When you are deciding on whether or not cam modelling is right for you, then looking into the legal aspects of being your own boss. If you are not prepared to handle the legal side of camming, you can find yourself in a tight spot come tax time. I’m going to explain a few ways you can come out on top with your taxes and not find yourself owing a ton of money at the end of the year.
The number one, most important thing every model needs to understand is that taxes are not taken out of your paycheck each pay period as they would at a traditional job.
You are responsible for doing this! The best way to ensure you have enough put aside every year is to put back a percentage of your earnings every pay period. DO NOT SPEND THIS! You are going to be giving it to the IRS at the end of the year. Some models put back more than others, but it is always better to have more put aside than you think will be necessary. If you don’t end up giving it to the IRS, then it’s like having some savings put away or even like getting a tax return!
But how much is enough? A rule of thumb I, personally, go by is to put back 30% of my paycheck. That is before anything else is considered… period! By putting back this amount, I easily end up with a few extra bucks that I either invest or just put away for a rainy day. There are many investment options for you to choose from, too! You can do stocks if you are a bit of a risk-taker, short-term and long-term bonds if you are more conservative, or simply buy toys and outfits for your camming room!
Another thing you should consider doing, though it is not a must, is to keep track of all of your expenses! Save your internet bills and all of your receipts for everything you bought for your webcam business. This includes outfits, toys, makeup, and camming equipment like your computer, webcam, wireless mouse and keyboard, even the lamps and light bulbs you use in your room! Anything that you have spent money on that year that you utilize to cam! You can even save receipts from manicures, pedicures, hair dying, and tanning since these things are necessary for you to look and do your best on cam!
If you are renting a space to cam in, make sure you have a receipt for that, as well! All of these items can be deducted to give you a smaller tax bill at the end of the year. This is called Itemized Deductions and I highly recommend doing this!
The last thing you need to consider when you get your paycheck is 401k and savings. Being a cam model means you have an expiration date. Do you see yourself camming when you’re 50? There are some out there, don’t get me wrong, but the truth is aging happens and there is only a small niche for the granny fetish! Since you are your own boss, you need to put back money for retirement. I suggest using 10% of your income for this. Take 5% and invest it into stocks or bonds, and take the other 5% to put back in savings. If you want to invest more, great! But let 10% be a minimum that is set aside. Better safe than sorry!