Let’s talk TAXES

[Southernbarbii]

I’m genuinely curious how you guys itemize your tax deductions. For instance, it seems like services like hair, nails, plastic surgery, and anything to improve the appearance would count as a deduction because it helps us earn more in the industry… do you all itemize this?

Also, the “no tax on tips” act. How is this going to work and how do we file this, since our earnings are 100 percent tip based?!

Just looking for some advice, as currently I’m paying estimated taxes in excess of 10,000$ last year, which is a lot! Do you guys have a tax professional you could recommend? Any advice is appreciated so much!!!

 

[cbhours]

Unlikely, it would have to be business exclusive wouldnt it? So hair no, wig probably. Plastic surgery no, costume probably. Stuff you can say you use exclusively for business and nothing else.

You're in the usa? There will never be a time when uncle sam allows a self employed contractor to escape taxes.

10k so that's roughly what 50k a year as a self employed contractor? At the moment there isnt much worth doing aside from maybe a sep ira if you want to start a retirement but as your wages increase a little more (60k-70k) you may want to consider an s-corp. Edit: I mean LLC taxed as s-corp

 

[LaceyRoyce]

I’m genuinely curious how you guys itemize your tax deductions. For instance, it seems like services like hair, nails, plastic surgery, and anything to improve the appearance would count as a deduction because it helps us earn more in the industry… do you all itemize this?

Also, the “no tax on tips” act. How is this going to work and how do we file this, since our earnings are 100 percent tip based?!

Just looking for some advice, as currently I’m paying estimated taxes in excess of 10,000$ last year, which is a lot! Do you guys have a tax professional you could recommend? Any advice is appreciated so much!!!

Hair, nails and plastic surgery all typically fall under the “housewife” rule where if it’s something the average housewife might do for herself, we cannot deduct it for work. Same for the gym. There is one case many years ago if a woman who fought the IRA to deduct her breast implants and won but she only won because she was able to demonstrate that the implants measurably improved her income, we’re so INSANELY HUGE that no reasonable person would get them, and that she removed them as soon as she stopped stripping.

So I do not write off my regular nail appointments BUT i did write off the super long green press on nails that I wore for one custom video by request then removed.

You can write off a performance wig, a cosplay, etc BUT you can’t write off your regular hair appointments.

Our tips on cam sites are not considered “tips” by the IRS. You’re being paid as an independent contractor by a company. So it’s treated differently. You will owe tax on all your earnings from can and video work, including any private cash or payment app payments you take.


I have a list of USA sex work accountants along with my notes on them (reviews, warnings, pricing etc) I can dm you later today from my computer.

S-Corp suggestion typically only applies after you’re over like 80k before you’ll see significant savings. The burden on bookkeeping is higher so if you do it discuss the obligations thoroughly with your tax professional (or two.. I’ve had conflicting advice on this from accountants)

It’s pretty normal to pay 20-30% in taxes here. Some states even higher.. my accountant told me to set aside 40% this year and I wanna die lol



Some other write offs you might be able to deduct:

A phone you use primarily for work
A computer you use for work
Any travel to and from adult conventions etc
Your tax professionals fees
A portion of your home as a home office deduction
A portion of your internet and utilities
A portion of what you pay a house cleaner
Lighting equipment
Sex toys, lube, props, cam space furnishings and set design
Cameras
Costumes specifically for cam
Software you buy for cam (example I pay for canva, filmic pro, premiere pro)
Any professional services relating to your business. Photographers, legal, assistants, etc
Any tips you give other models “networking” food you consume on camera
Professional development - eg if you pay for a course on video editing

 

[cbhours]

S-Corp suggestion typically only applies after you’re over like 80k before you’ll see significant savings. The burden on bookkeeping is higher so if you do it discuss the obligations thoroughly with your tax professional (or two.. I’ve had conflicting advice on this from accountants)

It’s pretty normal to pay 20-30% in taxes here. Some states even higher.. my accountant told me to set aside 40% this year and I wanna die lol

At 60k assuming you pay yourself 40k you are looking at about a 3k savings in self employment taxes. Figure 500 for the payroll after that depending on the price of your accountant let's assume 2k? I don't know what they charge these days. 2500 bucks so 500 dollars in savings but you probably spent some of that on formation and depending on the state may have some additional fees. So at 60k barely worth it, at 70k you'll save about 1.5k more so I think that's worth it.

 

[LaceyRoyce]

At 60k assuming you pay yourself 40k you are looking at about a 3k savings in self employment taxes. Figure 500 for the payroll after that depending on the price of your accountant let's assume 2k? I don't know what they charge these days. 2500 bucks so 500 dollars in savings but you probably spent some of that on formation and depending on the state may have some additional fees. So at 60k barely worth it, at 70k you'll save about 1.5k more so I think that's worth it.

for me when l looked at it hovering around 80k my accountants fees made it that I was only saving a couple grand. When im not sure if my income will stay consistent year to year, and the bookkeeping burden seemed heavy for my situation (I hire models and a content manager and also shoot in different states which apparently meant paying state taxes in each state I work in)

Anyway for me it wasn’t the right choice but I guess it might be depending on fees, income stability and situation

 

[cbhours]

Since the thread went stale I'll throw in some interesting methods I've heard wealthy people talk about (dont shoot the messenger I haven't tried any of them, don't even know an advisor that can help me execute #2).


Methods for americans:

1. If your willing to move to Puerto Rico, buy a house, and stay there over 6 months a year look into something called act60 which will allow you to only pay 4% in taxes. (Puerto rico has kind of a high crime rate and frequent power outages so keep that in mind)

2. There is apparently a better method than an s-corp involving setting up a foreign company and paying yourself through the foreign company, the idea is similar to s-corp but theres no payroll taxes for the foreign company.

3. If your willing to stay out of the USA for a year by bouncing to 3+ countries never staying in any for more than 4 months you can claim feie credit (120k reduction in taxable income) and foreign housing credit without owing any of the other countries any taxes because you did not stay long enough to become a resident (you have to research details on tax residency for each country some of them have tricky rules but in general many don't consider you a tax resident if you stay under 6 months).

If you arent an american then it's much easier (you just need to visit 2 countries and stay out of your country for over 6 months) and more effective for most countries and instead of 120k reduction in taxable income you would likely pay 0 in income taxes as you wouldnt be a tax resident any where. (Won't work for all countries)