OnlyFans Taxes – Everything You Must Know (Forms Too!)
Is it compulsory to give tax on your earnings from OnlyFans?
Most of the time, yes.
Your income on OnlyFans is subject to taxation under income tax as well as self-employment tax. This covers funds you receive through subscriptions, gratuities, contributions, PPV (pay-per-view) content, and other channels of income accessible on the platform.
Just like a regular 9-5 job, your OnlyFans earnings are liable to income tax. The higher your earnings, the greater the taxes due. Apart from income tax, you must also handle self-employment tax. This is a fixed proportion of your income.
There exists a specific income threshold you need to exceed before being liable for taxes. This threshold varies mainly by your country of residence.
In several countries, even if you do not earn enough to owe taxes, you still need to declare the income you generated.
It may sound like a hassle, I understand. This post will offer you a clearer insight into your tax obligations and how you can meet them.
What exactly is Self-employment tax?
The fundamental concept to comprehend prior to reporting OnlyFans taxes as a creator is that you are not an employee of the platform.
You are managing your own small enterprise, and you are the individual owner. Your association with OnlyFans is that of a freelance contractor.
You are viewed as self-employed according to the legislation. Consequently, you are mandated to submit self-employment tax besides income tax.
In the U.S., self-employment tax comprises Social Security tax (12.4%) and Medicare tax (2.9%), totaling 15.3%. This equals the FICA tax withheld from the payslips of employees on salary.
Self-employment tax is the method through which business proprietors and freelance contractors remit FICA tax.
Which forms should you be knowledgeable about?
Below are the tax forms you will encounter when filing your OnlyFans taxes in sequence:
W-9 – Application for Taxpayer Identification Number and Certification
The IRS mandates OnlyFans to have your tax details on record.
OnlyFans does not automatically deduct taxes from your earnings. They transfer to you the total sum you earn (after their 20% share).
They require your tax details to inform the IRS that you will be settling taxes for the funds they transfer to you.
When you attempt to withdraw your earnings for the first time on OnlyFans, you will be asked to complete a w9 form.
Taxes on OnlyFans – the OnlyFans W9 tax formInstructions for Completing W9 for OnlyFans
The form may seem daunting, particularly if it is your initial experience with taxes. Here are some step-by-step directives to aid you in filling it out.
- Line 1: Your complete name.
- Line 2: You can leave this section blank unless you own a DBA “doing business as” name or an LLC.
- Line 3: Tick the first box, “Individual/sole proprietor or single-member LLC.”
- Line 4: Keep this space empty.
- Line 5 and 6: Your mailing address.
- Line 7: Leave this area blank.
- Part 1: Input your SSN (social security number).
- Part 2: Append your signature and the date on the form.
Only post filling out the OnlyFans W9 form are you permitted to withdraw your earnings.
If you are from outside the U.S., you will have to fill out a w8-BEN form instead.
This form essentially confirms 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 are required to complete. It is merely a document that OnlyFans will dispatch to you at the address you specify in your W-9.
The Onlyfans 1099 form specifies the exact amount you earned on the platform throughout the entire year. This sum represents your gross business income.
OnlyFans will dispatch a 1099 NEC solely if you gross more than $600 throughout the year and are a U.S. resident.
- If you earn less than $600, OnlyFans will not forward you a 1099 form. Nevertheless, you are still required to declare whatever sum 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 even more crucial for you to retain your documents, invoices, and receipts. Organizing your records in a systematic manner will save you numerous troubles when it is time to settle your dues.
Lastly, when does OnlyFans issue tax forms?
If you meet the criteria for a 1099 NEC, you should receive one in your mailbox by January 31st. You will also be able to access a digital version of the form on OnlyFans.
1040 Schedule C
Given that you are a small business proprietor, you must submit a Schedule C alongside your regular 1040 tax return.
You will report the gross business income (specified on your 1099) and any business disbursements on this form.
The residual amount represents your net income – essentially, your profit. This is the sum on which you will owe income tax and self-employment tax.
In a while, I will discuss the different Onlyfans tax deductions you should make use of to prevent overpaying taxes.
1040 Schedule SE
Once you determine your net income on your Schedule C, you will complete Schedule SE.
Filing taxes for OnlyFans – Calculate your OnlyFans taxes on the Schedule SESchedule SE is where you compute the self-employment tax you owe based on your net income.
Which tax deductions can you benefit from as an OnlyFans creator?
Now, onto the part you have likely been waiting for, tax write-offs. The more business expenses you can subtract, the lesser overall tax amount you will be required to pay.
However – prior to proceeding, there is a notable point to be aware of.
Onlyfans tax deductions are solely accessible to enterprise proprietors, not hobbyists. The difference between a business and a hobby can be kind of subjective.
There are some official criteria available to assist you in determining your category.
The IRS will not classify you as a business owner if you do not endeavor to make a profit from your activities on OnlyFans.
This IRS-released article delves deeper into this matter.
Note that earning from OnlyFans as a pastime does not exempt you from paying taxes entirely. You will not have to remit self-employment tax but will still surrender income tax.
Shifting back to the subject: What business costs could you potentially deduct?
- Tools bought or leased for shooting, recording, filming, editing, and processing (Cameras,cell phones, PCs, audio gear, accessories, etc.). These are all elements crucial to produce high-quality content for your OnlyFans enterprise.
- Wireless internet signal and data consumption. Given that your OnlyFans business operates entirely online, you need to utilize the web to manage it. Assume that you dedicate 30% of your airtime to working on your OnlyFans. You will be eligible to deduct 30% of your internet bills as a business expenditure.
- Journey expenditures. Moving to conclude a lucrative business prospect, for instance. Or to film content at a specific spot as requested by a top-paying customer. In both scenarios, you could subtract your fuel expenses as a business cost.
- OnlyFans’ network and transaction charges. This one is obvious; you can easily view this as an OnlyFans levy write-off.
- Apparel. More exactly, bespoke clothing that you need to buy to fulfill subscriber demands. Conversely, you won’t be allowed to deduct the casual attire you purchase for daily use.
- Outfits for role-playing outfits, if it’s something you present on your OnlyFans.
- Instruments for marketing that assist you in drawing subscribers. Social Rise is a fine example of this. It helps numerous creators gain more followers on Reddit in less duration. And as you can deduct it, it’s essentially “free”. Register now to experience all the time-saving perks on your own.
No credit card requiredLog in with RedditPost in minutes
- Lease. If you’re leasing a space to film your OnlyFans content, you might be eligible to deduct a part of the rent.
- Make-up and beauty supplies you use exclusively for your OnlyFans content. This makeup must be distinct from your regular makeup collection.
- Allowances and salaries. You might engage a professional photographer or video editor to produce superior content. If you do, you can deduct their earnings as a business expenditure.
You comprehend the notion. If it’s an expense you incur purely to improve your business’s current functioning or future expansion – and it offers minimal to no value to you in your personal life – you will probably be able to deduct it.
For an expense to be deductible, it must be both customary in your line of work and indispensable for your business. The IRS possesses some quite in-depth criteria on what will and won’t be accepted.
You should peruse this document prior to submitting your Schedule C. It will help you comprehend the deductions accessible to you.
It aids to have your OnlyFans-related invoices and receipts accessible, digitally or physically, so that your deductions are supported by solid proof.
It’s improbable, but the IRS could question the legitimacy of your expenses.
It’s also advantageous to establish a distinct bank account for your OnlyFans-related income and expenses.
In this manner, the variance between your bank balance and gross income will signify your business expenses.
Bear in mind that this presumes no bank transactions or withdrawals unrelated to OnlyFans are executed.
When must I settle my Onlyfans taxes?
In the U.S., you must settle OnlyFans taxes quarterly (four times per year) if you anticipate owing more than $1000 in tax over the year. This is an approximated tax.
If you procrastinate and pay annually, you will incur interest for tardiness. You may also face additional monetary fines on top of that.
kind of a hassle. Nevertheless, the benefit is that paying in four smaller installments is reasonably manageable. Forking over one enormous sum at the conclusion of the year – not so much.
Moreover, given that you will be making an estimate of what you owe, the IRS provides a 10% margin of error. Hence, you won’t be penalized if you are slightly off.
The deadlines for the four quarterly payments are as follows:
- April 15th
- June 15th
- September 15th
- January 15th (the next year)
Form 1040 ES.
specified mailing address.
<pAlternatively, you can pay online.
Frequently Asked Questions about OnlyFans taxes
Must I complete an OnlyFans W2 form?
How much levies do you settle on OnlyFans?
What appearance does the OnlyFans levy form have?
Does OnlyFans withhold levies from my earnings?
<pNonetheless, you should comprehend that OnlyFans is not your employer. They are unable to retain taxes from your earnings.
Will OnlyFans manifest on my taxes?
<pThus, it won’t be immediately noticeable, though it doesn’t require much effort to make the connection.
Conclusion: How to file taxes for OnlyFans
- You are the exclusive owner of your own enterprise. You are self-employed.
- Your OnlyFans revenue is susceptible to income tax and self-employment tax.
- It is necessary to complete the OnlyFans W9 form prior to being able to withdraw earnings.
- By January, you will receive an OnlyFans 1099 form via post and a digital version on the platform.
- You will submit a Schedule C and a Schedule SE alongside your 1040 income tax return.
- You have the option to deduct business-related expenses to decrease your taxable income.
- If you anticipate owing over $1000 in OnlyFans taxes, it is advisable to make quarterly payments.
REFERENCES:
These figures were sourced from different locations worldwide, including 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.
OnlyFans Taxes – All You Should Understand (Forms As Well!)