How to Fill Out 1099 for OnlyFans Creators
OnlyFans content creators are considered self-employed workers. As self-employed workers, also known as independent contractors, they are required to pay their mandatory state and federal taxes and social security and medicare contributions. Content creators who have earned more than US$400 in income and tips are required to file a 1099. This tax form records independent contractors’ gross income (i.e., earnings and tips), business expense deductions, net income, and taxes due on the net income. Independent contractors’ net income is taxed at 15.3%.
Types of Tax Deductible Business Expenses: Ordinary and Necessary
The types of business expenses that OnlyFans content creators can deduct from their gross income are classified as ordinary and necessary expenses. Ordinary expenses are costs that most business owners will have when operating their businesses. Necessary expenses are costs that are specific to a particular type of business. These expenses are not absolutely necessary for the business to operate. However, they do make it possible for the business to run more efficiently, productively, and easily.
1099 Forms & Schedules
To file your 1099 with the IRS, you must file 4 schedules and forms Schedule C, Form 8829, Form 4562, and Schedule SE.
Form 8829 Business Use of Home Office
OnlyFans content creators use this form to list the deductions they are claiming for the use of a home business office or workspace. The tax filer lists the fees associated with the dedicated space and any costs associated with its upkeep and maintenance. The costs normally listed are rent, utilities, Internet service, home insurance.
Form 4562 Business Use of Car
If you use your personal vehicle for your business or have purchased a vehicle that you use for your business, you can deduct your vehicle-related costs as business expenses. Vehicle-related business expenses include the costs for gas, mileage, maintenance, repairs, parking, and toll.
Schedule C Business Income or Loss
The expenses not listed on Forms 8829 and 4562 are listed on Schedule C. Items that may be listed on Schedule C include advertising and marketing, costumes, props, toys, video editing, lighting, and professional services.
Schedule SE Self-Employment Tax
On this form, you subtract all of your tax-deductible business expenses from your gross income to get your net income. You can determine your taxes after calculating your net income.
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Ordinary Expenses
Ordinary expenses that can be deducted include:
- Cell phone
- Computer equipment
- Editing services
- Office supplies
- OnlyFans platform fees
- Professional photoshoots
- Home office deduction
- Business insurance
- Self-employed health insurance
- Marketing and advertising
- Filming equipment
- Sound equipment
- Lighting
- Props for staging
- Commissions
- Payment processing fees
- Name registration fees
- Utilities
- Travel costs
Non-Deductible Expenses
Expenses that usually cannot be deducted from your gross income include:
- Massages
- Spa treatments
- Manicures and pedicures
- Facials
- Tattoos
- Vitamins
- Makeup
- Tanning services
- Hair removal services
- Cosmetic surgery
- Skincare products
- Makeup
- Clothing
- Gym memberships
- Personal trainer
- Botox and lip fillers
- Dental work
- Hair transplant
Exceptions to Non-Deductible Expenses
Items from the list of non-deductible expenses can become deductible business expenses if you are being paid to model them or promote them.
Niche Write-Offs
If you are providing exclusive content for your customers, then you can write off any special supplies that you must purchase in order to produce it. Note, any special supplies purchased to produce the exclusive content cannot be used outside your OnlyFans business if you want to deduct it as a business expense.
Cosmetic Surgery
Cosmetic surgery, like breast enlargement, is tax-deductible if the surgery directly increases your profits and provides almost no personal benefits to the OnlyFans owner/operator who got the surgery (Hess v. Commissioner of the Internal Revenue, 271 F.2d 104).
Cosplay
If you dress in special costumes (e.g., historical, anima, sexual) for your exclusive content, you can deduct the cost of the special clothing and any other accessories that you purchase to produce your exclusive content. If you do this, you should keep copies of your customers’ requests for special content. The documentation will help substantiate your claims that the purchase of the cosplay items was a business expense.
Personal Branding
If you buy special clothing or clothing accessories that are distinctive, regularly used, specific to you and your image, and aligns with your image and marketing objective. For example, Lady Gaga and the House of Gaga engaged in branding via Lady Gaga’s clothing and accessories that the singer did not wear when she was not presenting herself Lady Gaga representing the house of Gaga.
Fitness Guru/Trainer
If you are a fitness guru, trainer, or your content is about achieving ultimate extreme fitness goals, then you may be able to deduct the cost of a gym membership because workouts and using different types of gym equipment is central to your content, brand, and image.
Fashionista
A fashion influencer is someone who models, promotes, markets, and/or advises people on fashion, fashion accessories, etc. If this is your job, and you only use the clothing and accessories for your business, then the purchases are tax-deductible. This is especially true if you are paid to promote, model, or review outfits and accessories.
IRS Tax Deduction Myths
Tax deduction myths have a kernel of truth and not much more. Before believing any of the wild stories you have been told about unbelievable tax write-offs, ask for the source (i.e., court case name) and read the ENTIRE case. After all, the devil is in the details, and the tax code has a lot of details.
Wrap Up
If you are an OnlyFans content creator and your business has earned US$400 or more during the tax year, you must file a 1099. Your earnings will be taxed at a flat rate of 15.3%. In order to decrease your tax burden, you should maximize your personal and business tax deductions. To maximize your deductions, carefully record and document (with receipts) your home business office, travel, ordinary, and necessary expenses. Furthermore, if you produce exclusive content for your customers and are required to purchase special clothing and supplies for the content, then you can deduct the business expense as long as you do not use any of the supplies for your personal use.
Free Cash Flow Agency can help you identify all your potential business expenses that you can deduct from your gross income. The professionals you work with will help you put together the records and receipts that you need to substantiate your business expense claims and defend your tax returns if you are audited by the IRS.
