Natalie Star is one of the highest-profile cam stars on the net. The Fleshlight CamStar model has appeared in Playboy, and her insights and business savvy have been featured prominently across adult industry media. Star has also been recruiting and mentoring models since 2010 — and models who work with her are becoming some of today’s top earners. Natalie Star stopped by YNOT Cam to share some tips for career success.
The IRS is real.
Since its inception in the 1860s, the U.S. Internal Revenue Service has been accused of more than one indiscretion — everything from cultural discrimination to massive overreach — but few government agencies have as much discretionary power. The IRS can take funds directly from your bank account, and it’s the only organization that can demand payments on projected, theoretical amounts of income in advance of earnings. No joke.
Many high-profile people have been convicted of tax evasion — actively, willfully, and knowingly not paying their income tax — including people in various corners of the adult industry. “Hollywood Madam” Heidi Fleiss, Girls Gone Wild founder Joe Francis, and legendary porn star Janine Lindemulder (the nurse on the cover Blink-182’s Enema of the State, among many other things) all have served time in federal prison for tax-related indiscretions.
For traditional employees, employers are required to withhold taxes, shuttling these funds directly to the government on your behalf. Via a series of mental gymnastics, workers often pretend this portion of their paycheck isn’t even there — until some funds finally appear as a “bonus” tax return. But for contract employees, which is what the vast majority of webcam models are, there is no nanny employer withholding money and paying the feds. That’s your responsibility. Regardless how you feel about taxes, shirking that responsibility can result in big trouble.
Natalie Star knows about taxes and the IRS. Here, she gives some of her best tips for paying as painlessly as possible.
The 25-percent rule
An individual’s tax rate can vary a lot, and many factors can have an impact on how much you owe. Your actual income, as well as your write-offs and deductions (business expenses like a webcam or other equipment), can have a significant impact on your tax rate. Tax laws change constantly. You never know exactly where you’re going to land in terms of money owed.
“For many models, the money [they make] can be insane. This is the beauty of webcam,” Star explained. “However, the amount you owe in taxes at the end of the year can be even more insane.”
According to Star, it’s a good idea to save up for your tax bill. When saving, it’s a good idea to err on the side of caution. According to Star, a good rule of thumb is 25 percent.
“Be smart,” she said. “I tell my models to put away $250 for every $1,000 they earn. You’d be surprised how many models end up not putting away anything toward their taxes.”
Keep track of everything
If an expense is work-related, chances are you can write it off. A tax write-off is any legitimate expense that can be deducted from your taxable income. For example, if you made $1,000 one week and spent $100 on a new webcam, your taxable income for that week is only $900. (This is just illustrative. Tax write-offs are way more complicated than this example — but you get the idea.)
One way to make your write-offs simpler to determine is to keep detailed and organized records. Keep track of everything you make and everything you spend. If you cam from home, a portion of your home maintenance and utility bills become write-offs. For example, a portion of your electric bill and your internet service can be deducted if you cam from home. Always make sure to keep receipts.
Star helps her models get ready for tax season by going over records with them. “I spend hours and hours each year helping my models get ready for tax season, but it’s a labor of love,” she said. “I teach them to itemize everything from the square footage of their work space to how to break down the percent of their utility bills they can write off — all before sending them over to my CPA.”
A CPA — that’s important.
Hire a professional
For as much as any one average, or even experienced, person knows about taxes, nothing rivals a pro.
A certified public accountant (CPA) is a tax professional who’s passed the Uniform Certified Public Accountant Examination and met additional state-mandated education and experience requirements. A CPA can help make sure your tax return is in perfect order before you submit it to the IRS.
“So many models will tell you they do their own taxes or they have a friend who knows some guy ‘who saved them hella money on their taxes,’ etc.,” Star said, “but never let cheapness be your weakness.”
Put simply, don’t skimp when it comes to your finances.
“Big money deserves big attention,” Star said. “Having a professional CPA file your taxes on your behalf can make all the difference in the world in regards to the way the IRS looks at your return.”
According to Star, many models fail to realize fast money spends even faster.
“Before you know it, the year is over and it’s tax season,” she said. “And you’d better hope you have your funds in order. Actually, it’s not ‘hope’ — it’s discipline and strategy. But for as overwhelming as this may seem, it doesn’t have to be.”
Visit Natalie Star on Twitter at @NatalieStarLive.