Within no time, OnlyFans became the world’s most successful-but-controversial content subscription platform. Profitable business opportunities for content creators, this unique website became a hub for independent adult content producers and web models.
In this article, you will discover how much you need to earn on OnlyFans to file taxes.
How Much Money Do You Have to Make on OnlyFans to File Taxes? – The Essentials
If you earn income by producing and posting content on an OnlyFans account, you are not considered one of the platform’s employees. The Internal Revenue Service (IRS) treats content producers on OnlyFans as “small business owners” for tax purposes, which means they need to pay taxes as anyone else.
The tax status of OnlyFans content creators is similar to that of self-employers, which requires them to pay income tax and self-employment tax. Fortunately, it is possible to claim several deductions available with IRS, using different strategies to save as much money as possible with full legal compliance.
US residents earning income through OnlyFans may receive different tax forms to file with IRS depending on the amount made per year and other factors.
IRS Form 1099 NEC
IRS Form 1099 NEC (Nonemployee Compensation & Independent Contractors) is the basic tax form for OnlyFans content creators. Once you start making more than $600 through the platform, OnlyFans will send Form 1099-NEC as part of the website’s policy.
Please note that content creators must handle all the required tax demands on their own. Content creators who do not earn at least $600 will not likely receive this tax form. However, any taxes due must be reported to the IRS.
Oftentimes, the best approach is to consult an expert CPA to avoid costly mistakes and ensure full compliance with the relevant tax regulations. As required by law, OnlyFans must mail out the tax forms to content creators by January 31st.
The platform will also direct a copy of IRS Form 1099 to the federal agency. Accordingly, content creators earning above the tax threshold will be identified if they do not file their returns timely.
Content creators must always verify the address on their accounts, as OnlyFans will send the forms to the address given to them. If the forms were sent to the wrong address and you qualify to receive Form 1099-NEC, it is possible to download the tax form directly from your OnlyFans account.
IRS Form 1099-K
OnlyFans creators who earn money through PayPal for external content may need to file IRS Form 1099-K (Payment Card and Third-Party Network Transactions). This specific form is only sent to content creators who have processed at least $20,000 worth of payments or 200 transactions during the previous year.
Depending on the content creator’s state, OnlyFans will send Form 1099-K instead of Form 1099-NEC. If you produce content for OnlyFans and earn over $600 in gross payments living in Massachusetts or Vermont, you will most likely receive Form 1099-K.
Please note that the Biden Administration has recently passed a law lowering the tax threshold for third-party payment processors. Hence, the $20,000 threshold will soon be replaced by a minimum threshold of $600.
Financial & Tax Planning for OnlyFans Content Creators – Immediately Consult an Expert CPA
Ensure full legal compliance and save money on taxes. Waste no time – call Edward D. Quilca, CPA at (786) 310-5582 or email [email protected] to find the best tax-saving strategy for your case.
