View Full Version : Camming And Taxes
Melonie
04-14-2012, 04:51 AM
^^^ here !!!
http://ambergriscaye.com/pages/town/art/blueholelg.jpg
http://www.century21belize.com/wp-content/uploads/2011/12/GP-house.jpg
You'll probably not believe this, but my rent is US $550 per month utilities included ( except for high speed internet service ). And yes the ocean is right across the street !
Melonie
04-14-2012, 04:55 AM
Also I'm curious about how this comes up on a background check, I thought if I set up an LLC then the checks can be transferred under the LLC or I can be an employee of said LLC. The reason for this is to protect myself from prying/nosy people, past co-workers blah, blah blah since I left the corporate world I am getting a ton of questions from old employers and co-workers and don't need nor want any attention.
You are correct. With an LLC or S-Corp acting as a 'front', with all webcam and other adult industry earnings being received by the LLC or S-Corp and in turn paid out to you as a salary + dividend, future background checks may wind up 'stopping' when they encounter the fact that you 'work' for your LLC or S-Corp. There are also some tax advantages, which mean a lot if you are a California resident !!! This won't 'hold up' to an FBI level background check ( i.e. for positions as a teacher, anything requiring a professional license, banking, law enforcement, etc. ) but it will probably satisfy average straight job employers.
Lenire
04-16-2012, 08:29 PM
^^^ here !!!
http://ambergriscaye.com/pages/town/art/blueholelg.jpg
http://www.century21belize.com/wp-content/uploads/2011/12/GP-house.jpg
You'll probably not believe this, but my rent is US $550 per month utilities included ( except for high speed internet service ). And yes the ocean is right across the street !
If I dont get into the UK eventually I might just be your neighbor. ;)
Fridays
04-16-2012, 09:36 PM
awesome place! wow.....
charise
04-17-2012, 10:19 AM
who is good to go through for a LLC or S-corp???
Melonie
04-18-2012, 03:33 PM
^^^ thorough discussion of LLC's and S-Corps in the Dollar Den
LusciousKatya
04-18-2012, 08:11 PM
^^^ here !!!
http://ambergriscaye.com/pages/town/art/blueholelg.jpg
http://www.century21belize.com/wp-content/uploads/2011/12/GP-house.jpg
You'll probably not believe this, but my rent is US $550 per month utilities included ( except for high speed internet service ). And yes the ocean is right across the street !
I believe it!!! I've made several visits in the last couple of months to several countries down south. By the way I know where you live Melonie!!! Lol! Love it!!! Thanks for your response Melonie, I figured this was the best way to go as I don't want any of my old co-workers and BF's to find me out. Thanks again!
XOXOX
Kat
renaissancelove
04-19-2012, 02:47 AM
^^^ here !!!
http://ambergriscaye.com/pages/town/art/blueholelg.jpg
http://www.century21belize.com/wp-content/uploads/2011/12/GP-house.jpg
You'll probably not believe this, but my rent is US $550 per month utilities included ( except for high speed internet service ). And yes the ocean is right across the street !
You just posted my dream home and location! Small, but lovely. Slightly secluded and warm. Would you mind if I ask kind of how the tax structure is where you live? I am incredibly interested in south of the boarder locations now :D
Melonie
04-20-2012, 02:14 AM
Would you mind if I ask kind of how the tax structure is where you live?
Zero taxes are imposed by my 'adopted' country on income earned outside the country ... which if structured correctly means active income from camming ( because there are no webcam hosts operating from my 'adopted' country ). My 'adopted' country also imposes zero taxes on capital gains which also means passive income from investments held in 'local' bank / brokerage accounts are not taxed by my 'adopted' country.
Also, providing that I remain outside the USA for a minimum of 330 days per year, zero US taxes are collected from the first $110,000 ( for 2012 ) of non-US origin income ... which if structured correctly means active income from camming ( provided the webcam host isn't US based ), which also means passive income from investments held in bank / brokerage accounts located outside the US etc. This limits me to two short 'vacations' back to the USA per year, but there's no restrictions about travelling to any other countries besides the USA whenever I like. And I do this a minimum of once per month, mainly to shop for 'north american' goods at reasonable prices at the closest Wal-Mart ( which is in a different country, but less than an hour's drive ! ).
Additionally, my 'adopted' country is NOT party to the (supposedly ) terrorist anti-money laundering financial information sharing treaty which was at the root of recent problems for the Swiss banks being forced to disclose financial info on US account holders to the IRS. As a US citizen I am required to report the existance of any non-US accounts holding more than US$10,000 to the US State Dep't ( which also means that you can have a large number of accounts holding $9.900 at different non-US financial institutions without having to report them ! ).
The ONLY way that detailed financial information on account holders at 'local' banks / brokerages will be disclosed is through an order from a court in my 'adopted' country ... which is expensive and almost never results in a disclosure order in the absence of proven evidence of a major crime. However, I need to 'qualify' this by stating that this is only true for 'local' banks and brokerages which do not have affiliate operations in the USA ( if they do, then the IRS has a 'back door' available for accessing info on US citizen account holders at foreign branches ) - some local banks do, but some local banks don't !
Yes I did a lot of research before arriving at my particular choice of which country to 'adopt' ! And yes every bit of this US tax avoidance is 100% legal !!!
Were I still actively camming part time, and still earning say $1000 a week = $50k per year, if I were still residing in the USA / New York, the US + NY taxes due on that camming income would be something on the order of $350 per week - which in turn would leave me $650 a week with which to pay for rent, food, utilities, transportation etc. - thus allowing me to maybe save $100 per week ( = $5000 per year ) if I was 'careful' about my spending. Down here south of the border, that same $350 per week formerly going towards US / NY taxes would instead go straight into my pocket, and would be sufficient cover my rent payment + grocery bills + utility bills + transportation costs - thus allowing me to 'bank' the remaining $650 a week ( = US$30,000+ per year ) ! So yes the tax structure and relative costs of living down here way south of the border makes a HUGE difference !!!
By the way I know where you live Melonie!!
well, please don't share that with my ex-husband or my 'fanatical' former fans LOL !!!
You just posted my dream home and location! Small, but lovely
Thanks ... I think so too ... here's another shot taken from my side porch !
http://www.century21belize.com/wp-content/uploads/2011/12/GP-yard-porch.jpg
amberose
04-20-2012, 01:32 PM
Melonie, if you don't mind me asking...are you still a US citizen and if so, it's true that you actually don't need to pay any income taxes because the US essentially doesn't see your money? Just trying to clarify, I'm a little slow.
I've looked at houses where you live, it's true that it's actually really cheap to rent there.
Melonie
04-20-2012, 01:52 PM
Yes I am still a US citizen. I am also a 'permanent legal resident' of my adopted country.
Clarifying the US tax picture, the IRS provides a 100% legal 'Foreign Income Exclusion' from US income taxes ... from
(snip)"If you are living and working abroad you may be entitled to the Foreign Earned Income Exclusion. Here are five important facts from the IRS about the exclusion:
The Foreign Earned Income Exclusion United States Citizens and resident aliens who live and work abroad may be able to exclude all or part of their foreign salary or wages from their income when filing their U.S. federal tax return. They may also qualify to exclude compensation for their personal services or certain foreign housing costs.
The General Rules To qualify for the foreign earned income exclusion, a U.S. citizen or resident alien must have a tax home in a foreign country and income received for working in a foreign country, otherwise known as foreign earned income. The taxpayer must also meet one of two tests: the bona fide residence test or the physical presence test.
The Exclusion Amount The foreign earned income exclusion is adjusted annually for inflation. [edit]For 2012, the maximum exclusion is up to $110,000[edit] per qualifying person.
Claiming the Exclusion The foreign earned income exclusion and the foreign housing exclusion or deductions are claimed using Form 2555, Foreign Earned Income, which should be attached to the taxpayer’s Form 1040. A shorter Form 2555-EZ, Foreign Earned Income Exclusion, is available to certain taxpayers claiming only the foreign income exclusion."(snip)
The 'physical presence' test ( which is used in lieu of purchasing real estate in a foreign country ) requires that the person spend 330 days per year OUTSIDE the USA.
There isn't an issue with the US / IRS seeing or not seeing the money. The 'Foreign Income Exclusion' excludes up to $110,000 worth of non-US based annual earnings of US citizens residing in foreign countries from US income taxes all by itself. My personal concerns about wanting to keep my personal finances as private as possible are a matter of general principle, as well as a desire not to wave any unnecessary 'yellow flags' which might attract an IRS audit - which I would definitely survive. But I don't want to have to deal with an IRS audit since it would require me to 'waste' some of my allowed 35 days per year within US borders in an IRS office instead of with friends / family.
And yes almost everything is cheap down here. However there are some notable exceptions ... high speed internet service for one ( $200+ per month from the 'monopoly' national telecom company ), 'north american' imported goods for another ( processed foods, vitamins / supplements, etc. ), and gasoline prices are on a par with NY or LA.
amberose
04-20-2012, 02:40 PM
Ah, I see, thanks. :)
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Melonie
04-21-2012, 06:52 AM
At the risk of veering off topic ... which it really isn't since the question of 'is camming still worth it' still applies ... allow me to make a few comments in regard to the value of the 'expatriation' option for US camgirls ...
All of the above discussions about the advantages of moving to a low tax, low cost of living country were based on current tax conditions in the USA. Current tax conditions in the USA, while appearing 'high' already, are actually 'temporarily' reduced ... with many of those 'temporary' tax reductions already slated to expire as well as new taxes due to take effect at the end of 2012. Net result is likely to be an increase from 13.3% to 15.3% in camgirl SSI/medicare taxes, an increase from 25% to 28% in camgirl federal income taxes, an increase from 15% to 28% on camgirl 'dividend' income ( from S-Corp or investments ), etc. Additional tax increases are also slated for 2013 at the state and local level. While none of the analysts have crunched the numbers in specific regard to the effect of these US tax changes on small businesses i.e. camgirls, those analysts have announced that the effect is likely to result in an additional $3,800 per year in taxes for average American households. Obviously, new US legislation could stop or reduce some of the US tax changes that are already in the pipeline, but IMHO the realities in Washington DC makes a complete stoppage extremely unlikely. Thus it's a virtual certainty that a US camgirl will wind up keeping significantly less of her 2013 earnings than she was able to keep in 2012 due to increased US taxes.
See and
Applying possible 2013 US tax rates to my US$1000 per week webcam income example above, if the 35% US effective tax rate I used for 2012 increases by 2% SSI + 3% federal income tax + 2% state and local tax, this could yield a 42% effective tax rate for 2013. With the same $1000 in weekly pre-tax camming income, this would mean that in 2013 a US camgirl could wind up paying $420 per week in taxes, with $580 remaining from which to pay for living expenses. And making the generous assumption that none of her present costs of living will increase in 2013, the increased US taxes could leave her with just $30 a week ( = $1,500 per year ) in savings potential. And if other US businesses raise prices to compensate for their own higher taxes, the US camgirl may not be able to save ANY of her 2013 earnings.
This obviously means that the financial advantage of relocating to a low tax foreign country will become even more 'valuable' in 2013 than it already is. This fact has not been missed by the US gov't / IRS. As a result, a bunch of new laws are already being proposed and passed that could have a profound effect on the future ability of US citizens to relocate outside the US while taking their savings and investments with them. A recently publicized new law attempt would confer on the IRS the ability to 'block' the passports of US citizens whom the IRS claims ( not has proven, merely claims ) owes 5 figure back taxes. Another recently publicized new law attempt would force the de-facto posting of a 30% 'reserve against possible taxes' on investments which a US citizen wishes to move out of the US ( which could force the sale of the investment in order to fund the 30% 'reserve'). In terms of a specific example, if a US ex-pat were to try to move $100,000 in accumulated investments from a US account to a foreign country account, they could be forced to leave $30,000 behind in a 'frozen' US bank account as a condition of being allowed to remove the remaining $70.000. These new law attempts are obviously aimed at the increasing number of 'rich' Americans who are already starting to move their assets, as well as themselves, outside the USA in order to avoid the effect of rising future US taxes. However, some of the effects will also fall on Americans who have 'middle class' incomes, like camgirls !
The point I'm heading toward is this. If you're having any serious thoughts of expatriating out of the USA, it would be far better to do it in 2012 than in future years. We've just discussed the point that higher US tax rates + new taxes, given identical webcam earnings, further increase the actual amount of money that an ex-patriate US camgirl can keep for herself if she moves to a low tax rate, low cost of living foreign country. But there's also a flip side ... which is that a large influx of new ex-patriates occurring in a particular low tax foreign country location can quickly drive up formerly low prices for local real estate, for better quality goods and services, etc. This has arguably already started to happen in popular ex-pat locations in Panama, Costa Rica etc. In this regard, getting there later can be far more expensive than getting there sooner. This point came up in my extensive personal research, and was a major reason that I chose to relocate to a 'less publicized' low tax rate low cost of living foreign country !
Swinging away from the topic of potential ex-patriation, for US camgirls who continue to reside in the USA in 2013, the central question of 'is camming still worth it', in light of the US tax rate increases that are already in the pipeline for 2013, will undoubtedly draw increased attention as the new year draws closer. In the meantime, camgirls should try to earn all that they are able to in 2012 while they can still 'keep' more of the money they have earned !!!
Marie Thorne
04-23-2012, 06:42 PM
Oh my, this is nice:
Health Insurance Costs should be easier to deduct for the self employed.
Remember as well as tax rate increases and whatnot, to pay attention to everything for small businesses and stuff. Self employment tends to be contained in the same area, and they might make some change that makes it a lot easier for you.
Here's the small business administration website, it can definitely help:
For most things it might not be useful, due to the nature of the business there might still be some things that are useful.
Melonie
04-23-2012, 08:24 PM
The health insurance costs deduction ( technically, adjustment to income ) does exist, but has a few wrinkles ...
(snip)"Who qualifies: In order to claim this deduction, the IRS says you must be one of the following:
•A self-employed individual with a net profit reported on Form 1040 Schedule C, Profit or Loss From Business; Schedule C-EZ, Net Profit From Business; or Schedule F, Profit or Loss From Farming.
•A partner with net earnings from self-employment reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., box 14, code A.
•A shareholder owning more than 2 percent of the outstanding stock of an S corporation with wages from the corporation reported on Form W-2, Wage and Tax Statement.
Policy requirements: The insurance plan must be established under your business.
For self-employed individuals filing a Schedule C, C-EZ or F, the policy can be either in the name of the business or in the name of the individual.
If the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. Otherwise, the insurance plan will not be considered to be established under your business.
A few other points: You'll have to fill out a short worksheet, found in the 1040 instructions (or your tax software) to make sure exactly how much you can deduct.
And even the availability of other coverage could limit your self-employed health care deduction.
If you were eligible to participate in any employer-subsidized health plan, including your spouse's workplace plan, you cannot take the self-employed health coverage deduction for any month that such coverage was available. This restriction applies even if you didn't actually participate in the plan.
You can get more details in IRS Publication 535."(snip)
... which basically says that if you are self-employed, and if you have no other available options for health insurance coverage ( i.e. via your own straight job or spouse's straight job), then you can reduce your AGI by the amount you paid for health insurance premiums thus reduce your tax liability. However, the additional fact remains that purchasing health insurance as a small business can be mui expensive ( compared to other options like COBRA through a former straight job employer ). Many states do offer 'subsidized rate' health insurance for small businesses, however. And of course the 'equivalent cash value' of this tax deduction is a function of how much money your 'business' actually earns - at $75k per year it could be worth a couple of grand, while at $35k a year it could be worth a couple of hundred bucks. So do the math both ways ... just because you can recoup x% of the cost of small business health insurance via a reduction in tax liability doesn't mean that it's the best 'deal' available overall.
Incantatious
04-26-2012, 02:06 PM
http://www.century21belize.com/wp-content/uploads/2011/12/GP-yard-porch.jpg
Holy Christ..
Yes... I think this picture, as well as your posts Melonie, has shown me that hard work camming, along with being money-conscious - is absolutely worth it.
I feel like I've been punched in the face with inspiration and motivation. Thank you Melonie!
miamia4me
04-26-2012, 03:05 PM
Camming works out for me because I dance on the side and stash all that money where the doesn't shine. :) I pay taxes on camming but most of my $ is from dancing, student grants/loans, and family/friends.
sexysusie
05-01-2012, 05:40 AM
Hi ladies I have a question for you, and sorry if it's been asked a few times already. How do you manage your tax money i.e. when you get paid do you just set aside a % of that to save for taxes? I'm thinking of using my spare savings account and just transferring 30% of everything I'm paid, into it. That will pay off my tax bill and hopefully earn me a little on the side. Also, paying my accountant's bill from this account, and buying toys/ equipment etc so there is a steady record of incomings/ outgoings. Does that sound a good idea? Thanks x
Melonie
05-01-2012, 02:08 PM
^^^ In my own case, I maintained a dedicated 'business' bank account. I deposited all of my 'earnings' into that account, and then transferred out a certain amount of money into a personal bank account to 'pay myself' every week. Four times a year ( before the IRS due dates ), I would have a cashier's check drawn to send to the IRS along with a quarterly 1040-ES estimated tax voucher, and a smaller cashier's check drawn to send to my state tax dep't along with a quarterly state estimated tax voucher. In my case, between 15% self-employment tax, 22% federal income tax, 6% state income tax, and another percent NY City income tax, about 44% of my earnings wound up going toward estimated tax payments.
sexysusie
05-01-2012, 04:18 PM
Oh haha and there's me thinking I'm being generous estimating 40% :D I have a student loan, national insurance to pay, and class 4 NI too. Grr, taxes!
loveshooks
05-01-2012, 10:47 PM
^^^^the amount of tax you'll pay will depend upon which tax bracket you fall into, which state you reside in, and the tax write-offs for which you qualify, if any.
Before you create a savings plan for tax purposes, definitely find out at least roughly how much tax YOU'll need to pay, based on your specific income level, location and other relevant criteria (although if you'll also be using the account to make camming purchases it's smart to over-estimate). My tax bracket is now fairly high, but for many years I paid alot less tax proportionately (and in $$) than I do now, simply because I had a lower income than I do now. A tax bill of 44% is not some universal (US) tax rate.
I think you're making a wise choice using a dedicated savings account. I'm not a big spender, so I don't use that method as a way of 'enforcing' saving, but I like knowing that each area of my life is being covered by a dedicated percentage of my earnings. I set up automatic withdrawals from my main account so I don't have to deal with it every two weeks.
Melonie
05-02-2012, 02:06 PM
I think you're making a wise choice using a dedicated savings account. I'm not a big spender, so I don't use that method as a way of 'enforcing' saving, but I like knowing that each area of my life is being covered by a dedicated percentage of my earnings. I set up automatic withdrawals from my main account so I don't have to deal with it every two weeks.
Keeping business finances separate from personal finances also helps when an IRS auditor eventually comes sniffing around.
Agreed that tax brackets do vary with the amount of 'net' income. However, the 15.3% social security / medicare tax does not vary, and applyies to every single dollar earned. And state / local income tax rates vary from zero in some states to 'painful' in some other states. If your earnings level is say $500 a week, you may not owe much more than the 15.3% social security / medicare tax. If your earnings are $1000 a week, you may owe 10% federal income tax on top of 15% SSI tax. If your earnings are $1500 a week, you may owe 20% federal income tax on top of 15% SSI tax.
sexysusie
05-02-2012, 05:34 PM
OK, got another question - I need some gorgeous sexy pics to use for promotion on my websites/ blogs/ banners. As I'm a totally low maintenance personal grooming type girl (i haven't been to a hairdresser in over 5 years!!), I will need some serious makeover before my photo shoot. Would the makeover (hd brows, eyelash extensions, brow and lash tinting, tanning, nails etc), and the shoot itself be tax deductible do you think? I would NEVER get this kind of stuff done except for work, it's just too time consuming/ expensive/ not my style, so would i have a case that it's clearly and wholly work related?
Fridays
05-02-2012, 06:08 PM
yes... those are " work"expenses..
Melonie
05-03-2012, 03:09 PM
^^^ better make that a 'qualified' yes. For US girls, the IRS subjects all business expense tax write-offs to a 'Housewife Test'. IRS logic goes that if a housewife would spend money on _____ , with absolutely no business reason for doing so, then a business expense claim can be denied on the basis that whatever the money was spent on was of 'personal' benefit. Do housewives spend money on tanning, on nail salons, on hair salons etc. even though you may not ? Yup
On the flip side, the IRS also allows 'ordinary and necessary' business expenses ... with enhancing personal appearance arguably being of direct business value for camgirls, dancers, models etc. As such, camgirls, dancers, models etc. typically take a 50% write-off on any expenses that fail the 'housewife test'. 100% write-offs really need to be for something that is clearly for business purposes, with no associated 'personal' benefit.
sexysusie
05-03-2012, 04:55 PM
Yes I was thinking of playing it safe and only claiming for 50%. Got a bit carried away today with shopping for personal as well as cam clothes and had to stop myself because i was already mentally calculating how many deductions i could make haha!
Melonie
05-05-2012, 05:10 PM
^^^ yup ... but be a bit careful. At best, the business expense tax deduction only represents a 20-30-40% 'discount', depending on your personal in income level and tax situation ! The other 60-70-80% is still coming out of your own 'pocket'.
kellypierce
05-06-2012, 10:07 AM
My husband does taxes - he is a JD/MBA
And that doesn't seem right -especially with all the stuff you can write off
But anyhoo I joined for another reason :P
sexysusie
05-06-2012, 03:45 PM
What doesn't seem right?
Melonie
05-20-2012, 10:41 AM
And that doesn't seem right -especially with all the stuff you can write off
Assuming that your comment about 'doesn't seem right' applies to the effective tax rate ...
every independent contractor US camgirl is going to be hit with a 13.3% Social Security + Medicare tax ( a.k.a. 'self-employment' tax ) on every dollar earned up to $106,000 for 2012. Barring new legislation, this will climb ( back ) up to 15.3% for 2013
Based on a typical annual $50,000 in 'gross' webcam income, with perhaps $5,000 worth of legitimate business expense tax deductions, it's probable that a single camgirl will experience an effective US federal income tax rate of about 15%. This is obviously subject to a lot of variation based on other factors such as the deductibility of high state income tax payments, a dependent child, home mortgage interest payments, etc. And of course if the camgirl is married, a whole bunch of new factors come into play since tax rates will then be based on the total incomes and total deductions of both spouses.
Based on the same annual income assumptions, it's probable that the effective Illinois state tax rate will be about 4%. Some states do not levee a state income ta at all, while other states ( like NY and CA ) levee a higher state income tax rate.
Adding up the three different taxes results in a total effective tax rate that is in the 30% ballpark for a camgirl whose earnings fall in the $1000 per week = $50,000 per year range.
Indeed there are measures that can be taken to minimize the amount of taxes owed. The most obvious of these is to maximize legitimate business expense tax deductions. The most 'lucrative' of these is establishing the necessary criteria for taking a 'home office' tax deduction for a dedicated camming 'studio' room ... which in turn allow writing off a certain percentage of rent/mortgage payments, a certain percentage of utility bills. However, the criteria is very strict ... and taking this deduction arguably increases the probability of an IRS audit in a major way.
Not every camgirl has access to a 'free' attorney / CPA available if and when an IRS audit takes place, so many camgirls choose to be 'conservative' in regard to their business expense tax deductions ( trading off potential loss of legal but highly auditable tax deductions, versus potential future costs of surviving an IRS audit ) !!!
Cam_Model_Jess
05-21-2012, 07:36 AM
i feel as though i should be setting 50% aside instead of 30% because... in the end you dont how much youre going to owe everyone for your existance... might be more. or they might charge penalty fees if youre lazy like me and you only file once a year
...... :[
Just to make it easy for you (this is what I did my first year and it worked out fine for me):
1. You can simply put 30% of your income into a separate savings account and let it build up there.
2. Take out your tax forms from last year. Look at the total amount of taxes you owed.
3. Divide that number by four. Send four payments in that amount on the day they're due. You really DON'T have to fill out all that paperwork every quarter. You're ONLY required to pay 1/4 of your tax due LAST year. They won't impose penalties on you for paying less than you owe because you can only base your estimates on last year's numbers. (See exception below)
Ex: Last year you owed $6,000 in taxes. Send $1,500 quarterly and you'll be fine. Even if you actually should be paying $1,700/quarter, they won't penalize you. And, since you already have the money set aside in a savings account, all you have to do is write a check.
EXCEPTION: If you make A LOT more money this year than you did last year, you need to actually do some math. You still don't really have to fill out forms as long as you don't mind overpaying. Just take your anticipated income, figure 30% tax for that income, subtract your standard deductions & exemptions, divide the number by 4 and send that amount. HOWEVER, if you anticipate owing more than $2000 at the end of the year, you will have to pay penalties on anything over that amount. But if you've paid your quarterly payments, the penalty will be very small.
Emma Rose
05-24-2012, 03:15 PM
Hi Renaissancelove,
Are you itemizing your deductions? You can probably reduce your tax bill by itemizing instead of taking the standard deduction(s). I know that many of the girls who shop in our store save their receipts and write off their purchases off as expenses - the dancewear they use; the supplies they need, etc. It helps to have a tax guy who knows the specific rules. One idea is to ask the ladies who you work with what tax person they use. The Fed tax rate on $48,000 for a single person is about $8,000. You should be able to reduce that :)
ThickGeisha
05-24-2012, 07:23 PM
Zero taxes are imposed by my 'adopted' country on income earned outside the country ... which if structured correctly means active income from camming ( because there are no webcam hosts operating from my 'adopted' country ). My 'adopted' country also imposes zero taxes on capital gains which also means passive income from investments held in 'local' bank / brokerage accounts are not taxed by my 'adopted' country.
Also, providing that I remain outside the USA for a minimum of 330 days per year, zero US taxes are collected from the first $110,000 ( for 2012 ) of non-US origin income ... which if structured correctly means active income from camming ( provided the webcam host isn't US based ), which also means passive income from investments held in bank / brokerage accounts located outside the US etc. This limits me to two short 'vacations' back to the USA per year, but there's no restrictions about travelling to any other countries besides the USA whenever I like. And I do this a minimum of once per month, mainly to shop for 'north american' goods at reasonable prices at the closest Wal-Mart ( which is in a different country, but less than an hour's drive ! ).
Additionally, my 'adopted' country is NOT party to the (supposedly ) terrorist anti-money laundering financial information sharing treaty which was at the root of recent problems for the Swiss banks being forced to disclose financial info on US account holders to the IRS. As a US citizen I am required to report the existance of any non-US accounts holding more than US$10,000 to the US State Dep't ( which also means that you can have a large number of accounts holding $9.900 at different non-US financial institutions without having to report them ! ).
The ONLY way that detailed financial information on account holders at 'local' banks / brokerages will be disclosed is through an order from a court in my 'adopted' country ... which is expensive and almost never results in a disclosure order in the absence of proven evidence of a major crime. However, I need to 'qualify' this by stating that this is only true for 'local' banks and brokerages which do not have affiliate operations in the USA ( if they do, then the IRS has a 'back door' available for accessing info on US citizen account holders at foreign branches ) - some local banks do, but some local banks don't !
Yes I did a lot of research before arriving at my particular choice of which country to 'adopt' ! And yes every bit of this US tax avoidance is 100% legal !!!
Were I still actively camming part time, and still earning say $1000 a week = $50k per year, if I were still residing in the USA / New York, the US + NY taxes due on that camming income would be something on the order of $350 per week - which in turn would leave me $650 a week with which to pay for rent, food, utilities, transportation etc. - thus allowing me to maybe save $100 per week ( = $5000 per year ) if I was 'careful' about my spending. Down here south of the border, that same $350 per week formerly going towards US / NY taxes would instead go straight into my pocket, and would be sufficient cover my rent payment + grocery bills + utility bills + transportation costs - thus allowing me to 'bank' the remaining $650 a week ( = US$30,000+ per year ) ! So yes the tax structure and relative costs of living down here way south of the border makes a HUGE difference !!!
well, please don't share that with my ex-husband or my 'fanatical' former fans LOL !!!
Thanks ... I think so too ... here's another shot taken from my side porch !
http://www.century21belize.com/wp-content/uploads/2011/12/GP-yard-porch.jpg
So this is obviouly a genious life plan that you have come up with for yourself. Lets just say I'm a starting out cam girl who is thinking about expating to the same country you live in but I would not be able to become a qualified retired person because of my age, and I do not have the funds to buy a passport there. So I would basically be on a tourist visa, leaving the country every 6 months for a bit. Would I still pay US taxes? Is there any way I can live there tax free before I can qualify as a retired person?
Melonie
05-25-2012, 07:37 AM
I'm a starting out cam girl who is thinking about expating to the same country you live in but I would not be able to become a qualified retired person because of my age, and I do not have the funds to buy a passport there. So I would basically be on a tourist visa, leaving the country every 6 months for a bit. Would I still pay US taxes? Is there any way I can live there tax free before I can qualify as a retired person?
You can get 'permanent resident alien' status down here either via qualifying for the 'retiree' program ( minimum age 40 ) OR by making a business investment that will create local jobs. The 'buy a passport' program has also been officially killed as the result of complaints by major countries i.e. USA, Canada, most of Western European countries. So yes that leaves perpetual renewals of a 'tourist visa' ... which is no big deal. You simply have to leave the country overnight once every 6 months. Most people in this situation combine the overnight with a shopping trip in Mexico, or a tourist visit to another adjacent country.
Would I still pay US taxes? Is there any way I can live there tax free before I can qualify as a retired person?
If you're willing to limit your return visits to the US to 35 days per year maximum, any income earned while residing outside the USA falls under the IRS Foreign Income Exclusion. This basically allows the first $106,000 per year of moneys earned while outside the USA to be exempt from US income tax. Certain other US taxes may still apply, but most of them can also be legally avoided by forming a foreign based company to 'receive' your income, with that foreign based company then 'paying' you a small salary plus a large dividend.
However, I would point out that with all of the adverse publicity recently 'promoted' by certain parties in Washington DC over Facebook founder Eduardo Severin's avoiding tens of millions of dollars in US taxes by renouncing his US citizenship, new laws are being proposed that could significantly change the US tax rules ( and other financial aspects ) for future US expatriates. If your expected income will remain under the $106,000 per year Foreign Income Exclusion, most aspects of these proposed new laws woundn't have much personal effect. However, one provision being discussed is a 30% ( of all US assets ) 'exit tax' ... meant to dissuade future ex-pats from leaving by forcing them to give up 30% of the value of any US based assets they own.
Emma Rose
05-25-2012, 01:44 PM
ThickGeisha,
Great info in post. GeoArbitrage, as they cal it, is one of the best deals "in town" - what your money in dollars, live on pesos, and take in consideration tax advantages.
ramonaflowers
05-31-2012, 10:18 PM
I have a question about the benefits of claiming children on your taxes. I am 22 and after I start on SM I will have to convince my parents that I want to start doing my own taxes. Since they've always done mine for me I assume that it has been to their advantage. What is the advantage for them? Are they going to fight me on it? And what sort of new advantages/disadvantages will I have doing them on my own? I understand I'll have to set aside a chuck of my paychecks and I intend on paying four times a year just to be safe. I was trying to google this earlier but didn't get a clear answer. Just wondering if anyone is feeling kind enough to answer =]
loveshooks
05-31-2012, 11:21 PM
^^^what kind of relationship do you have with your parents? If they see you working hard and earning a good living (and they need not know exactly what you do, alot of chicas lie about doing other more socially acceptable forms of online work) would they still resist you taking control of your own finances?
I'm assuming a main reason why your parents have probably claimed your child(ren) in the past is because you haven't earned enough $$$$ each year to take maximum advantage of the tax deductions that children enable. Since through camming you'll be getting paid with no deductions built in, claiming your own child(ren) will make things much easier for you to reduce the amount of tax you'll need to pay. Let your parents know that, though again, many forms of online work involve paychecks without built-in deductions, such as affiliate work, so you don't have to tell them exactly what you're doing if you don't wish to.
Yes, doing one's own taxes is never fun, but since you're already prepared to put $$$$ away for taxes owed on your earnings, you've come to terms with the toughest part. Learning how to do taxes is a life skill you need to learn, and I hope your parents would realize that.
As tax time comes around next year, talk to your parents. Let your actions over this next year show them how independent you've become, and tell them how, while you appreciate whatever help they've given you, you're ready to do things for yourself.
You have alot of time to think about and prepare for this talk, so if I were you I wouldn't stress about it right now. As an adult with custody of your child(ren) you have the right to claim them, it's just a matter of how smoothly the conversation goes with your parents. Since you haven't even started camming yet it's way too soon to have that conversation.
Good luck, in both that conversation when it comes and on sm! :)
Melonie
06-02-2012, 05:38 AM
I am 22 and after I start on SM I will have to convince my parents that I want to start doing my own taxes. Since they've always done mine for me I assume that it has been to their advantage. What is the advantage for them? Are they going to fight me on it? And what sort of new advantages/disadvantages will I have doing them on my own? I understand I'll have to set aside a chuck of my paychecks and I intend on paying four times a year just to be safe.
The most basic issue is that 'you' are worth $3,800 in credits against taxes owed ( dependent exemption ). If your parents can claim you as a dependent, they get the $3,800 credit. If you file on your own as an 'emancipated' person, YOU get the $3,800 credit. There are also other potentially financially 'positive' tax consequences for your parents if they are able to claim you as their dependent. So the bottom line is that 'losing' you as a dependent will cost your parents big bucks !
However, the IRS is taking a much closer look at depend status of adult children than they used to. For example, if you are a college student, the law assumes that you must remain a dependent of your parents until you reach the age of 24. This won't stop you from filing and paying your own taxes, but it WILL stop you from being able to claim yourself as a dependent on your own tax return ( resulting in $3,800+ of additional taxes having to be paid by YOU, with $3,800+ of additional taxes NOT having to be paid by your parents ). There is a legal procedure i.e. 'emancipation' which allows college student children under age 24 to be treated as independent persons ( and claim their own $3,800 tax credit ), but this must be actively pursued in court.
There is also a 51% support requirement - which means that the parents must be able to provide documented proof that they actually provided 51% of the money spent by their child in order to claim that child as a dependent. If the parents have a $100k+ income, and the 'child' has $10,000 in 1099's from webcam hosts, this isn't much of an issue. However, if the parents have a $50k income and the 'child' has $25k+ in 1099's from webcam hosts, it can become a MAJOR problem.
Also, in the way of a reminder, the Q2 estimated tax payment due on webcam earnings between April first and June first is due for payment by June 15th ... two weeks from now. The Q3 estimated tax payment due on webcam earnings between June first and September first is due on September 17th. The filing vouchers can be found at the very end of
Mlle_Mystere
06-02-2012, 10:14 AM
Canadian ladies, take a look at this page for your basic bracket and % info: http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
The business side of things may be a whole other can of worms though, I haven't gotten there yet.
Fridays
06-02-2012, 02:09 PM
Melonie should have more people click " thanks" on her posts...
the info she puts out here for us is stunning!
AngeXx
06-02-2012, 05:17 PM
Melonie should have more people click " thanks" on her posts...
the info she puts out here for us is stunning!
I couldn't agree more!
miamia4me
06-02-2012, 07:34 PM
I want to but I use an app called forum runner and I don't see it anywhere. Thanks melonie you are so nice to explain so many topics.
Melonie
06-03-2012, 03:09 AM
^^^ I'm always happy to share things which I have been forced to learn about US taxes the 'hard way' ... in hopes that other girls can avoid some of the surprises and pitfalls that I've run into over the years.
LaceyCummings
06-05-2012, 07:29 PM
Melonie should have more people click " thanks" on her posts...
the info she puts out here for us is stunning!
I agree as well! I always read Melonie's posts carefully, as if I'm studying for a final.
Thank you so much Melonie for all the valuable information, and for taking the time to break things down to make it easy to understand. You single-handedly saved me a lot of headache with my taxes. If it weren't for your posts, I wouldn't have even known about quarterly payments, so I owe you a huge thank you! :hug: And that winning attitude is contagious.
I try to click thanks to show my gratitude as much as I can, but I also access StripperWeb primarily through my phone, and it doesn't have that option for whatever reason. I logged on to my computer just so I could go back and click thanks on these recent posts.
angeli
06-11-2012, 01:23 AM
bumping this thread for a quick question. I have a vanilla job and two kids to claim, would I be able to claim the children for my income taxes or will the IRS find a way to prevent me from getting whole sum of tax return back? The money I would get back for my tax return should be able to cover the taxes I owe, since i'm only camming part time. Thanks in advance
Melonie
06-12-2012, 10:55 AM
^^^ to answer the question that I think you are asking ... based on the assumption that you have employee payroll taxes withheld from your plain vanilla job paycheck but you have not withheld / paid to the IRS any estimated tax money due on your camming income ...
Having two children allows you to use 'head of household' filing status which has lower percentage tax rates than those that apply to a 'single' person. However, the equivalent cash value of the tax exemptions for yourself and your two children doesn't change as your income rises. What does change is the effective marginal tax rate percentage you must pay on a higher combined straight job plus camming income. This effectively increases the tax rate which applies to your straight job income as well as the tax rate which applies to your camming income. Also, other tax credits like the the $1000 IRS child care tax credit ( per child ) do not increase with higher income, and actually begin to be reduced as total income rises, something which may or may not be relevant depending on what your combined straight job plus camming income earnings total up to.
So the answer to your question is ... 'insufficient data'. It basically boils down to how big of a refund you have received in previous years from a straight job alone, versus how much camming income ( which is also subject to higher tax rates from dollar one due to higher social security and medicare tax rates ) you are adding on top of your straight job income.
In the way of wild guesswork, if your straight job pays $10 an hour = $400 per week = $20,000 per year, the effective tax rate on straight job income alone would have been 12% ( from which deductions and exemptions and tax credits are subtracted ). But if you add $200 per week = $10,000 per year of camming income, the effective tax rate on straight job income rises to 14%. And the effective tax rate on camming income consists of 15% social security / medicare tax plus 14% income tax. So in dollar terms, you might owe an extra 2% * $20,000 or $400 in income taxes on your straight job income, plus 29% * $10,000 = $2900 on your camming income ===> an additional $3,300 in total taxes. If you received a $3,300 refund last year on the $20,000 of straight job income alone you wouldn't have to 'pay in' additional money. If you received less than a $3,300 refund last year then you may have to pay in additional money. Again this is only guesswork meant to demonstrate the tax principles involved.
angeli
06-13-2012, 06:08 AM
thanks melonie your a lifesaver
Melonie
06-15-2012, 03:41 AM
I would only add that if you DO wind up having to pay in additional money, going forward you'll either have to file a new W4 to have more taxes taken out of your straight job paycheck, or have to start sending in quarterly estimated tax payments. After the first year, the IRS can / will start charging you penalties and interest for 'under-withholding'.
ThatOneGirl
06-20-2012, 08:31 AM
Geez I hate taxes... usually I go to a friend of mine who actually works for the IRS, but he's one of the people who can't know about my camming. Thanks for this thread, and for all the information in it!
I wouldn't mind setting aside so much money for taxes if it weren't for the political aspects of where that money eventually goes. >.< Anywho... just to be safe, I'm going to start setting aside 40% of each paycheck (50% if I can afford it), to pay what I owe for the two quarters that I've missed.
kellypierce
06-21-2012, 02:17 PM
If any girls need help or tax questions they can go to my husband
He does my taxes and is really good at saving me money by writing off a lot of things etc
I think that's an outlandish amount to pay as a cam girl especially when most cam sites take 65% of our earnings..