Sole proprietor vs s corp

[Camvet]

Hi yall!
If anybody has any advice or good insight, I would so appreciate it. I’ve been a cam model for almost 10 years and I’ve been a sole proprietor mainly because I was working for studio, but I finally got out of that and now I cam for strip chat and soon will have my stream account back and won’t be streaming for any meet recently met with professional and they had recommended an S Corp… because every year I dread taxes as a sole proprietor, but at the same time I have so much that I write off that a corp seems like I might be spending more money than I would doing all my write off as a sole proprietor and really stressful. I make decent money. I would say only fans stream mate and strip chat around 75K to 85k I just don’t know if I make enough money for an S Corp. to be worth it or if I should just keep being a sole proprietor and writing off a fuck ton… I’m really struggling with this decision. Does anybody have any advice? Tysm

 

[Vixxen81]

I'm not sure who is giving you financial advice but an S Corp requires basically a board of directors, shareholders, corporate bylaws and director meetings. Unless you are employing other people in your business, there's no reason to be LLC. I don't know why you didn't stay independent as a contractor because that has the most wiggle room of all.

 

[Camvet]

I'm not sure who is giving you financial advice but an S Corp requires basically a board of directors, shareholders, corporate bylaws and director meetings. Unless you are employing other people in your business, there's no reason to be LLC. I don't know why you didn't stay independent as a contractor because that has the most wiggle room of all.

The person giving me financial advice is a cpa or accountant.
Not sure if it changes anything but I am in Arizona. From my understanding that’s what’s required of a C Corp?

Also, I am still am independent contractor or another term for that is a sole proprietor.
Or maybe I’m confused lmao but I file as self employed still.
I’m not an LLC.
And ah gotcha, can I ask.. when you say “most wiggle room” what do you mean? Thank you.

 

[Vixxen81]

The person giving me financial advice is a cpa or accountant.
Not sure if it changes anything but I am in Arizona. From my understanding that’s what’s required of a C Corp?

Also, I am still am independent contractor or another term for that is a sole proprietor.
Or maybe I’m confused lmao but I file as self employed still.
I’m not an LLC.
And ah gotcha, can I ask.. when you say “most wiggle room” what do you mean? Thank you.

The difference between the two designations is how they earn income: Independent contractors do specific tasks for clients for a set fee. Sole proprietors may do contract work, but may also have other revenue streams, like selling their own products to customers.

There is no reason for you to be an S Corp and I'd fire whoever told you that. There's also zero reason to be LLC unless you employ other people, as in pay them from the income generated in your streams/content. Basically an LLC protects you from someone suing you because their information was leaked or sought after or they incurred bad press from being involved with you.

 

[Miss_Lollipop]

Hi yall!
If anybody has any advice or good insight, I would so appreciate it. I’ve been a cam model for almost 10 years and I’ve been a sole proprietor mainly because I was working for studio, but I finally got out of that and now I cam for strip chat and soon will have my stream account back and won’t be streaming for any meet recently met with professional and they had recommended an S Corp… because every year I dread taxes as a sole proprietor, but at the same time I have so much that I write off that a corp seems like I might be spending more money than I would doing all my write off as a sole proprietor and really stressful. I make decent money. I would say only fans stream mate and strip chat around 75K to 85k I just don’t know if I make enough money for an S Corp. to be worth it or if I should just keep being a sole proprietor and writing off a fuck ton… I’m really struggling with this decision. Does anybody have any advice? Tysm

75-80k is about the mark where it typically starts to become worth while. It's a lot more bookeeping to keep track of. It will depend on your specific tax situation though so you'll want to talk to an accountant. You're right on the cusp unfortunately

 

[Vixxen81]

Compare Business Structures - LLC vs. Corporation, S Corporation and C Corporation | LegalZoom

Learn about LLC, Sole Proprietorship, S corporation, C corporation, Nonprofit, and more. Compare different business types and decide which one is right for you today.

www.legalzoom.com

 

[Camvet]

Oh my gosh….. that’s wild…
So, again just so I understand, currently I file and have been for 8 years on turbo tax as self employed.. as my income is from onlyfans, streammate, and stripchat with 1099s. Then just writing off all expenses relating to maintaining said business.
I don’t know if that makes me sole P, or independent contractor.
It is of course super anxiety inducing as that number is HIGH before you start writing things off
but, your advice is to stay doing that? As it has the most wiggle room overall?
Again thank you!

 

[Vixxen81]

Oh my gosh….. that’s wild…
So, again just so I understand, currently I file and have been for 8 years on turbo tax as self employed.. as my income is from onlyfans, streammate, and stripchat with 1099s. Then just writing off all expenses relating to maintaining said business.
I don’t know if that makes me sole P, or independent contractor.
It is of course super anxiety inducing as that number is HIGH before you start writing things off
but, your advice is to stay doing that? As it has the most wiggle room overall?
Again thank you!

Correct. What your CPA/accountant should have told you is that you should be making quarterly estimation payments to the IRS and at the end of the year you square up and whatever amount you paid over is given back to you in a refund.

 

[Miss_Lollipop]

Vixxen I was an LLC long before I employed anyone.

What I was told was that it would protect me in situations where I might be sued - like for example, if a client sued me (lets say I gave a sub a task on camera and he ended up hurt and went after me for damages or something), my landlords sued me, OR on work/camming related trips if something happened that could mean damages, also colabs with other models..etc.

I'm far from an expert on this but it sounded like a good idea to me.

Also when proving income for various apartment complexes they always asked for tax returns and the moment they saw LLC it went smoother. Same for buying a house and getting a house loan, the guy was like "oh thank god you're an LLC that's going to be very helpful"
ALSO in order to get a business bank account in the US which again helps with LLC's, business loans etc.

And finally, if I ever had enough of a copyright breech that I wanted to pursue someone legally, my lawyer told me it would be helpful to be an LLC for legal protections with court costs if I lost.

I dunno. I think LLC protection is worth doing.. in my non-very-expert opinion lol.

 

[Camvet]

Correct. What your CPA/accountant should have told you is that you should be making quarterly estimation payments to the IRS and at the end of the year you square up and whatever amount you paid over is given back to you in a refund.

Omg!! I was just saying this is what I wanted! Bc I always I wish they just took out taxes for us like w2 ppl. One more question you may not know?
Can I still set that up this year for next tax season?

 

[Camvet]

Correct. What your CPA/accountant should have told you is that you should be making quarterly estimation payments to the IRS and at the end of the year you square up and whatever amount you paid over is given back to you in a refund.

Omg!! I was just saying this is what I wanted! Bc I always I wish they just took out taxes for us like w2 ppl. One more question you may not know?
Can I still set that up this year for next tax se

 

[Vixxen81]

Vixxen I was an LLC long before I employed anyone.

What I was told was that it would protect me in situations where I might be sued - like for example, if a client sued me (lets say I gave a sub a task on camera and he ended up hurt and went after me for damages or something), my landlords sued me, OR on work/camming related trips if something happened that could mean damages, also colabs with other models..etc.

I'm far from an expert on this but it sounded like a good idea to me.

Also when proving income for various apartment complexes they always asked for tax returns and the moment they saw LLC it went smoother. Same for buying a house and getting a house loan, the guy was like "oh thank god you're an LLC that's going to be very helpful"
ALSO in order to get a business bank account in the US which again helps with LLC's, business loans etc.

And finally, if I ever had enough of a copyright breech that I wanted to pursue someone legally, my lawyer told me it would be helpful to be an LLC for legal protections with court costs if I lost.

I dunno. I think LLC protection is worth doing.. in my non-very-expert opinion lol.

For most people it isn't. I mentioned protection against suing in my comment.

 

[Vixxen81]

Omg!! I was just saying this is what I wanted! Bc I always I wish they just took out taxes for us like w2 ppl. One more question you may not know?
Can I still set that up this year for next tax se

The first quarter just passed, you can go to irs.gov and set it up. You'll still need to do all of the deductions come tax time but you'll most likely come out better in the end as far as what you owe/may be refunded. So it won't be this giant 10K bill due at the end of the year but maybe $100 or $200 or a refund if your deductions outweigh your tax responsibilities.

Edit to add: you do not want any adult service taking out taxes for you. That makes you an employee and that makes you governed by them in whatever way they see fit. Including but not limited to never allowing you to stream at all if they don't like you.

 

[Camvet]

Vixxen I was an LLC long before I employed anyone.

What I was told was that it would protect me in situations where I might be sued - like for example, if a client sued me (lets say I gave a sub a task on camera and he ended up hurt and went after me for damages or something), my landlords sued me, OR on work/camming related trips if something happened that could mean damages, also colabs with other models..etc.

I'm far from an expert on this but it sounded like a good idea to me.

Also when proving income for various apartment complexes they always asked for tax returns and the moment they saw LLC it went smoother. Same for buying a house and getting a house loan, the guy was like "oh thank god you're an LLC that's going to be very helpful"
ALSO in order to get a business bank account in the US which again helps with LLC's, business loans etc.

And finally, if I ever had enough of a copyright breech that I wanted to pursue someone legally, my lawyer told me it would be helpful to be an LLC for legal protections with court costs if I lost.

I dunno. I think LLC protection is worth doing.. in my non-very-expert opinion

The first quarter just passed, you can go to irs.gov and set it up. You'll still need to do all of the deductions come tax time but you'll most likely come out better in the end as far as what you owe/may be refunded. So it won't be this giant 10K bill due at the end of the year but maybe $100 or $200 or a refund if your deductions outweigh your tax responsibilities.

youre a saint!!! Thank you so much!!! I knew another can model would have the best advice most people don’t get it who aren’t in it

 

[Vixxen81]

youre a saint!!! Thank you so much!!! I knew another can model would have the best advice most people don’t get it who aren’t in it

If you want I can DM you the email address of a very reliable accountant who will help you with this. I trust him with my soul because he has many cam girl clients. I think you ran into a person who has no experience with this type of business specifically.

 

[Camvet]

If you want I can DM you the email address of a very reliable accountant who will help you with this. I trust him with my soul because he has many cam girl clients. I think you ran into a person who has no experience with this type of business specifically.

That would be fantastic, I am in AZ hopefully that doesn’t matter if you’re not or he isn’t? Haha

 

[Vixxen81]

That would be fantastic, I am in AZ hopefully that doesn’t matter if you’re not or he isn’t? Haha

No we're both US based. He has a license in all 50 states.

 

[Camvet]

No we're both US based. He has a license in all 50 states.

Perfectttttt. Then yes I would do appreciate it.
I’ve been SEARCHING For a cpa who works a ton with and knows his shit about cam models and taxes

 

[cbhours]

There is no reason for you to be an S Corp and I'd fire whoever told you that.

Its to lower self employment tax, its not bad advice depending on the amount they are earning.

 

[Vixxen81]

Its to lower self employment tax, its not bad advice depending on the amount they are earning.

Downsides of S corporations include:

• Higher taxes and legal costs
• More stringent requirements, including holding annual director and shareholder meetings, keeping corporate minutes, and allowing shareholders to vote on major decisions

 

[cbhours]

Downsides of S corporations include:

• Higher taxes and legal costs
• More stringent requirements, including holding annual director and shareholder meetings, keeping corporate minutes, and allowing shareholders to vote on major decisions

I don't know how they would end up paying more in taxes

The 1 person can be the director, shareholder, and employer of the S-corp.

 

[Vixxen81]

I don't know how they would end up paying more in taxes

The 1 person can be the director, shareholder, and employer of the S-corp.

I didn't write the rules.

 

[cbhours]

I didn't write the rules.

https://www.lawinc.com/corporation/overview/tax-savings-calculator this calculator will kind of give people an idea as to why some people go through all the trouble of doing the whole s-corp thing.

 

[Miss_Lollipop]

For most people it isn't. I mentioned protection against suing in my comment.

I won't argue but ... all those reasons I listed seem like ordinary reasons lots of people would want to consider an LLC.

Some other random thoughts:
LLC is different than the S corp thing tho - just to be clear to anyone reading.
I'm an LLC but not an S Corp, I'm right on the cusp of being able to save money with it. I'd save around 7-10k a year in taxes BUTTTT i'd spend about 3-4k in bookeeping cos I'm not doing all that. I also work in multiple states, which apparently means i'd have to pay taxes in those states. And my accountant said I'd have to give all models I hire W2's which.. feels INSANE.. and I'm confused how producers who I know are S Corps do business, I've never seen anyone show up to set and fill out a W2 lol.

Sorry half of that was me just expressing general confusion about the way the producers in the industry do business not a specific response to you vixxen lol


Side note: if anyone else is reading this and wanting a list of accountants to avoid:

DaisyDoesTaxes and TaxxxGuy have very bad reps for adult industry taxes. Like so terrible I feel fine saying it publically. Daisy has fucked over so many people and Taxxxguy just is terrible about responding in time, his office seems overwhelmed.

Other adult tax people I've dealt with: DiTa - overall GOOD experience... with some hiccups. Good with weird situations. CamgirlCPA - So far so good, he's my current guy. There's also TaxDomme I've had no dealings with but she's around.

 

[Vixxen81]

I won't argue but ... all those reasons I listed seem like ordinary reasons lots of people would want to consider an LLC.

Some other random thoughts:
LLC is different than the S corp thing tho - just to be clear to anyone reading.
I'm an LLC but not an S Corp, I'm right on the cusp of being able to save money with it. I'd save around 7-10k a year in taxes BUTTTT i'd spend about 3-4k in bookeeping cos I'm not doing all that. I also work in multiple states, which apparently means i'd have to pay taxes in those states. And my accountant said I'd have to give all models I hire W2's which.. feels INSANE.. and I'm confused how producers who I know are S Corps do business, I've never seen anyone show up to set and fill out a W2 lol.

Sorry half of that was me just expressing general confusion about the way the producers in the industry do business not a specific response to you vixxen lol


Side note: if anyone else is reading this and wanting a list of accountants to avoid:

DaisyDoesTaxes and TaxxxGuy have very bad reps for adult industry taxes. Like so terrible I feel fine saying it publically. Daisy has fucked over so many people and Taxxxguy just is terrible about responding in time, his office seems overwhelmed.

Other adult tax people I've dealt with: DiTa - overall GOOD experience... with some hiccups. Good with weird situations. CamgirlCPA - So far so good, he's my current guy. There's also TaxDomme I've had no dealings with but she's around.

I get it, it's very complicated. There are all kinds of scams and identity theft left and right...I understand why you did what you did and you have a very heavy repertoire of sub/dom content so it makes sense that you want any available protection, it's just not practical for those who aren't in that arena. I've never had a single problem with my bank, they are trying to sell me a house and it's all based on how transactions go in and out. I just think there needs to be a lot more consideration when switching between IC and LLC.

 

[AmberCutie]

Downsides of S corporations include:

• Higher taxes and legal costs
• More stringent requirements, including holding annual director and shareholder meetings, keeping corporate minutes, and allowing shareholders to vote on major decisions

Jawbs and I have been an S Corp for over a decade (we're both independent contractors). Never had an official meeting or kept minutes, etc.

But having a tax accountant handle the business tax filing is key, I think we'd be in over our head trying to file alone.

It's nice getting a standard paycheck from our corp every pay period lol also nice having a company credit card to purchase work stuff on.

edit: come to think of it, I actually file/pay the state quarterlies for our business