Tips for webcam model - How to prepare tax
Tax filling is complicated and troublesome. This page covers how to prepare Tax filling for US based cam girl and cam girl working for U.S based site from abroad.
First of all, is webcam model required tax filling?
Yes, you have to report all of your earning to IRS as long as you are living in U.S or U.S citizen as long as you make more than $400 in the tax period. If you are not U.S citizen and not living in U.S but working for U.S based site or agency, you are not required to file tax return to U.S government. But you have to submit W-8 form to the site or the agency you work with. Also you have to report to your country where you live. If you do not submit W-8 form to the site or agency, they are required to withhold 30% of your income by law. So, please make sure you do so.
What is webcam model tax classification and which form to submit?
It depends on what condition you are working on but most of cam girls is classified as "self employed independent contractor". The exception is if you work for studio and they control time and what to do, you are most likely to be classified as "employee" in which your studio owners have to give you W-2 form by the end of tax period.
In the case of Independent contractor, you are subject to pay self employed tax which you need to submit Schedule C (Form 1040) or Schedule C-EZ (Form 1040).
C-EZ (Form 1040) is simpler form of Schedule C. In order to submit Schedule C-EZ following criteria needs to be met.
- Had business expenses of $5,000 or less
- Only used the cash method for accounting purposes (no accrual method of accounting for property or items)
- Not had a net loss
- Not claimed their house for business use
- Not experienced depreciation on items used in the business (such as computers or studio set for camming.)
You'll also need to complete Schedule SE (Form 1040) with Schedule C or C-EZ.
What tax do I need to pay and how?
For self employed cam girl, you need to pay social security and medicare tax on top of income tax. For social security 12.4% and medicare tax 2.9%, you have to pay 15.3% on net earnings up to $127,200. After $200,000, medicare tax goes up to 3.8%. If you are filling jointly with your spouse, medicare tax becomes 3.8% after $250,000 net income. Here is income tax rate bracket.
|Rate||Taxable Income Bracket||Tax Owed|
|$0 to $9,325||10% of Taxable Income|
|$9,325 to $37,950||$932.50 plus 15% of the excess over $9325|
|$37,950 to $91,900||$5,226.25 plus 25% of the excess over $37,950|
|$91,900 to $191,650||$18,713.75 plus 28% of the excess over $91,900|
|$191,650 to $416,700||$46,643.75 plus 33% of the excess over $191,650|
|$416,700 to $418,400||$120,910.25 plus 35% of the excess over $416,700|
|$418,400+||$121,505.25 plus 39.6% of the excess over $418,400|
|Rate||Taxable Income Bracket||Tax Owed|
|$0 to $18,650||10% of taxable income|
|$18,650 to $75,900||$1,865 plus 15% of the excess over $18,650|
|$75,900 to $153,100||$10,452.50 plus 25% of the excess over $75,900|
|$153,100 to $233,350||$29,752.50 plus 28% of the excess over $153,100|
|$233,350 to $416,700||$52,222.50 plus 33% of the excess over $233,350|
|$416,700 to $470,700||$112,728 plus 35% of the excess over $416,700|
|$470,700+||$131,628 plus 39.6% of the excess over $470,700|
If you expect to owe more than $1000 tax payment by end of tax year, you are required to report estimated tax return quarterly. Failure to pay estimated tax result in 0.5% penalty on unpaid tax each month and 5$ penalty on top of 0.5% each month.
For estimated tax return, you use Form 1040-ES.
What can be deductible expence?
Great thing about internet modeling from your home is that you can deduct some of your living expense.
- Percentage of your rent, mortgage payments, renters insurance/ home owner insurance heat, electricity, gas, water, internet, phone bill, apartment repair.
Although, you can deduct those, you can not deduct 100%.
Here is the common way to figure out how much you can deduct.
*Divide the area (length multiplied by width) used for camming work by the total area of the property. If the rooms in the property are all about the same size, divide the number of rooms used for business by the total number of rooms. The percentage is the one that you can deduct for all of them above.
Mailing Supplies – Envelopes, stamps, etc.
Accounting Fees Alterations
Cleaning (costumes you used for camming)
Insurance on Equipment
Interest on Business loans
Repairs for equipment
Equipment Purchases (Only if purchased and used for camming purpose)
Travel experiences(only if the trip was taken for business purpose such as events for cam girl)
Public Transportation Fees
Red flag if you deduct those
Cloths(If the clothes are something you can not wear outside, you can deduct)
Shoes(same as above)
The reason why those are red flag is that all of above can be considered as personal use. As long as they can be considered for personal use, IRS would not approve those expenses as your webcam modeling expenses.
Brest augmentation for cam girl can be deductible?
The breast implants is not usually deductible. But there is one case that IRS approved the breast augmentation as business expense. There was exotic dancer named Chesty love who claimed her implants was necessary for her business. The court determined that the size of breast implants is not suitable for ordinary life. Her case can be read at here. In the case that you are planning to deduct the costs of breast augmentation, the size of silicon have to be more than 1000cc.
If what you paid for is only for webcam modeling job related expenses, you can pretty much deduct them. But you need to have an evidence to prove that your expense is specific to your webcam modeling work. You need to keep your receipt for 7 years for the case of audit.