Independent Camgirls Gotta Pay Taxes
Since I just finished wrapping up the oh-so-fun task of doing my taxes last week I figured this would be a good time to write about the responsibilities that we independent camgirls regarding taxes. As tax laws differ from nation to nation obviously you’ll need to research the laws in your own jurisdiction, but please know that independent camgirls gotta pay tax. I observe some independent camgirls who seem to assume that if they aren’t being paid by a company that they don’t need to declare that income, but this mentality couldn’t be further from the truth. Even setting aside the ethical issue of each of us paying our fair share for participation in a civilized society, not declaring income can set up independent camgirls for a whole host of legal and financial difficulties down the road.
As Independent Camgirls Our Incomes Are Traceable
If you work online and accept electronic payments from customers for skype cam sex shows and content, the payments you receive are impossible to hide. There is always an electronic record of the transfer of money from our customers to our financial accounts (eg: bank accounts, payoneer accounts, etc) so if you opt not to declare your income and end up getting audited it would be quite easy for your government to discover your undeclared earnings. Under-reporting taxes can result in huge penalties and interest charges that greatly exceed any tax you would have owed had you just declared your income in the first place.
Benefits of Declaring Income
Beyond the ‘downside’ of having to pay tax on our earnings as independent camgirls, there are a whole host of benefits that come along with declaring income honestly. One such benefit emerges when it comes to large ‘milestone’ purchases. Let’s say you’re saving for a down payment on your first home or want to buy a new car or rent your first apartment, in all these cases your financial records will be factored into your ability to pay for what you seek to purchase or rent. If you declare your income, you can also deposit large sums into savings accounts without worry that the government will question where all this money is coming from. If you want to enjoy your life and secure your future you need to keep ‘clean’ financially, as making a large purchase will raise red flags is your reported income is significantly less than your actual purchasing power or savings account balances.
For independent camgirls who are in school, have children or are in a low income bracket, declaring income can actually result in a net financial benefit, in that by filing taxes you will be eligible for tax breaks and tax credits that you won’t receive if you don’t file.
How to Set Money Aside for Expected Taxes
In general, it’s advised that all camgirls (not just independent camgirls) set aside 30-35% of our earnings each week/month to a specific ‘tax fund’ so that when tax time rolls around you won’t struggle to come up with the tax monies owing. Bear in mid however that if you are earning well (eg: 2k per week or more consistently) you’d be wise to set aside more than that. One way to estimate how much money you will end up owing come tax time is to look over your earnings records and extrapolate that over the year. Then consult tax bracket calculators online to get a rough sense of what your tax responsibility will end up being. It’s always better to over-save than to be left without necessary funds, so err on the side of saving too much than too little for taxes. If your taxes end up being less than you thought you end up with a nice little boost to your personal savings accounts, so it’s a win/win to save more than you expect you’ll need.
Many camgirls who do not set aside money for taxes end up with a great deal of stress come tax time, as they find themselves without the funds necessary to pay what they owe. The biggest mistake I see many camgirls make is in assuming that the whole of each paycheck is disposable income, for each of us to use however we wish. Nothing could be further from the truth, in that unlike those who receive paychecks as employees (and thus have state, federal tax etc deducted automatically from each paycheck), as independent camgirls we are NOT employees of any company and receive our payments with no such deductions. It’s our responsibility to set part of each payment we receive in anticipation of the taxes we will be required to pay at a later date.
If this is your first year as a camgirl, you don’t need to make quarterly tax payments, although if you are an American camgirl do anticipate that you will be required to make quarterly tax payments during your second year as an independent contractor and each year thereafter. In Canada the rules are slightly different, and camgirls need not make quarterly tax payments unless notified to do so by Canada Revenue.
For further reading on taxes as they relate to camgirls (including independent camgirls), visit the tax authority website for your jurisdiction (eg: the IRS, HM Revenue & Customs or Canada Revenue for American, UK and Canadian independent camgirls, respectively). Do not get caught in the misconception that just because we as independent camgirls do not receive earnings statements (such as 1099′s) from cam sites that we are free and clear of paying tax on our earnings. What we earn is traceable and it’s impossible to live a good life and plan (and save!) for your future without declaring your income. The risks of not doing so just aren’t worth it.
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