Taxes - Earnings listed on site vs. when the money hits your bank account?
So I'm going over my earnings and income and I was wondering, are you supposed to pay taxes on money when it hits your bank account from a site, or what the earnings displayed on the site are? This is mainly for companies like ManyVids or NiteFlirt that don't issue 1099s.
Example, if I had a bad month where I didn't hit payout, followed by a good month where I did hit payout:
ManyVids December 2020 earnings = $5
ManyVids January 2021 earnings = $100
Manyvids PAYOUT January 2021 = $105 (dec + jan combined)
When I go to do my 2020 taxes, would I base my income off what I EARNED ($5 in Dec. 2020) or when it hit my bank account ($105, Jan 2021, and then become 2021 taxes instead of 2020)
I hope this makes sense!
ALSO for example let's say I STARTED an OnlyFans in December 2020 and made $1,000, but didn't get the payout until January 2021. Would that money be in my 2020 taxes, or my 2021 taxes?
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
Whatever is on your 1099 is what you need to report. You should talk to an accountant . My accountant is LGBTQ friendly, and I think that's why she's so cool to me about sex work. I ask her questions all the time and she doesn't charge me except when I actually file. I'd give you her number, but I think it's better to find one in your home state. I'm sure the other models will have some advice, but I feel better handing it all over to my accountant. I don't want to give the IRS any reason to fuck with me over some little bullshit I didn't know about. She's just a book keeper and tax preparer. You'll pay more for an accountant with a 4 year degree from a prestigious university. I'd start calling around some local tax preparers and see if they can help. Especially in the working class part of town I found good accountants-they are less judgmental.
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
When you receive your money you set aside 25% to 30% of your earnings for taxes.
Canada never get a 1099 .. So this is what I do.
Money lands in my hands or account and 25% to 30% goes into a savings account for taxes.
I file using turbo tax.
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
Quote:
Originally Posted by
minniesoporno
When you receive your money you set aside 25% to 30% of your earnings for taxes.
Canada never get a 1099 .. So this is what I do.
Money lands in my hands or account and 25% to 30% goes into a savings account for taxes.
I file using turbo tax.
Thanks! That's what I've been doing but I also keep a spreadsheet of every site I'm on. I used to list it on spreadsheets by earnings via the site, but sometimes it's easier just to look up the payout information since it's one single number per payout (rather than showing every transaction for that month via earnings).
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
I generally use the "payment issue / check issue date" for tax purposes, which for many companies is consistent with the day it hits my bank account via direct deposit, but not always. This is what most companies seem to use to calculate my 1099s. Are you able to see that info anywhere on the sites you use that don't issue 1099s? It's basically whenever *they* process/send your payment, not necessarily when it specifically hits your bank account.
For example I didn't count the last two pay periods on Streamate as 2020 income, because the paycheck for the week of 12/20-12/26 was issued on January 1, 2021 and the paycheck for the week of 12/27 to 1/2 was issued on January 8th. IWantClips' last pay period ended on December 27th, and that was processed on December 30th according to their site, so I included that in 2020 income. Both of those situations were consistent with what each respective site included on my 1099.
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
Quote:
Originally Posted by
anonamiss
It's basically whenever *they* process/send your payment, not necessarily when it specifically hits your bank account.
Oh yes this is the information I've been using! I go by when sites issue a payment, but they also have 'earnings' separately that show earlier dates when something was purchased, but the site hadn't paid out yet.
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
i got my degree in acctg and did some personal income tax filing workshops for lower income people and the way we were trained to handle income received was when the income was received (if it makes it easier to think about it that way)...SM has their way they have to handle taxes for when we earned it...we also have our way we handle it when we actually receive the income. think about accounts receivable that goes into default. you wouldnt want to pay tax on income you haven't receive yet (i'm not a cpa...2 classes shy so verify with a licensed professional please)
reason for edit: to explain tax workshop since my acctg degree isn't involved with personal tax and i wanted the experience
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
Somewhere on the small business tax forms is a question asking for your accounting method: cash or accrual. Accrual accounting records earnings and expenses on the date they're earned or incurred. Cash accounting records earnings and expenses on the date they're actually received or paid. Both are valid, you just need to make sure you pick one and use the same method consistently (so things aren't accidentally recorded twice or not at all). Most small businesses use cash accounting, it's much simpler that way!
Re: Taxes - Earnings listed on site vs. when the money hits your bank account?
Quote:
Originally Posted by
innocentindian
Thanks! That's what I've been doing but I also keep a spreadsheet of every site I'm on. I used to list it on spreadsheets by earnings via the site, but sometimes it's easier just to look up the payout information since it's one single number per payout (rather than showing every transaction for that month via earnings).
Because I am in Canada I have to keep my own records and I also have to convert what I earn into Canadian dollars for tax purposes.
So I go by what is paid to me in USD and then my bookkeeping software converts it to Canadian dollars.
Then save 25% to 30% for taxes.
Then also on top of that recording keeping for taxes I also have to send a report for my disability benefits. They only care about what money I actually have not what's promised to me some time in whatever future.
So I've been tracking it with www.waveapps.com