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Thread: Help - Taxes (search function to no avail)

  1. #1
    Veteran Member Brilynne's Avatar
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    Default Help - Taxes (search function to no avail)

    I've been camming since the end of January, although very inconsistently until late. i feel like I should be paying taxes by this point, but I have no idea what to do.

    Are there any forms I need? Do I get anything sent to me by MFC? I've seen some sort of form mentioned around here if i'm recalling right, but I don't know what it is, where to get it, or what to do with it once I do find it..

    I basically am completely clueless on how to get started paying taxes. If someone could point me in the right direction, you'll have my undying gratitude
    ~We Be Hustlin', Bitches Be Hatin'~





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    Veteran Member Starxx's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    I wouldn't worry about it until early next year when it's time to file.

    MFC will send you a 1099 and you'll take that to a tax person. Do NOT go to H&R block.

    You'll get a fine for not paying your estimated taxes this year but it's not a big deal, it'll probably be a 100-200 fine. More or less depending on how much you made for the year.

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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by Starxx View Post

    You'll get a fine for not paying your estimated taxes this year but it's not a big deal, it'll probably be a 100-200 fine. More or less depending on how much you made for the year.
    I did go to an accountant for last year's taxes and yes they do want u to pay an estimated tax........
    But how can u estimate what u will make , this is not a regular 5-9 job where u know exactly how much you will make... there is no way to estimate camming money..
    How do u do this?
    Im suppose to do it, but cant estimate!
    I guess i'll be penalized again, oh well.

  4. #4
    Member AmeliaBelle's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    I've been working for myself as an independent contractor for several years (only camming for a few months). Although it's ideal to make estimated tax payments every quarter, I usually wait until April, just before the deadline, and file my taxes once a year. I use turbo-tax and it really helps. Just answer all the questions and it will calculate your taxes for you. Don't use the free version, though. You'll need to use the Deluxe edition because the free version doesn't calculate self-employment or small business taxes. It costs $49.95 to file your taxes with the program, but it has ALWAYS been accurate for me and much cheaper than going to an accountant.

    Make sure to have all of your 1099's on hand. Even if you work for a company that doesn't issue a 1099 (such as SM), you still need to report this income in case of an audit. Also, keep ALL your receipts for anything that can be deducted - basically anything you can claim you used for camming such as makeup, lingerie, computer accessories, etc. In Turbo Tax, you'll be asked to list your expenses and also calculate the space in your "home office," which should be a room in your home used exclusively for camming. It explains how to do this in the program, and you can deduct a percentage of your household bills such as electricty and internet to help lower your tax bill even more. So, make sure you keep all of your bill receipts to make it easier on yourself.

    In the end, you WILL owe taxes, but after all your deductions, it's not as much as you think, especially if you qualify for certain tax credits. I usually end up owing about $800 to $1000 a year. Also, the IRS will allow you to enter into a payment plan if you can't afford to pay all your taxes due by the April 15 deadline.

    If you want to pay taxes every quarter, here's a link to the IRS tax form, estimated tax calculation worksheet and voucher you need to send in:



    Estimated taxes are due April, June, September and January, although the exact date varies from year to year. (See the worksheet above.)

    I hope this helps you out some! I know it can be really confusing when you're just starting out with your own taxes. Good luck!

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    God/dess Cam_Model_Jess's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    I agree with almost everything said above. I've been doing my own taxes for years, have only been a cam model for a year, but since I don't use the TurboTax program and just fill out all the forms myself, I learn a lot about why we're doing certain things, etc. When I was done doing my taxes last year, I took it to H&R Block on their free 2nd look day, so I didn't have to pay anything. The lady was very helpful and found some more money for me. I didn't owe that much in taxes because I had only started camming part way thru the year.

    But if you've been camming since Jan and haven't paid any taxes, then please don't expect it to be a very small fine. If you've made good money camming, then you're going to owe a lot of taxes and the fine will be bigger (but not huge). You said you've been doing it inconsistently tho, so I don't really know what that means or how much you're making. Let's say you make $1000-$1500/week, then your estimate income is around $55-68,000 and you'll be paying around $1,000-2,300 per QUARTER (that means 4 times per year). I'm using a range of incomes here. If, at the end of the year, you owe the federal government more than $1,000, you'll need to pay a penalty and interest on that amount (anything over $1,000). There is an estimated tax form (posted by someone else) and it's a little bit complicated because you have to calculate social security and medicare taxes, but you can get through it.

    Since MFC will send you a 1099, it will be easier to do taxes at the end of the year. But for the estimation part, you basically have to estimate what you'll make all year, divide that number by four, and plug that into a worksheet. What would also work? Just pay 33% taxes and you'll be safe... or nearly so. It's not very scary and you can always just pay the penalty. You're not making enough money for them to put you in jail

    Also, find out what the rules for your state are. Where I lived, anything over $500 owed to the state had to be paid quarterly. States will vary.

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    God/dess sammii's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    I thought you didn't have to pay estimated quarterly taxes for your first year ... maybe I'm wrong. I also thought the deadline was in January.

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    Member AmeliaBelle's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    I've never heard of a first-year exemption on quarterly taxes, although I guess it would be more difficult to estimate your earnings during your first year.

    The deadline to pay your estimated taxes for the last quarter of the previous year is in January of the next year; the deadline to pay your taxes in full is April 15.

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    God/dess sammii's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    ^ Oh, okay. So you just pay yours in April and you haven't had a problem with the IRS? Do you cam or dance?

    Btw, according to your document by the IRS it says "Exception. You do not have to pay estimated tax for 2011 if you were a U.S. citizen or resident alien for all of 2010 and you had no tax liability for the full 12-month 2010 tax year. You had no tax liability in 2010 if your total tax was zero or you did not have to file an income tax return." OP still has to pay her taxes; I'm just assuming this means she can pay in April instead of quarterly without penalties.
    Last edited by sammii; 08-24-2011 at 03:32 PM.

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    Veteran Member Starxx's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by Fridays View Post
    I did go to an accountant for last year's taxes and yes they do want u to pay an estimated tax........
    But how can u estimate what u will make , this is not a regular 5-9 job where u know exactly how much you will make... there is no way to estimate camming money..
    How do u do this?
    Im suppose to do it, but cant estimate!
    I guess i'll be penalized again, oh well.
    Did your accountant give you any forms for your estimated taxes?

    I know what you mean though since what we make yearly is all over the place. I think they just base it off your last years income. I know this year I'm paying my estimated taxes but it is based on what I made on MFC last year. I've already made double that this year. So come tax time I'll just have to pay more. Or if you are the opposite and made less than your previous year & you over pay on your estimated taxes than I imagine you'd get money back.

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    Veteran Member Brilynne's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    Thank you guys so much. I'm thinking I should get an accountant or someone because I feel like I'll get confused especially since I only just quit my day job which had taxes taken out of each paycheck.
    When should I expect to get the 1099?
    ~We Be Hustlin', Bitches Be Hatin'~





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    Member AmeliaBelle's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by sammii View Post
    ^ Oh, okay. So you just pay yours in April and you haven't had a problem with the IRS? Do you cam or dance?

    Btw, according to your document by the IRS it says "Exception. You do not have to pay estimated tax for 2011 if you were a U.S. citizen or resident alien for all of 2010 and you had no tax liability for the full 12-month 2010 tax year. You had no tax liability in 2010 if your total tax was zero or you did not have to file an income tax return." OP still has to pay her taxes; I'm just assuming this means she can pay in April instead of quarterly without penalties.
    Yeah, I pay them yearly and I DO have to pay a penalty, but the IRS has never given me any problems. I had to set up a payment plan for my first year, but they really don't care as long as you pay your previous year's taxes by April 15. (It's just more money for them when you have to pay penalties.) I am currently camming, but I've worked as a freelance writer for several years and this is always the way I've done it.

    I've never read that section of the document, but yeah, that makes sense. It looks like she can definitely pay in April instead of quarterly without a penalty. I wish that still applied to me!

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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by sammii View Post
    Btw, according to your document by the IRS it says "Exception. You do not have to pay estimated tax for 2011 if you were a U.S. citizen or resident alien for all of 2010 and you had no tax liability for the full 12-month 2010 tax year. You had no tax liability in 2010 if your total tax was zero or you did not have to file an income tax return." OP still has to pay her taxes; I'm just assuming this means she can pay in April instead of quarterly without penalties.
    They key to not doing something wrong is to read closely.

    Translation of the quoted passage: You do not have to pay an estimate tax in 2011 if you didn't make any money in 2010 because we have no way to know what you'll make in 2011. Pay us estimated taxes in 2011 if you made ANY money in 2010.

    (In that translation, I'm assuming you had enough income in 2010 to owe taxes. Some people do not owe taxes because they do not make enough money. So if you made money in 2010 but not enough to have to pay any taxes, then you don't have to make estimated payments in 2011.)

    To estimate your income, just use last year's income to make the first payment. Then, if you notice that your income has drastically increased, increase your estimate and increase your payment. For example, I was only camming part of the year last year & had a crappy part-time job. Most of the taxes were taken out of my checks at the part-time job, so I didn't make any estimated payments until January. When I went to have my taxes done the accountant told me to make a small payment so I made a $1000 payment in Jan. In April (when I did my final taxes) I only owed $40 in fees.

    The beginning few months of the year, my income improved because I was doing a lot better online, so I called my H & R Block lady and told her the approx. increase in income monthly and we figured out how much I should pay. The payment had nearly doubled. So I sent in a new payment. They don't even really care how much you send, in truth, and it can be a different amount each time. You can even make as many payments as you want. Let's say you have trouble sending money and want to send a check every month or every two months, that's fine. As long as you don't owe more than $1000 by the end of tax year (April). But if you don't mind paying the penalties, then just ignore all this until March and take it to someone to handle for you. C'est la vie.

    Toodles

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    Senior Member SSxxx's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    I am so confused about this tax thing!

    I have been camming for 3 months and had not worked for years before that. My taxes are filed as a couple with my husband. He does have taxes withheld from his job.

    I didn't make any money last year, but my husband did of course. At the same time, taxes are being withheld from his part of the income. At the end, with deductions an all, we used to end up always getting a refund but taxes were paid. Surely that will no longer happen.

    Do I need to pay the estimated taxes on my camming income because last year, by filing as a couple, "I" paid taxes?

    By filing as a couple, can the amount that is being withheld from my husband's income count as taxes withheld for me too?

    I am so in the dark about this income tax thing that I don't even know if what I am saying makes sense, but if anyone here who has been camming for a few years files taxes as a couple, maybe I can get some help.

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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by sammii View Post
    I didn't cam until 2011 and neither did the OP, so I did read it closely ... obviously; it's not hard to figure out what it means. I'm not sure why you "assumed" I owed anything in 2010; how would you know?

    FYI, I didn't owe any taxes in 2010. I only worked a part-time job where they withheld taxes.
    I wouldn't know. I "assumed" for the purpose of an easy translation since the majority of US citizens owe taxes. It doesn't matter when you started camming; it matters if you made any money doing anything in 2010 where you owed taxes, whether or not they were withheld by a company.

    I didn't reply to this thread to start a fight. I replied to try to help someone. But since it seems like you're getting pissed at me for reasons I cannot comprehend, I'm gonna bow out of this one and move on. I'm sure you'll all figure it out and get it straightened out. Got nothing but love for you ladies.

    Good luck. Peace.

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    Default Re: Help - Taxes (search function to no avail)

    thank you for everyone who's shared tax info here.

    i lost my part time job last year and started camming, but didn't make enough camming to owe much. it's been a few years since i owed taxes from self-employment work so i'm a bit nervous about filing this year, and also because i'm sure i'm probably going to owe a small fine for not paying quarterly...and i'm freaking out a bit because i will need to start paying quarterly next year. but i am majorly reassured that there are folks on here who use turbo tax for camming and have no problems (i've always used it for other self-employment stuff but again it's been a couple years since that was relevant and i have a horrible memory ).

    and i just got a home office so i can actually take advantage of those deductions now!

    question - when you do send in quarterly payments, how do you keep track of them to make sure you're not overpaying at the end of the year? do you list them when you file your taxes so that they are taken into account?

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    Default Re: Help - Taxes (search function to no avail)

    ^ Sent you a PM, tinydancer.

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    Featured Member tinydancer23's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    thanks! i pmed you back but i'm not sure if it went through, lol. i'll send it again.

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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by tinydancer23 View Post
    thanks! i pmed you back but i'm not sure if it went through, lol. i'll send it again.
    Got it. Thanks.

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    Default Re: Help - Taxes (search function to no avail)

    covers just about everything involved re paying estimated federal and state income taxes for a 'single' person.

    However, if you are married and are now adding a second income to a 'joint' tax return, be prepared for some surprises. About the only thing that stays the same between being single and being married is the 15.3% Social Security / Medicare tax that will apply to every dollar of your webcam income.

    The major difference stems from the fact that, as a second income earner on a 'joint' tax return, unlike a single person you can't claim any additional exemptions.

    Next major difference is that, unlike a single person, your first dollar of earnings is taxed at the same percentage as your husband's last dollar of earnings ... and the progressive tax rates only go up from there. Consider a simplistic example where the husband earns $40k per year and the newly webcamming wife earns an additional $20k per year. Prior to the webcam earnings, the husband's federal income tax bracket would have been around 12%. But every dollar of webcam earnings will fall in the 15% federal tax bracket. Same is true of state income taxes, if you live in a state that levees their own income tax.

    And yes, the payment of estimated taxes ... either by the husband's paycheck withholding or by the webcam girl's quarterly vouchers and checks ... is effectively shared between the married persons in the same way that the income itself is shared for IRS purposes.

    I don't know how much webcam income you're likely to earn during 2011, but as a second earner it's pretty certain that 30% of those earnings are going to be due with your April 2012 tax return filing. And with the first year exemption from filing estimated taxes running out, when April 2012 arrives you'll also owe a first quarter estimated tax payment equal to about 30% of the amount of money you earn during January, February and March of 2012. If the $20k per year figure is accurate, that means something like $6,700 on 2011 webcam income plus another $ 1,700 on first quarter 2012 webcam income, both due and payable at the same time i.e. April 15th 2012. This might be offset up or down by your husband's tax liability and the amount of estimated taxes your husband has withheld from his paychecks. This might also be offset downward if the higher combined income level disqualifies you from tax credits you were previously able to take advantage of.

    ~
    Last edited by Melonie; 08-25-2011 at 04:56 PM.

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    Senior Member SSxxx's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    Thx Melonie.

    I am still confused but that gives me an idea of how bad this is going to be. I am SCARED!

    My husband makes more than 40K (more like 60k+) and, even though I started camming in the last week of May, about 3 weeks into that I started making 1k plus a week. I am going to end up 2011 with probably around 30k+ a year.

    QUOTE:
    "And yes, the payment of estimated taxes ... either by the husband's paycheck withholding or by the webcam girl's quarterly vouchers and checks ... is effectively shared between the married persons in the same way that the income itself is shared for IRS purposes.

    I don't know how much webcam income you're likely to earn during 2011, but as a second earner it's pretty certain that 30% of those earnings are going to be due with your April 2012 tax return filing. And with the first year exemption from filing estimated taxes running out, when April 2012 arrives you'll also owe a first quarter estimated tax payment equal to about 30% of the amount of money you earn during January, February and March of 2012."

    So, I guess that means I should do the estimated taxes payment?

    I have never had to deal with income taxes here in the US before. I mean, I hadn't worked in years and any other time I worked, it was at a regular job where taxes were withheld. At tax time, I just gave my husband my 1099 and he did the taxes using TurboTax.

    I live in CA and will owe state taxes too. Is there a form for paying estimated stated taxes? Is the deadline the same, I mean 9/15?

    I'll read the other thread you mentioned and see if I can learn a bit more.
    Last edited by SSxxx; 08-26-2011 at 07:24 PM.

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    Veteran Member Brilynne's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    Thanks for all your responses. Although I am admittedly feeling a bit overwhelmed!
    ~We Be Hustlin', Bitches Be Hatin'~





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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by sammii View Post
    I thought you didn't have to pay estimated quarterly taxes for your first year ... maybe I'm wrong. I also thought the deadline was in January.

    This is true since your first year will give you an estimation.

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    Default Re: Help - Taxes (search function to no avail)

    Quote Originally Posted by Cam_Model_Jess View Post
    I wouldn't know. I "assumed" for the purpose of an easy translation since the majority of US citizens owe taxes. It doesn't matter when you started camming; it matters if you made any money doing anything in 2010 where you owed taxes, whether or not they were withheld by a company.

    I didn't reply to this thread to start a fight. I replied to try to help someone. But since it seems like you're getting pissed at me for reasons I cannot comprehend, I'm gonna bow out of this one and move on. I'm sure you'll all figure it out and get it straightened out. Got nothing but love for you ladies.

    Good luck. Peace.
    I wasn't trying to start anything. I guess I just took it the wrong way ... I thought you were trying to say that I was reading it wrong. Sorry.
    Quote Originally Posted by Brilynne View Post
    Thanks for all your responses. Although I am admittedly feeling a bit overwhelmed!
    Same.

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    Default Re: Help - Taxes (search function to no avail)

    My husband makes more than 40K (more like 60k+) and, even though I started camming in the last week of May, about 3 weeks into that I started making 1k plus a week. I am going to end up 2011 with probably around 30k+ a year.
    That provides a bit more data to work with. The federal income tax rate for joint returns jumps from 15% to 25% when combined earnings hit the $69k level. So given your figures, besides the 15% Social Security / medicare tax rate applying to all $30k of your camming income ( = $ 4,500 annual ), while the first $9k of your income will be taxed at 15% ( = 1,300 annual ) the next $21k of your income will be taxed at 25% ( = $5,300 ). If your husband's paycheck withholding resulted in say a $2,000 refund last year, next April 15th you can expect to pay in ( $4.5k+$1.3k+$5.3k-$2k ) = $9,100 to the IRS based on your 2011 webcam earnings. Additionally, first quarter 2012 estimated tax payment is due at the same time and will probably require that you pay in an additional $11,100 / 4 = $ 2,800.

    And yes living in California you'll also have to pay both income taxes and estimated taxes to the Cal FTB. While the California tax tables are complicated, it's clear that this year that the 6% tax rate jumps to 8% at the $70k combined earnings level for joint returns. So 2011 state income taxes on your webcam income would be something like 6% on the first $10k of earnings = $600 + 8% on the next $20k of earnings = $1,600 ... or $2,200 annual, which would also be due on April 15th. Additionally you would also need to pay 1st quarter 2012 estimated state taxes on the same date of $2,200 / 4 or $ 600.

    Totalling it all up, if you choose not to make estimated tax payments to either the IRS or the Cal FTB in September of 2011 ( for income earned in June, July and August ) and January 2012 ( for income earned in Sept, Oct, Nov and Dec of 2011 ), you should be prepared to shell out something on the order of $9,100 + $2,800 = $11,900 to the IRS next April, as well as shelling out an additional $2,200 + $600 = $2,800 to the Cal FTB. And as was mentioned above, once 2012 arrives and your first year exemption expires you will absolutely be required to make estimated tax payments in April 2012 ( on income earned in Jan, Feb and March of 2012) . So cash wise, next April 15th it would be necessary to cough up a total of $11,900 + $2,800 = $14,700 ... and that assumes of course that, had you not started doing webcam, your husband's income versus withholding situation would have generated a $2,000 'refund' that can now be applied against the taxes that YOU will owe next April 15th.

    Just for purposes of perspective, living in California and filing joint your own $30k in expected annual webcam earnings before taxes shrinks down to something like $30k-$11.1k-$2.2k = $ 16,700 after taxes ... a de-facto 44% overall tax rate. This unfortunate situation is often referred to as the 'marriage penalty' since your own annual webcam earnings would have been taxed at significantly lower rates were you able to file as a single person.

    Again, my numbers are just a rough estimate. There are a lot of individual situation related tax variables re personal deductions, number of exemptions, tax credits etc. that may improve my numbers. But on the flip side, if your 2012 earnings from webcam will be based on $1000 a week = $50k annual, the estimated tax payments and de-facto tax rates will be even higher than those I calculated based on $30k annual. For example, a 9.3% California tax rate kicks in at the $90k combined earnings level.

    And the California estimated tax form you asked about is a 540-ES


    I'll also add that while strip club dancers are supposed to report all of their dancing earnings, if they choose to 'fudge the numbers' there usually isn't any solid paper trail of 1099's or other independently generated official earnings reports to contradict their 'fudged' earnings. But for better or worse, every single dollar of webcam earnings WILL be independently reported via 1099's, and the IRS and state income tax agencies WILL expect taxes to be paid on every single dollar of that income. Therefore it's very important that webcam girls keep good records of their earnings as well as good records of their expenses ( plus receipts ).

    Last point ... it's bad enough that every dollar of webcam earnings will be reported and taxed. It's even worse, however, if webcam girls don't exercise proper financial discipline regarding the setting aside of 'tax withholding' money and regarding the filing / payment of timely estimated taxes ... because after the first year exemption expires this can add a 1/2% per month = 7% annualized under-withholding penalty on top of the taxes you already owe, plus add an additional 4-5% in interest charges on any taxes owed on April 15th which can't be immediately paid ( due to failure to set aside the necessary cash ) and thus must be 'financed' via an IRS 'payment plan'. If you let yourself fall into that tax 'trap' you may very well wind up paying 50% of every webcam dollar you earn right back out again to the IRS and state tax agencies.

    While this is especially important for married dancers, it is of significant benefit to single webcam girls as well. I highly recommend opening a new bank account that will be exclusively used for webcam money. As webcam checks come in, deposit them in this new business account. Then knowing your approximate de-facto tax rate ( like the above mentioned 44%), you can transfer out 100-44= 56% of the amount of each check into your 'personal' account at the same bank ... which you can then use to write checks / pay bills / withdraw at an ATM etc. However, any expenditures that are webcam related ( i.e. purchasing a new camera, purchasing new outfits for use on webcam etc. ) can be drawn directly from the new business account. Doing this not only provides assurance that you have set aside the necessary amount of money for webcam income taxes, but it also segregates your business transactions from your personal finances ... which can be extremely helpful when filing annual tax returns, and which can be VERY important if you are ever audited by the IRS or your state income tax agency.


    I'm happy to help you or any other webcam girls on tax questions ... but to be fair to the Webcam Forum the best way to address tax and financial issues is to post a new thread in the Dollar Den.

    ~
    Last edited by Melonie; 08-27-2011 at 04:43 AM.

  30. #25
    Featured Member EvilChick1989's Avatar
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    Default Re: Help - Taxes (search function to no avail)

    I am so dumb. I never understood any of this. I have been caming off and on since 2009 and have not paid taxes. I move around too much and to different states to fine a accountant. So I could just hire any personal accountant? Sorry


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