OnlyFans Taxes – Everything You Must Know (Forms Too!)
Is it required to pay tax on your earnings from OnlyFans?
In most instances, yes.
Your profits on OnlyFans are liable to taxation under income tax and self-employment tax. This encompasses funds garnered from subscriptions, gratuities, contributions, PPV (pay-per-view) content, as well as other revenue streams facilitated by the platform.
Your OnlyFans revenue is subject to income tax similar to a typical 9-5 job. The higher your earnings, the greater your tax liability. Aside from income tax, you must also settle self-employment tax. The latter is a fixed proportion of your earnings.
There exists a particular income threshold that must be surpassed before becoming liable to pay taxes. This threshold varies primarily depending on your country of domicile.
In numerous countries, even if you do not earn adequate income to necessitate tax payments, you are still obliged to declare the sum you’ve earned.
Seems laborious, I realize. This post is aimed at providing you with a clearer comprehension of your tax obligations and how you can fulfill them.
What Does Self-employment Tax Entail?
The fundamental concept to grasp prior to filing OnlyFans taxes as a content creator is that you are not an employee of the platform.
You are operating your own modest enterprise, and you are the exclusive proprietor. Your association with OnlyFans is that of an independent contractor.
You are deemed to be self-employed according to the law. Hence, you are mandated to settle self-employment tax in addition to income tax.
In the U.S., self-employment tax comprises Social Security tax (12.4%) and medicare tax (2.9%), totaling 15.3%. This is equivalent to the FICA tax deducted from the paychecks of employed individuals.
Self-employment tax is the method through which business proprietors and independent contractors pay FICA tax.
Which Documents Should You Familiarize Yourself With?
Outlined below are the tax forms you will encounter when addressing your OnlyFans taxes in sequence:
W-9 – Request for Taxpayer Identification Number and Certification
The IRS mandates that OnlyFans retain your tax details on record.
OnlyFans does not automatically withhold taxes from your earnings. They transfer to you the total amount you earn (after deducting their 20% share).
They require your tax information to inform the IRS that you are liable for taxes on the funds they transfer to you.
Upon attempting to withdraw your earnings for the first time on OnlyFans, you will be required to complete a w9 form.
Instructions for Completing W9 for OnlyFans
The form may appear daunting, particularly if you are dealing with taxes for the first time. Presented below are some step-by-step guidelines to aid you in completing it.
- Line 1: Your complete name.
- Line 2: You can leave this blank unless you possess a DBA “doing business as” name or an LLC.
- Line 3: Select the first box, “Individual/sole proprietor or single-member LLC.”
- Line 4: Keep this section empty.
- Lines 5 and 6: Your mailing address.
- Line 7: Leave this portion vacant.
- Part 1: Input your SSN (social security number).
- Part 2: Append your signature and date to the form.
Only once you have completed the OnlyFans W9 form, are you permitted to retrieve your earnings.
If you originate from outside the U.S., you will need to fill out a w8-BEN form instead.
This document essentially attests that you are not a U.S. resident and hence are not obligated to remit taxes to the IRS.
1099 NEC – Nonemployee Compensation
In contrast to the W-9, the 1099 NEC is not a form you have to complete. It serves as a document that OnlyFans will post to you at the address specified in your W-9.
The Onlyfans 1099 form informs you precisely how much revenue you generated on the platform throughout the entire year. This figure represents your total business income.
OnlyFans will forward you a 1099 NEC solely if you exceed $600 over the year and are a U.S. resident.
- If your earnings are below $600, OnlyFans will not dispatch a 1099 form to you. Nevertheless, you are still required to disclose whatever amount you earned to the IRS on your annual income tax return.
- If you are not a U.S. resident, you will not receive an OnlyFans 1099 form. It is particularly vital for you to maintain your records, invoices, and receipts meticulously. Ensuring your documentation is in order will spare you numerous complications when it comes to paying taxes.
Finally, when does OnlyFans distribute tax forms?
If you qualify for a 1099 NEC, you should obtain it in your mailbox by January 31st. Additionally, you will gain access to a digital copy of the form on OnlyFans.
1040 Schedule C
Given that you operate a small business, you must submit a Schedule C alongside your standard 1040 tax return.
You will document the total business income (as indicated on your 1099) and any business expenses on this form.
The residual amount represents your net income — essentially, your profit. This amount is the sum on which you will be accountable for income tax and self-employment tax.
In a moment, I will delve into the various Onlyfans tax deductions you should utilize to prevent overpaying taxes.
1040 Schedule SE
After determining your net income on your Schedule C, you will complete Schedule SE.
Schedule SE is where you will compute the self-employment tax you owe based on your net income.
Which Tax Deductions are Accessible to You as an OnlyFans Creator?
Now, onto the segment you have likely been awaiting eagerly, tax deductions. The greater the deductions you can claim as business expenses, the lower the total tax bill you will face.
Nevertheless, there is an important point to note before we proceed.
Onlyfans tax deductions are exclusively open to business proprietors, not hobbyists. The differentiation between a business and a hobby can be quite subjective.
There exist some official guidelines to aid you in determining your status.
If you are not endeavoring to derive a profit from your endeavors on OnlyFans, the IRS will not categorize you as a business owner.
This article disseminated by the IRS delves further into this matter.
It is imperative to note that earning from OnlyFans as a pastime does not exempt you from taxes entirely. While you will not be subject to self-employment tax, you will still be liable for income tax.
Returning to the focal point: What business expenditures can you potentially claim as deductions?
- Gear procured or leased for shooting, recording, filming, editing, and processing (Cameras, mobile devices, PCs, sound gear, props, and other necessary items to produce high-quality content for your OnlyFans venture.
- Wireless connectivity and data consumption. Given that your OnlyFans business functions entirely on the web, internet access is crucial. Let’s imagine you allocate 30% of your online time to managing your OnlyFans. Consequently, you can claim 30% of your internet expenses as a business deduction.
- Journey expenses. Whether it involves traveling to seal a lucrative deal or capturing content at a specific location requested by a top-paying customer, you can potentially deduct your fuel outlays as business costs in these scenarios.
- OnlyFans’ service fees and transaction charges. This is straightforward: you can categorize these costs as tax-deductible for your OnlyFans activities.
- Apparel. Specifically, personalized attire you purchase to fulfill subscriber demands. Conversely, everyday outfits won’t qualify for write-offs.
- Outfits for dressing up, if it’s content you exhibit on your OnlyFans platform.
- Promotional tools that aid in subscriber attraction. Social Rise is an exemplar in this regard. It enables numerous creators to boost their Reddit followers in less time. Plus, since it’s deductible, it’s nearly “cost-free”. Enroll now to experience all the time-saving perks yourself.
No credit card requiredLog in using RedditPost content in minutes
- Rental fees. If you are renting a space to shoot your OnlyFans content, you might be eligible to deduct a portion of the rent.
- Makeup and skincare supplies used exclusively for your OnlyFans content. This makeup should be separate from your regular cosmetics collection.
- Fees and salaries. You might engage a professional photographer or video editor to enhance your content quality. By doing so, you can treat their wages as a business cost.
You grasp the essence. If an expense is incurred solely to enhance your business’s present operations or future growth, and offers minimal to no personal benefit, it is likely deductible.
For an expense to be eligible for deduction, it must be normal in your profession and essential for your business. The IRS offers detailed guidance on what is considered acceptable.
Be sure to review this document prior to submitting your Schedule C. It will aid in better understanding the deductions available to you.
Maintain records of your OnlyFans-related invoices and receipts, digitally or physically, to provide solid proof for your deductions.
Although unlikely, the IRS may question the validity of your expenses.
It is recommended to establish a distinct bank account for your OnlyFans-generated income and costs.
By doing so, the variance between your bank balance and total earnings will reflect your business expenditures.
Remember, this presupposes no transactions unrelated to OnlyFans are conducted.
When should I settle my Onlyfans taxes?
In the U.S., you must remit OnlyFans taxes quarterly (four times each year) if you anticipate paying over $1000 in taxes annually. This constitutes an approximated tax.
Delaying payment till the year-end will result in interest charges for non-timely settlements. Additional fines could also be imposed.
Though making four payments seems slightly bothersome, the advantage is that these smaller payments are more manageable than one lump sum at the end of the year.
Moreover, the IRS provides a 10% margin of error when estimating the owed amount. Hence, minor discrepancies won’t lead to penalties.
The deadlines for quarterly payments are:
- April 15th
- June 15th
- September 15th
- January 15th (following year)
To calculate your estimated tax, you need to utilize Form 1040 ES.
To make payments, mail the form along with a check for the due amount to the allocated mailing address.
Alternatively, you can pay online.
Frequently Asked Questions about OnlyFans taxes
Do I need to complete an OnlyFans W2 form?
If you are not an OnlyFans employee, you won’t receive a W-2 form. As an independent creator on the platform, you must fill out a W-9 OnlyFans tax form before withdrawing any earnings.
What is the tax rate on OnlyFans earnings?
Your earnings from OnlyFans are subject to income tax and self-employment tax.
In the U.S., self-employment tax includes Social Security tax (12.4%) and medicare tax (2.9%), totaling 15.3%. Income tax rates vary based on your earnings.
What does the OnlyFans tax form look like?
The tax form sent by OnlyFans is a regular 1099 NEC (Nonemployee Compensation) form. You can access a copy of it and other necessary forms in this article or on the IRS website.
Does OnlyFans deduct taxes from my earnings?
If you’ve previously held a standard job, you might be accustomed to tax deductions from your salary.
However, it’s important to note that OnlyFans is not your employer. They do not withhold taxes from your earnings.
You act as an independent contractor – a small entrepreneur collaborating with a larger corporation. After deducting their 20% share, OnlyFans will transfer your earnings. You are responsible for paying taxes on the remaining 80%.
Will OnlyFans be reported on my tax return?
If your earnings exceed $600 within a year, OnlyFans will send you a 1099 NEC. This document originates from “Fenix International Limited,” the parent company of OnlyFans. As a result, the connection is not immediately obvious, but the dots can easily be connected.
If someone else prepares your taxes and you fear they might discover this information, now is an appropriate time to consider self-preparing your taxes.
Conclusion: Filing Taxes for OnlyFans
Being an OnlyFans creator entails various responsibilities, and handling taxes is a mandatory one. If you opt to manage this task yourself, you now possess a comprehensive understanding of how to handle taxes for OnlyFans. In summary:
- You serve as the proprietor of your own business.You’re a freelancer.
- Your OnlyFans revenue is subject to income tax and self-employment levy.
- You must complete the OnlyFans W9 document before you can withdraw earnings.
- You shall get an Onlyfans 1099 document in January through mail and a digital version on the platform.
- You will submit a Schedule C and a Schedule SE with your 1040 income tax filing.
- You can deduct business-related costs to decrease your taxable revenue.
- If you anticipate owing over $1000 in OnlyFans taxes, you should make quarterly payments.
REFERENCES:
These data were collected from various origins worldwide, covering these nations:
Afghanistan, Albania, Algeria, American Samoa, Andorra, Angola, Anguilla, Antarctica, Antigua and Barbuda, Argentina, Armenia, Aruba, Australia, Austria, Azerbaijan.
Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Benin, Bermuda, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Bouvet Island, Brazil, British Indian Ocean Territory, Brunei Darussalam, Bulgaria, Burkina Faso, Burundi.
Cambodia, Cameroon, Canada, Cape Verde, Cayman Islands, Central African Republic, Chad, Chile, China, Christmas Island, Cocos (Keeling Islands), Colombia, Comoros, Congo, Cook Islands, Costa Rica, Cote D’Ivoire (Ivory Coast), Croatia (Hrvatska), Cuba, Cyprus, Czech Republic.
Denmark, Djibouti, Dominica, Dominican Republic, East Timor, Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea, Estonia, Ethiopia, Falkland Islands (Malvinas), Faroe Islands, Fiji, Finland, France, Metropolitan, French Guiana, French Polynesia, French Southern Territories.
Gabon, Gambia, Georgia, Germany, Ghana, Gibraltar, Greece, Greenland, Grenada, Guadeloupe, Guam, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Heard and McDonald Islands, Honduras, Hong Kong, Hungary, Iceland, India, Indonesia, Iran, Iraq, Ireland, Israel, Italy.
Jamaica, Japan, Jordan, Kazakhstan, Kenya, Kiribati, North Korea, South Korea, Kuwait, Kyrgyzstan, Laos, Latvia, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Lithuania, Luxembourg.
Macau, Macedonia, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Marshall Islands, Martinique, Mauritania, Mauritius, Mayotte, Mexico, Micronesia, Moldova, Monaco, Mongolia, Montserrat, Morocco, Mozambique, Myanmar.
Namibia, Nauru, Nepal, Netherlands, Netherlands Antilles, New Caledonia, New Zealand (NZ), Nicaragua, Niger, Nigeria, Niue, Norfolk Island, Northern Mariana Islands, Norway.
Oman, Pakistan, Palau, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Pitcairn, Poland, Portugal, Puerto Rico, Qatar, Reunion, Romania, Russia, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and The Grenadines, Samoa, San Marino, Sao Tome and Principe.
Saudi Arabia, Senegal, Serbia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, Somalia, South Africa, South Georgia and South Sandwich Islands, Spain, Sri Lanka, St. Helena, St. Pierre and Miquelon, Sudan, Suriname, Svalbard and Jan Mayen Islands, Swaziland, Sweden, Switzerland, Syria.
Taiwan, Tajikistan, Tanzania, Thailand, Togo, Tokelau, Tonga, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Turks and Caicos Islands, Tuvalu, Uganda, Ukraine, United Arab Emirates (UAE), UK (United Kingdom), USA (United States of America, U.S.), US Minor Outlying Islands.
Uruguay, Uzbekistan, Vanuatu, Vatican City State (Holy See), Venezuela, Vietnam, Virgin Islands (British), Virgin Islands (US), Wallis and Futuna Islands, Western Sahara, Yemen, Yugoslavia, Zaire, Zambia, Zimbabwe.
Everything to Know About OnlyFans Taxes (Including Forms)
