Launched in 2016, OnlyFans became one of the world’s most successful content subscription platforms. Some of the web models and influencers featured on the website had their careers boosted by the exposition on the platform, such as Blac Chyna, Bella Thorne, and Pia Mia.
However, everything comes at a cost, which means content producers on OnlyFans must also pay taxes. In this article, you will find essential tax advice for OnlyFans creators.
Is OnlyFans Income Subject to Taxes? – The Basics
When a content producer has an account registered on OnlyFans, that person is not considered a platform’s employee for tax purposes. Accordingly, OnlyFans creators must pay self-employment taxes and income taxes.
The Internal Revenue Service (IRS) requires self-employees producing content for the website to submit specific tax returns according to their situation. Please note that OnlyFans will not withdraw taxes from the amount paid by fans.
The fans pay to gain access to the content of an account owner, from which OnlyFans charges a subscription fee. Content producers must handle their tax obligations by themselves, which can be challenging without the guidance of an experienced accountant.
Content producers must keep tracking of the income obtained through the platform and save all business receipts. Depending on the situation and goals of an OnlyFans creator, it is possible to set up a single-member LLC or another legal entity to run the business more efficiently.
OnlyFans Tax Advice – Deductible Expenses and Write-Offs
While OnlyFans creators must pay taxes like any other “small business” owner, the Internal Revenue Service (IRS) offers several possibilities to deduct business-related expenses. It is hard to find an entertainment industry as competitive as the adult content business.
Every day, content producers need to innovate and surprise fans to keep them craving for more. Otherwise, a fan base without interest in the content will eventually lead to financial losses. In a super-competitive environment, innovating means spending more money to please customers.
Beauty treatments, fancy editing techniques, costumes, special make-up, and traveling to record content in exotic settings are just some examples of expenses taken by adult content producers.
Under IRS standards, it is possible to deduct “ordinary” and “necessary” expenses from a business. An “ordinary” expense refers to a primary expense that is impossible not to incur. On the other hand, a “necessary” expense is not as essential, but appropriate and useful to the business operations. The list of deductible expenses for OnlyFans creators includes:
- Recording equipment
- Editing services
- Lighting accessories
- Beauty treatments
- Lingerie, costumes, and wigs
- Home office expenses
- Office supplies
- Home studio utilities (electricity, wi-fi, water, etc.)
- Advertisement expenses
- Legal and professional assistance fees (i.e., accountants, agents, etc.)
- Business-related traveling and lodging
- Business-related car expenses
Many OnlyFans creators work as independent content producers, which means certain expenses are intertwined between personal and business use. When it is time to deduct expenses, it is crucial to separate business and non-business expenses.
For example, if an OnlyFans model used only 25% of her internet time for business-related purposes, it is possible to write off 25% of the internet bill as part of the business expenses.
OnlyFans Tax Advice – Immediately Contact an Expert CPA
It is not easy to handle the complex tax regulations applied to OnlyFans creators without the help of an experienced accountant. 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.
