onlyfans has become one of the biggest social media platforms in recent years. it has become a lucrative place for content creators to earn a good amount of money. If you are an onlyfans girl or boy who earns income through the content subscription service, then you will need to file your independent contractor taxes at the end of the year.
an onlyfans content creator is considered self-employed. So, this means that they are required to pay certain taxes and are eligible for tax deductions. In this guide, we’ll go over the tips you need to know so you can file your 1099 Onlyfans taxes in the best possible way. Let’s start with the tax forms you’ll receive as a content creator.
note: if you want an app to scan your bank or credit card receipts, track your onlyfans spending, calculate your taxes, and send you filing deadline reminders, try bonsai tax. our software automatically records your business-related expenses and saves you a ton of money during tax season. in fact, users typically save $5,600 from their tax bill at the end of the year (that’s a lot of money to leave on the table). Claim your 14-day free trial here.
1099s you will receive as an onlyfans content creator
If you are an independent content creator on the platform, you will receive a 1099 information statement from onlyfans or a third-party payment processor if you meet certain requirements. Let’s go over some of the common 1099 forms you’ll deal with as a self-employed onlyfans content creator.
irs 1099-nec
A business must send you a 1099-nec if they paid you more than $600. Due to the low filing threshold, the 1099-NEC is the most common tax form sent to the self-employed. onlyfans will send you a 1099-nec if you earned more than $600 using their platform. If you made less than $600 from the application, you most likely will not receive a tax form. however, you are still responsible for reporting the earned income and paying taxes on it by the due date.
onlyfans will submit the forms before January 31st, as required by law. The company will also send a copy of the 1099 form to the IRS. Then the IRS will know if you didn’t pay taxes on your earnings. If you didn’t receive a 1099 in the mail and you know you should have, please verify the address in your onlyfans account. onlyfans might have sent the tax form to the wrong address.
If you are eligible to receive a 1099-nec, you can log in to your onlyfans account and download the tax form.
If you need help completing your tax return, read our step-by-step guide to filing your 1099-nec.
1099-k
If you accept payments through paypal for off-platform content, you may receive a 1099-k. the requirements to receive a 1099-k are if you processed at least $20,000 in payments and at least 200 transactions for you in the previous year.
onlyfans will not send you the 1099-k, however you will receive the tax form from the third party payment processor.
Depending on the state you live in, you may receive a 1099-k instead of a 1099-nec, i.e. if you live in massachusetts or vermont and have more than $600 in gross payments, then you will file a 1099-k.
new laws in 2022
united states president joe biden passed a new law requiring a lower threshold for receiving a 1099-k from third-party payment processors. instead of $20,000 in payments, the minimum threshold will be changed to $600. this is to catch people who are evading taxes.
report all your taxable income
if you earn income outside of the onlyfans platform, the irs still considers the income to be taxable income. It doesn’t matter if you’re making money through a single onlyfans account, a web chat service, or a snapchat premium account, you must report all of your gross income from all sources.
If you receive a 1099, that means no taxes are withheld. An employee, for example, will have part of his salary withheld to pay for Social Security and Medicare taxes. onlyfans influencers, on the other hand, pay taxes on their own.
pay self-employment taxes on your earnings
First, as a self-employed business owner, you will be responsible for paying federal and state income taxes. Depending on the state his tax ID is in, he will pay income taxes between 0% and 10.75% on his earnings. When it comes to your federal taxes, the rate can range from 10% to 37%, depending on how much you earn. Unlike self-employment tax, the amount of money you owe will depend on how much money you earn during the year.
You will also have to pay the taxes of the fica or the federal insurance contributions law. Fica taxes are made up of Social Security (12.4%) and Medicare (2.9%) taxes or self-employment tax on the income you earn. In other words, you will have to pay 15.3% in self-employment taxes. onlyfans does not withhold taxes from your income unlike if you were an employee.
If you worked in more than one state for the entire year, you’ll almost certainly need to submit tax forms for every state you earned money in, as well as every state you lived in while working.
p>
Use our free tool to calculate your 1099 taxes.
Every time you get paid, you’ll want to set aside money for self-employment taxes. this will help you make your quarterly estimated tax payments.
when you don’t need to pay taxes on self-employment
The Internal Revenue Service (IRS) says you don’t have to pay Social Security and Medicare taxes if you earned less than $400 in self-employment income. You may be free from self-employment tax, but you still have to claim the earnings on your income tax. You will not owe self-employment tax if your onlyfans profile is only used as a hobby and not as a business.
circumstances for a hobby versus a business
onlyfans fans do not have to pay taxes on self-employment. The IRS has clear guidelines on what is considered a hobby versus a business. To determine if creating Onlyfans content is a hobby or a business, ask yourself these questions (and answer them honestly).
- Are your records up to date?
- Do you have enough knowledge on the subject to turn it into a business?
- Is your intention to make money and your time and effort reflect it?
- Do you change your business model to make it more profitable?
- Do you depend on income from the activity to make ends meet?
- Have you ever made money doing something similar before, ie other social media companies?
- Are your losses a typical part of the startup process or are they the result of events beyond your control? </li
- Were previous earnings stable or did some years see more activity than others?
- Do you think you will be able to make money from this hobby in the future?
If you answered yes to any of these questions, your onlyfans account can be considered a business. If you answered “no” to all of these questions, you may be managing your account as a hobby, but you still owe income taxes. complete a 1040 form and file it in the taxable earnings section.
If you determine that you are a hobbyist, you cannot claim any business expenses for deductions as they will be considered personal expenses.
you will have to pay quarterly taxes…
since the u.s. Operating on a “pay as you go” tax system, you’ll need to make payments to the IRS throughout the year. Quarterly taxes are designed to help the self-employed avoid paying a big bill at the end of the year or at tax time.
You can calculate how much you’ll need to send to the IRS by taking your total tax liability from the previous year (such as self-employment, income, and other taxes) and dividing that number by four.
Let’s review the due dates for quarterly payments.
quarterly tax deadlines
The deadlines for paying quarterly taxes are:
- April 15th
- June 15th
- September 15th
- January 15th of the following year
You can send payments directly to the IRS through Direct Pay or use Form 1040-ES to calculate and pay estimated taxes.
For a more comprehensive guide on how to make payments, please see our article on submitting quarterly taxes.
if you miss the deadline…
Let’s talk about if you completely forgot to submit your estimated tax payment and if you submitted less than you should.
First, the IRS is not as lenient if you miss a due date and you may be fined a penalty fee. For making a quarterly late tax payment, you could be fined more than 0.5% of your balance due for each month (or part of a month).
so if you missed a deadline, you’ll want to send your payment as soon as possible as the penalty will add up.
Now, let’s talk about if you send less than you owe.
sending less than you should…
If you calculate your payment incorrectly and send less than you owe, you could pay an underpayment penalty. in 2021, the underpayment penalty is 3% percent for freelancers. to avoid this fine, you must have paid at least 90% of the tax obligation of the previous year.
self-employment tax deductions you qualify for
As an onlyfans content creator, you’ll want to ask yourself what things you bought or other expenses to help you create content. this will be reported on schedule c or profit and loss statement. Schedule C will be included on your Form 1040 tax return. You will need to pay self-employment tax and income tax on the net income reported on your Schedule C.
You’ll be able to deduct business expenses from your earnings and only pay taxes on the remaining amount (who knows, you might even break even on your 1099 taxes).
Let’s review some fan-only influencer tax deductions.
- cell phone bill : You can deduct the business-related portion of your cell phone bill from your tax bill, that is, if you only use your cell phone for 25% of the time for business, you can deduct 25% of the costs as a tax deduction.
- camera and equipment – if you bought a good camera to film your onlyfans content, then it is a tax-deductible. equipment such as lighting, a tripod, or a separate computer fall into this category
- content accessories. I won’t go into too much detail here, but if you used any props for content/photo/video shoots, they are deductible. it must be purchased for non-personal use and primarily for business or content creation to count as a tax deduction.
- home office deduction – such as self-employment content own creator, you can deduct a portion of your home from your taxes. for example, you can discount an area of your house dedicated to making videos or doing photo sessions. Remember, if you claim a home office deduction, the portion of your home must be a “principal place of business” and used exclusively for business-related activities. a part of your rent can also be cancelled. You can also claim a portion of your utility bill.
- internet or wi-fi: As an online content creator, you need the internet to function. You can deduct a part of your internet bill from your taxes.
- Clothes: Clothes you bought to create content are also deductible. fee warning, clothing may not be worn for “everyday use”. You can’t deduct clothes like jeans that you might wear at a grocery store or mall.
- Mileage: Track your miles for business driving. the standard mileage deduction only requires you to keep track of qualifying miles driven. for 2021, the rate is 56 cents per mile.
- hotels/airbnbs: If you rented a luxury hotel or airbnb for one night for a photo shoot, then these expenses they are deductible.
- software: If you paid for various software, such as editing or tax applications to help you run your business, you can deduct the money spent on your taxes
- stage makeup and beauty supplies: Any beauty accessory you wear specifically for a photo or video shoot is tax deductible.
- Earned Income Credit and Additional Child Tax Credit: This isn’t necessarily a deduction, but you can offset income tax and self-employment tax by claiming this tax refund. learn more here.
note: If you want software to automatically scan your bank/credit card statements and track your spending for your tax return, try bonsai tax. our app literally logs potential cancellations to save money with the push of a button. sign up for a 14-day free trial here.
organize your tax receipts
There are a few ways to organize your tax receipts. The IRS has stayed current and allows digital receipts as proof of your tax-deductible expenses. another method is to manually track your receipts or have a business bank account/credit card designated specifically for your onlyfans deductions.
Online storage of your receipts with software is recommended so you don’t lose your records in case you are audited by the IRS.
It’s time to file your onlyfans taxes!
There you have it. everything you need to know to file your onlyfans tax return. remember to mark your calendars for quarterly taxes, as well as set aside money throughout the year to pay your estimated, social security, and medicare taxes. he doesn’t want a surprise penalty at the end of the fiscal year.
We hope this guide has made filing 1099 taxes easier for creators. remember to check out our online software, bonsai tax to help you file your onlyfans tax return and save a ton of money. try a free 14-day trial today.
If you have any questions, we always recommend consulting with an experienced accountant or tax preparer at the end of the tax year.