I have seen this question on Quora where a model asked: How do you file income taxes when you are an adult content creator? so we thought why not write an article explaining Tax for Adult creators and how they can effectively file their income taxes on their Flirtback earnings? Confused about filling or paying taxes as an adult model, we discussed this topic at great length in this article.
Don’t worry, it’s not tax time again! Not yet, anyway–although that does depend on when you’re reading this. It’s important to consider taxes throughout the year, especially when you’re considering making purchases or incurring expenses related to your work as an adult content creator.
A lot of myths and misunderstandings exist about paying taxes as an adult creator especially related to write-offs.
Many creators justify spending money on their camming business with the vague–and often second-hand–knowledge that somehow tax write-offs will make the expense worthwhile. Before you splash out on a pricey new DSLR camera for your fetish clips in the expectation that you’ll get the money back when you do your taxes, though, it’s important to understand what, exactly, a write-off is, and how it affects your taxes. Tax law varies by country, state/province, and many other factors, so this article is only a very general overview.
What is a write-off in Taxes?
A write-off is defined as a reduction in the recognized value of something. A write-off is an expense that reduces your taxable income when it comes to taxes. Write-offs can include goods and services you purchase for your work as an adult model, but can also include medical or education expenses.
What expenses qualify as a legitimate write-off, and what proportion of the cost can be claimed, vary not just by where you live and work, but by what category the expense falls under. For example, my home office takes up 20% of the total square footage of my apartment, so I am able to write off 20% of my rent, electricity, and internet for business purposes. On the other hand, I can write off 100% of the $100 cost of my new webcam.
How can you use write-offs to your advantage?
If your taxable income is slightly above the cut-off for a higher tax bracket, a few write-offs can reduce your taxable income enough to put you in the lower tax bracket. This can have a fairly large impact on your tax burden but it’s hard to plan in advance unless you (or your accountant) are staying on top of your income and expenses throughout the year. Some write-offs, like contributions to registered retirement accounts or donations to charity, can be done early in the following year to reduce your taxable income for the year prior. Anything that reduces your taxable income is always a help, but it’s not always a good idea to make big purchases with the goal of writing them off come tax time.
When are write-offs a bad idea?
If you can’t afford to spend the money! You don’t get a discount on your taxes equivalent to the purchase price of the item or service, so if you can’t afford it out of pocket, your taxes won’t fix that. For example, buying that new webcam for $100 reduces my taxable income by $100. If I am in a tax bracket of 25%, that reduces the tax I pay by just $25, bringing the net cost of the webcam to $75. This is extremely simplified but shows that justifying an item’s cost as a write-off doesn’t actually account for the full cost.
Write-offs should be treated as a nice bonus to the required expenses of running a business, and not as an excuse to spend money you don’t have.
Do you need an accountant to Pay Taxes as an Adult Content Creator?
Probably! Taxes are complicated at the best of times, but when it comes to self-employment and/or a small business, it quickly turns into a real challenge.
If you keep your records of income and expenses in fairly good order, hiring an accountant to prepare your taxes isn’t as expensive as you’d imagine.
Not only are accountants experts in your local tax regulations, but they can help spot write-offs and other tax benefits you may have missed. If you’re worried about disclosing your occupation to a stranger, consider looking online for an accountant who specializes in the adult industry.
If you are in the US, there are several to choose from! For those of us in other countries, I recommend phoning around to find an accountant who is comfortable with this line of work.
I had to phone a few before I found an accountant who handles the taxes of several strippers and online sex workers, so not only is she comfortable dealing with expenses like sex toys and HD webcams, but I don’t have to feel uncomfortable explaining what I bought!
It is for informational purposes only, and may no longer be correct at the time of reading. Tax laws vary by location, business type, employment circumstances, and family situation. Please see a certified financial professional for personalized information relevant to your situation.
