Quarterly Estimated Tax Payments: Guide for Camgirls

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The advice below is provided by Jeff Lang, CPA of camgirlcpa.com. Check him out for any and all tax help!

Quarterly Estimated Payments

Everyone has to pay taxes on the income they earn throughout the year, and the IRS expects these payments to be made as you earn the income, which they refer to as “pay as you go.”  For people with “regular” jobs where they receive a W-2 at the end of the year, their employer usually withholds a chunk of money from each check and remits it to the IRS to cover these payments.  As cam models, you are considered independent contractors, not employees, so you receive a 1099 at the end of the year from any source where you made over $600.  As an independent contractor, the cam and video sale sites don’t withhold any money to cover your taxes so you’re responsible for making those payments in the form of estimated tax.

Estimated Tax

Estimated tax is the method of paying tax on income that is not subject to withholding, such as interest, rent, dividends, or self-employment (1099 income).  The IRS requires estimated tax be paid quarterly (see schedule listed below), usually in equal amounts.  The payment amount is usually based on your income from the previous year, adjusted based on any changes to your earnings in the current year.  Your tax professional can help you make these calculations and determine your estimated tax payments.  One incentive for making these payments is that any time your tax due at the end of the year is greater than $1,000, the IRS imposes a penalty for not making appropriate tax payments during the year.   You can avoid this penalty with effective quarterly estimates.

Payment Schedule

Your quarterly estimated tax payments are due based on the following schedule:


Income earned January 1-March 31: Estimated payment due April 15 (or whenever individual tax returns are due; April 18 in 2017).

Income earned April 1-May 31: Estimated payment due June 15.

Income earned June 1-August31: Estimated payment due September 15.

Income earned September 1-December 31: Estimated payment due January 15 (of the following year).


It’s important to make your estimated payments by the deadline, but if you can’t make the full payment a partial payment is better than nothing and shows the IRS your willingness to pay what you owe.  If possible, make up the missed amount during the next quarterly payment.

Keep track of how much you pay each quarter.  Your tax preparer will need this information when preparing your return to make sure you get credit for the payments.

How to Pay

The IRS offers several different options for making estimated payments:  

  1. Check by mail: Your tax professional can help you prepare 1040-ES, which is the Estimated Tax for Individuals form.  You will write a personal check or get a money order/cashier’s check for the amount of your payment and send it to the address on the form, along with the voucher at the bottom of the form.  Be sure the envelope is postmarked by the payment due date.
  2. Online via bank account: You can also make your estimated payments online using your bank account, at https://www.irs.gov/payments/direct-pay.  Make sure to select “Estimated Tax” for your payment type.  Using this option does not incur any additional fees.  Payments are due on the due date.
  3. Online via credit or debit card: This option may be the most convenient for some people, but the payment processors charge a convenience fee, so we suggest avoiding this option unless it is your only method of payment.  Payments can be made by choosing a processor on this website, https://www.irs.gov/uac/pay-taxes-by-credit-or-debit-card, and ensuring you select Estimated Tax when making the payment.  Payments are due on the due date.

Summary

First time cam models are often shocked by how much they owe the IRS when they file their tax return at the end of the year.  Much of this shock, and an IRS penalty, can be avoided by making quarterly estimates to spread your tax burden throughout the year.  Contact your tax professional for assistance in calculating your estimates today to avoid a large tax bill next year! 

If you would like Jeff to help with your taxes, contact him at www.camgirlcpa.com/contact/. Mention promo code “CAMTAX10” for $10 off your tax preparation fee!

Doing Taxes as a Camgirl – What You Need to Know

camgirl accountant taxes

 

Tax season is upon us, so camming tax advice is due! What sort of write offs can you have as a cam model? Do you need to file your taxes? Do you need an accountant or can you do it yourself?

I’ll answer these questions here, but keep in mind that I am not a licensed professional and don’t know your particular situation. For any specific advice, I would always suggest asking an accountant.

First off, YES, you need to file taxes for any income you receive the previous year (if it’s over $400 if you’re in the US). Working for a camsite, you are classified as an independent contractor, and they will mail you a 1099 form listing your income. If you are not american, you’ll have to report your income earned yourself without the form.

What happens if I just don’t file taxes?

Well, somewhere down the line IRS will be contacting you asking why you haven’t been making payments and making sure that you do, in which case you will be paying late penalties. Another way to get on IRS’s bad side is overstating your expenses/write offs. If you have way too many or too many inappropriate expenses, it might raise some red flags resulting in an audit.

However, if you record your earnings and don’t go totally crazy with deductions, you will be fine.

I’ve never done taxes before! Should I hire an accountant?!

Possibly, but in a lot of cases an accountant is not needed. I understand that filing taxes for the first time or doing it for the first time as a self-employed person is scary, but tax software is really easy to work with and is created in a way that guides you through it step by step and corrects any potential mistakes. I recommend the TurboTax Home & Business version, which you can get as a PC/Mac download or as a disc.


If you want the peace of mind, I do recommend having an accountant assist you with taxes to ensure you’re covering all your bases and that you save as much money as you can when you file your return. Jeff Lang is a certified public accountant (CPA), specializing in tax preparation for those in the adult industry, so you don’t have to worry about going to an H&R Block and getting an accountant who may not be comfortable with your job or understand your situation. Jeff can also assist with quarterly estimates and business incorporation (S-Corp or LLC), and make the whole experience quick and easy.

If you mention the promo code, CAMTAX10, you will get $10 off your tax preparation fee!

Click here to get in touch with Jeff!

camming accountant

 

Write Offs for Camming

The beauty of being self-employed is that you can write off a lot of your expenses, but only those that you used directly for camming. That’s why deducting things like lingerie or makeup is a bit of a grey area and different people will tell you different things. To be on the safe side, I would not include expenses like makeup, clothes, lingerie, salon visits, tanning, plastic surgery, or toys UNLESS you can prove that you only used them for camming.

Also, remember to save all your receipts! You will have to show them if you’re ever audited.

So, here are the things you can write off:

    • Part of your rent (You will have to report what percentage of your house is used for “business” and any expenses associated with it will count as deductions)
    • Percentage of your utilities: heat, water, electricity, internet, phone
    • Equipment, such as webcams, lights, camera (that you use specifically for camming), laptop (again, strictly for camming)
    • Other supplies and camroom decorations
    • Travel expenses  (to go to conventions or photoshoots, including gas, flights, hotel room charges, food)
    • Mailing supplies and expenses, if you ever ship any items to customers
    • Other business expenses, like advertising, web design or hosting fees if you have your own website

 

Remember to save about 20-30% of your paycheck throughout the year to not be hit with a huge tax bill and not having money to pay it. Keeping track of all your expenses throughout the year is also a good idea, so that you’re not scrambling to find things at the last minute.

One more thing, if your tax bill is over $1,000 this year (if you’re in the US), you will be required to pay quarterly estimated taxes the following year, so be aware of that. Check out my post on quarterly estimated tax payments here.

Any questions? Let me know! Good luck!