OnlyFans Business Expense Guide

What can I claim for Only Fans Business?

Running an OnlyFans business involves unique expenses, and it's crucial to differentiate between deductible business expenses and private costs. Here’s a detailed guide to help you navigate through what you can claim and what you should be cautious about:

Deductible Business Expenses for OnlyFans

1. Home Office Expenses:

   • Portion of Rent/Mortgage Interest: You can claim a percentage of your rent or mortgage interest based on the area of your home used for business purposes. For example, if your bedroom used for filming constitutes 10% of your home’s total area, you can claim 10% of your rent or mortgage interest.  Talk to us about your mortgage interest deductions, there could be capital gains issues to consider.
   • Utilities: Similarly, a portion of your electricity, heating, cooling, and internet expenses can be claimed. Keep detailed records of your usage and calculate the business proportion.
   • Depreciation of Office Furniture and Equipment: Items like desks, beds, chairs, lighting, cameras, and computers used for business can be depreciated over their useful life.

2. Production Costs:

   • Costumes and Props: Outfits, lingerie, and props specifically purchased for your OnlyFans content are deductible. Ensure these items are used exclusively for business to avoid private expense issues.
   • Makeup and Hair Products: These can be claimed if used exclusively for creating content. Keep receipts and document the purpose of each purchase.
   • Filming Equipment: Cameras, tripods, lighting, microphones, and other filming equipment are deductible. Keep records of the purchase and usage.

3. Marketing and Advertising:

   • Social Media Ads: Expenses for promoting your OnlyFans account on social media platforms are deductible.
   • Website Hosting and Domain Fees: If you have a personal website to drive traffic to your OnlyFans, the associated hosting and domain costs are deductible.

4. Professional Services:

   • Legal and Accounting Fees: Costs for legal advice, contracts, and accounting services related to your business are tax deductible.
   • Subscription Services: Software subscriptions for video editing, photo editing, and other business tools can be claimed as a tax deduction.

Non-Deductible Private Costs

1. Personal Grooming:

   • General Haircuts and Manicures: These are considered private expenses unless they are specifically for a business-related shoot and not used outside of business.
   • General Clothing: Everyday clothing, even if worn during filming, is not deductible unless it is a costume or has a direct business purpose.

2. Living Expenses:

   • General Rent and Utilities: Only the portion of rent and utilities that directly relates to your business area can be claimed.
   • Food and Personal Items: Meals, groceries, and other personal items are not tax deductible.

Example Tax Deductions

1. Example 1: Home Office Expense

   • Scenario: Your home is 100 square meters, and the bedroom used for filming is 10 square meters.
   • Deduction: If your monthly rent is $2,000, you can claim 10% (10/100) of the rent as a business expense, which is $200 per month.

2. Example 2: Production Costs

   • Scenario: You purchase a new camera for $1,500 and a lighting setup for $500, both used exclusively for filming OnlyFans content.
   • Deduction: The total cost of $2,000 can be claimed as a business expense. If the items have a useful life of 5 years, you can depreciate them over this period.

3. Example 3: Marketing and Advertising

   • Scenario: You spend $300 on Instagram ads to promote your OnlyFans account.
   • Deduction: The full $300 can be claimed as a business expense.

What to Watch Out For

1. Record Keeping:

   • Detailed Records: Maintain detailed records of all business expenses, including receipts, invoices, and proof of payment.
   • Logbook for Home Office: Keep a logbook to track the time and space used for business activities.

2. Apportionment:

   • Business vs. Private Use: Ensure that any expense claimed is appropriately apportioned between business and private use. For example, if a piece of equipment is used 70% for business and 30% for personal use, only 70% of the cost is tax deductible.

3. Documentation:

   • Purpose of Expenses: Clearly document the business purpose of each expense. For example, note that a particular outfit was purchased specifically for a themed shoot.

4. Professional Advice:

   • Consult a Gotax Tax Professional: Given the unique nature of your business, it may be beneficial to consult with a Gotax tax professional to ensure compliance with tax regulations and to maximise your tax deductions.

eCashbooks

Easy bookkeeping software to support your business. eCashbooks dead easy to use.

By maintaining accurate records and clearly distinguishing between business and private expenses, you can effectively manage your tax obligations and ensure you claim all eligible deductions. If you have any more questions or need further assistance, feel free to ask Gotax.

Tax Returns

Look no further than Gotax for all your tax needs. Bas and yearly tax returns.  Tell us about your business and we'll contact you.