OnlyFans is a premium adult entertainment service that allows models to upload photos and videos of themselves performing a wide range of activities and shows.
Models pay a subscription fee to access the site and receive payments through PayPal or Stripe.
Many performers and models find themselves overwhelmed and confused when it comes to the tax requirements associated with the site – and so we have put together everything you need to know.
What Is OnlyFans?
OnlyFans is an online platform where models (see also: Are There More Male Or Female Cam Models On Onlyfans? [Facts & Figures])can create their own profiles, post content, and make money from adverts on their pages.
The site was founded by Timothy Stokley in 2016, and the company has grown rapidly since its launch, now boasting more than 1 million members worldwide.
It’s estimated that there are over a million creators registered with the site, and new accounts are set up every day.
How Does OnlyFans Work?
An OnlyFans creator is someone who creates a profile on the site. They’re not necessarily models, although they may work as one. A creator can use the site to promote their unique brand, sell products, or even offer paid services.
OnlyFans allows creators to set their preferred prices, and they can decide how much they want to charge for their service.
Models who join the site must first sign up for an account. They then choose a username and password before being able to start uploading content.
Once they’ve uploaded some images, they’ll be asked to fill out a questionnaire about their interests and preferences. This information will help advertisers target them with relevant ads.
The model can also set up a profile page, which includes a biography, pictures, and video clips. These can all be edited at any time, depending on changes to the creator’s desires and business offerings.
The site offers two different payment options: PayPal (see also: Can You Use PayPal On OnlyFans?)and Stripe. Both allow users to send money directly to other people’s bank accounts. PayPal is available to anyone in the US, UK, Australia, Canada, and New Zealand, while Stripe is only available to those based in the US.
There are no fees involved in using either option, but both require a credit card number to be stored. Users can cancel their subscriptions at any time without charge.
How Do Creators Make Money On OnlyFans?
As mentioned above, OnlyFans allows models to set their own prices for their services. Some creators may charge nothing, while others may ask for thousands of dollars per image. Fans can also pay “subscriptions” to the creator – these are similar to Patreon donations.
If a fan pays a subscription, they receive access to exclusive content from the creator. For instance, they might get to see behind-the-scenes videos, early access to new releases, and more.
Some creators have additional perks for fans willing to pay extra. For example, there are premium memberships available, which include things like private messaging, custom shows and videos, and more.
It should be noted that there are minimum and maximum limits for the amount that creators can charge for subscriptions; these sit at $4.99 per month for the minimum cost, and $49.99 per month for the maximum cost.
Are There Any Tax Implications?
Content creators on OnlyFans are considered to be self-employed for tax purposes, and this means that they will need to take responsibility for their own earnings and tax arrangements.
In the United States, self-employed workers are required to file quarterly taxes through Form 1040, Schedule C. The IRS has specific rules regarding what constitutes income earned by a self-employed person, so it’s important to check with your accountant if you’re unsure.
Creators will also need to ensure that they keep records of their earnings, as well as receipts for expenses incurred.
If you meet certain criteria, you will receive a 1099 information return from a third-party payment processor, or directly from OnlyFans. These criteria include:
- You have an account with OnlyFans and are paid using their platform
- You are paid more than $600 by a business using their platform – in this case, OnlyFans
In some cases, you may reach this earning threshold on a platform other than OnlyFans; if this is the case, you will still need to report the earnings to the IRS, and this will be your responsibility.
If you meet the requirements on OnlyFans, you will be able to access and download a 1099 tax form from your OnlyFans account.
In addition, if you decide to accept payments outside the platform using PayPal as the preferred payment method, you will receive a 1099-K if you have processed a minimum of $20,000 in payments, and at least 200 transactions in the previous tax year.
What Happens If I Fail To Report My Income?
The IRS requires all US citizens and residents to file a federal income tax return each year. Failure to do so could result in fines and penalties.
There are two exceptions to this rule:
- If you qualify as a nonresident alien (for example, if you live abroad), then you don’t need to file a return.
- If you earn less than $10,200 in a calendar year, then you won’t owe any income tax. This includes earnings from only one job, even if you work multiple jobs.
How Can I Keep Track Of My Earnings?
As mentioned above, you will need to keep track of your earnings yourself. It’s recommended that you create a spreadsheet or document that lists your earnings, including the date, time, and amount received.
You’ll also want to note down any expenses incurred, such as travel costs, production fees, and more.
This will ensure that you have all of the figures you need at your disposal and help you prepare your tax returns with minimal stress and anxiety.
OnlyFans offers a unique opportunity for content creators to monetize a range of services – but it is important to understand the financial implications of doing so before signing up for the service.
It’s not uncommon for people to underestimate the amount of money they make online, but this can lead to serious problems when it comes to paying taxes, so make sure that you understand the responsibilities and obligations you must meet.