There’s an old saying that says, “The only things certain in life are death and taxes.” This is a very accurate statement, and anyone who works or runs a business will have to deal with taxes.
As an online model and/or content creator, most if not all webcam sites will consider you an independent contractor. This means these sites will not be withholding any taxes from your earnings. It will be your responsibility to pay all federal and/or state taxes on your earned income. To save yourself from being in a position of owing money at the end of the year to the IRS and/or whatever state you live in, it would be wise to set aside 20 to 30 percent of any earnings you receive throughout the year.
Most people file and pay taxes based on a calendar year which runs from January 1 through December 31. In the United States, the tax filing deadline is April 15 for the year ending the previous December 31.
The following tips should help alleviate some of the stress for the upcoming tax filing season.
Tip 1: Hire a Professional
While it is not mandatory to hire a tax professional, taxes can be very complicated. It may be in your best interest to find a tax professional who is familiar with self-employed individuals, especially someone who is familiar with filing taxes for people in the adult industry.
Schedule an appointment as far in advance from April 15 as possible. This will give you and your tax professional plenty of time to prepare your taxes.
Tip 2: Save all your Receipts
If you buy anything relating to your webcam business, save those receipts. There are many items that can be considered a business expense when you work as a webcam model or content creator.
Here is a partial list of potential business expenses:
— Video equipment
— Lighting equipment
— Theatrical make-up
— Internet provider service (the portion used strictly for your webcam business)
— Cellphone monthly cost (for the portion specifically used for your business). If you have a dedicated cellphone for webcam modeling business, then the entire monthly amount could be deductible.
— Fees paid to sites to host your adult content
— If you use a room in your home or apartment strictly for your webcam business, the portion of rent or mortgage payment for that room can be deducted as a business expense.
For example: If you have a dedicated bedroom just for your webcam business and it measures 10’ x 10’ (100 square feet) and your home measures 1500 sq ft, this means that approximately 7% (100/1500=105 sq feet) of your home is used specifically for your business. In this case you should be able to write off 7% of many home expenses as business expenditures, including 7% of the electricity bill, 7% of the mortgage bill, 7% of the gas/heating bill,and so on.
Tip 3: Get Organized
Gather all your expenses and receipts sooner rather than later. This will save you a big headache at tax time. If you hire a tax preparer, most will not want you to send them all your tax documents. Instead, they will ask for your “totals” regarding different expenditures. (They will provide a list of information for you to provide).
Being organized will help you save time — and your sanity!
Author’s Note: This material has been prepared for informational purposes only. It is not intended to provide and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors for professional advice.
Gabriella Vita is from Las Vegas, NV and has been writing for over ten years under multiple pen names. She believes variety is the spice of life, which is why she enjoys writing on a plethora of subjects. Email her at firstname.lastname@example.org.
Background header image via Unsplash here.