Onlyfans Taxes Guide For Creators Based In USA [Updated For 2023]
Are you currently making loads of money on Only Fans? and now you’re worried about your OnlyFans taxes 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 have come to the right person.
I will answer the 5 most in-demand questions we receive from OnlyFan content creators… let’s do it. We are here for you.
We’ve been getting a good deal of D.M.s from OnlyFan content creators in the United States, and we decided to create video & blog posts 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 OnlyFans Tax Forms Should I Worry About?
So as an Onlyfan content creator, I’m going to make a couple of assumptions; One is that you just started, and the other is that 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 considers self-employed, and you will most likely receive only a fan 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 over $600 this year.
If you have not reached this mark, you likely won’t receive one, and the IRS will not be expecting a tax return from you.
#2- How To File Taxes For Onlyfans Step-by-Step
The First two lines
Fill out Line 1, which is your full name. If you operate a business as an LLC or a corporation, fill in that company’s name on line 2. Leave Line 2 blank if you didn’t create a firm.
The Third Box
Most of you viewing Box 3 will check the first box, which states individual, single proprietor, or single member LLC. So if you didn’t establish a company, you’d choose the first option.
The Forth Box
Many of you will skip Box 4 since it covers deductions.
The Fifth & The Sixth Lines
In Lines 5 and 6, you may provide OnlyFans or Myystar with the mailing address you want to give them.
The seventh Line
Skip it.
Tip: Do not provide a social security number or a federal identification number in the requester’s name and address. Most of you who do not create your own company will simply input your social security number in that space provided.
#3-What If Your Annual Earnings Are More Than $600?
If you reach this figure, I plan to complete a tax return.
The most important schedule to you is 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.
At the end of the year. Most content producers will use a form Schedule C, Profit or Loss From A Business, which they will submit to the IRS with their Form 1040 tax return.
This form would contain all of the accounting we’ve gone through up to this point. As a result, your net income will be shown at the top, and your various expenses will be shown in the middle section of the form.
After taking out any legitimate business expenses, you’ll pay income and self-employment taxes on the Schedule C amount.
#3- What About Self-Employment Tax?
Individual and self-employment rates will be used to calculate Your OnlyFans’ tax obligation, totaling 15.3% above the general tax. In contrast, Myystar’s rate is 15%, plus the 3.8 percent Medicare levy.
The way to pay FICA tax is through self-employment. Many of you who have worked before may remember having your FICA taxes removed from your wages.
The Social Security and Medicare Contributions are what make up the FICA tax. You must also pay this when you operate your own business. The total amount of federal, State, and local income taxes
You must set aside money every time you get paid by OnlyFans and Myystar so you may pay your due OnlyFans taxes later. The cash they give you isn’t the same as the amount of money you have to spend on personal costs.
Working with a competent CPA must ensure that your accounting is done monthly and that your OnlyFans taxes are calculated throughout the year.
Although you may want to wait until April 15 to pay your tax obligations, you must understand that this isn’t a realistic option. Self-employed individuals must pay their taxes quarterly throughout the year.
You’ll be subject to penalties and interest if you don’t pay your taxes in this manner and wait to do so when you submit your yearly OnlyFans taxes.
Free Cash Flow will help you monitor your progress regularly. Every step of the way, with your OnlyFans and Myystar accounts, you’ll have access to expert assistance and pay your OnlyFans taxes with no worries.
Further Reading:
#2- What Are Some Tax Deductions Can Help Reduce My Onlyfans Taxes?
So as OnlyFan’s sole proprietor, I will 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.
Remember, you’ll pay the first 7.65% whether you’re self-employed or work for someone else. You’re indirectly contributing to your employer’s share because your employer doesn’t pay that money.
- Home Office Deductions
- Internet and Phone Bill
- Health insurance premium – If you are self-employed, pay for your health insurance premiums, and are not eligible to participate in a plan through your spouse’s employer, you can deduct all your health, dental, and qualified long-term care (LTC) insurance premiums.
You can also deduct premiums you paid to provide coverage for your spouse, your dependents, and your children 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 traveling for business, at a business conference, or entertaining a client. The meal cannot be lavish under the circumstances. In the past, you could only deduct 50% of the meal’s actual cost if you kept your receipts or 50% of the standard meal allowance if you kept records of your travel’s time, place, and business purpose 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 December 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 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), transportation at your destination (such as car rental, Uber fare, or subway tickets), lodging, and meals.
Feel free to watch our video on squeezing some free travel into your business travel.
- Vehicle Use – Driving expenses are tax-deductible. Your driving expenses are tax-deductible when you use your car for business. Keep excellent records of each trip’s date, mileage, and purpose, and don’t try to claim personal car trips as business car trips.
You can calculate your deduction using 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 Onlyfans taxes payments?
This question depends on how much you make on your Onlyfans account. You can safely make payments annually if you make less than 6 digits. A penalty could still be 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, technically, it’s always good to think about only fans” taxes as an all-year event instead of just during April 15 or May 17. This year was what people considered tax time.
If you make more than 6 figures a year, I strongly encourage you 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 set up an LLC?
This is a great question. So in case you don’t know, an LLC protects your business. It limits your liability if you do something that gets you sued or lawsuit, so they can’t come after your assets.
LLC is quite easy these days, and there are 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 and see your activity and revenue level growing.
#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 does not pertain to most OnlyFans content creators. The only time this will trigger is if you also have a merch store or a POD setup to go along with your OF setup, so this would cross over the e-commerce, and that’s the only time you would have to start worrying about sales tax.
Regarding acquiring a business license, that may be necessary depending on your State. However, it is another one of those factors that comes down to how much your earnings are. How necessary it is if you are earning a great deal vs. just starting.
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 with no state income tax, such as Nevada and Texas, then you’re in luck and don’t have to add this to your Onlyfans taxes this year.
If you are a content creator making more than 6 figures, I would recommend you seek professional help to help you not only just file your taxes but also help with your bookkeeping and consultation services.
This will greatly increase the burden on you, and if you hire someone who understands your business model, they can also ensure you don’t overpay on your taxes and maximize your savings, and keep every penny you deserve!
You may get overwhelmed by all this stuff (which is not your fault), so consider booking a free consultation call with Alan Chen (a CPA with +20 years of experience) to get all your taxes.
FAQ
Can your employer see Onlyfans on your tax forms?
What does it mean when OnlyFans shows up on a background check? If the potential employer conducted a full investigation and provided you with a 1099 tax form from OnlyFans, your OnlyFans account can appear on a background check.
How do I declare my only fan’s income?
Starting in whatever tax year you created your OnlyFans account, you must notify HMRC immediately that you must submit a personal tax return. They will provide you with a Unique Tax Reference (UTR) number, which you’ll need to file your taxes.
How Do Onlyfans Taxes Work?
Every influencer must pay taxes in line with Lineh under their country’s rules. If you make over $600 from a brand, you should receive a 1099 if you live in the United States. OnlyFans will also need you to complete a W-9 when you join them, and they will send you (and the IRS) 1099s of their own.
Is Becoming an Influencer Considered a Kind of Self-Employment?
If you are self-employed rather than working for an agency, you are self-employed. This implies that you must pay your employer and yourself in taxes on any income you earn.
