnlyFans, the platform will require you to fill out a Form W-9. Also, you only have to use your Social Security number as your business ID number on the platform, and there’s no need to use your Federal Employer ID number from the Internal Revenue Service.
When filling out the said form, you have to provide your complete name on the first line. If you don’t plan to form a corporation or a company, you can just leave the second line blank and check the first box on the line or box three. Then, on the line or box four, as it deals with exemptions, most content creators will just leave it blank as well. After that, you have to provide your exact mailing address on the fifth and sixth lines of the said form. Besides that, most content creators will also skip the seventh line as well as the requester’s name and address.
Below the seventh line, you can find Part 1, where you have to provide your Federal ID number when you did the said form for a separate company or simply give your Social Security number on the space provided. But keep in mind that you should not provide both. After that, you can now proceed to Part 2, where you need to put your signature and the date.
Are OnlyFans creators considered self employed for tax purposes?
If you’ve created your Only Fans account for yourself and are not making use of it for a particular company or corporation, then you are considered self-employed for tax purposes. It means that you are required to pay and process your OnlyFans filing taxes as both the employee and employer on any income you’re earning on the platform.
Many people may always find it interesting and tempting to have another income aside from their primary source. So if you’re one of them and you plan to create an account on OnlyFans for this reason, that will be a great idea. It’s because, at the end of the day, you’ll be getting more money you need to cover your everyday expenses and monthly bills. However, don’t forget to check relevant information and important details with regard to the tax implications while using this platform. It’ll always be best for you to know how to take advantage of the OnlyFans account for more income and be aware of your tax obligations.