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Like all other professionals, OnlyFans creators and other workers in the sex industry are obligated to pay their taxes.
When you take on sex work, or become an OnlyFans creator, it is essential that you register your business with the Canada Revenue Agency (CRA), accurately report your revenue, know which forms you need, collect and remit GST/HST, know which expenses you can deduct, deduct them properly, and file your taxes by the correct due date. The reality is, not filing or misfiling taxes can cost you exorbitant fees and long-term headaches, which is why it’s important to work with someone who specializes in OnlyFans taxes to ensure your tax returns are properly prepared.
If you’re a sex worker, OnlyFans creator, or an accountant retained by a worker in these professions, you don’t need a high-priced tax lawyer. Sam Faris is a licensed CPA specializing in sex work and OnlyFans taxation issues. Whatever tax help you need, including audit representation and filing years of unreported tax returns, Sam Faris can help.
Overview of the Sex Industry in Canada
Sex work is the exchange of sexual services for goods or money. The income from this industry is considerable when compared to regular 9-5 jobs. Just like in any other country, Canadian sex workers must pay taxes on their income and also need to understand their legal and tax obligations to the government. It is critical that OnlyFans creators pay their taxes on time and correctly, and Sam Faris can help ensure this.
Moreover, if you are self-employed, then Goods and Services Tax (GST) obligations will likely arise. If this applies to you, then you must also register for a GST account and charge GST taxes (in addition to provincial taxes, such as Harmonized Sales Tax in Ontario).
Sex Work as a Source of Taxable Income
The term “sex worker” refers to individuals working in the sex industry to earn an income. It covers a wide range of services, which we’ll cover in greater detail below. These individuals are considered professionals in their own way, and it is how they earn their income.
Services in the sex industry include the following:
Phone sex operators
A phone sex operator is a type of sex worker who provides pleasure through the phone. The operator must be able to sexually stimulate his or her client through a provocative and sensual script. Phone sex may take on varied forms, such as sexual sounds, guided fantasies, and discussions of very intimate and sensitive sexual topics.
Erotic Dancers
These dancers provide erotic entertainment with the goal of provoking sexual thoughts and actions and are usually clothed. Erotic dance has several categories, such as social dance, performance dance, participation dance, competitive dance, and ceremonial dance.
Sex-Toy Makers
Whether alone or with a partner, some people get aroused with the aid of sex toys, which can range from dildos and vibrators to oils, lotions, and lubricants.
Strippers
These dancers offer another level of pleasure when dancing. Usually, strippers, or exotic dancers, wear a small piece of clothing or are completely nude when performing on stage. Strippers also dance in a provocative or seductive manner to arouse their audience.
Pornographic Actors
These types of actors are sex workers who perform different sexual acts or role-play according to one’s fantasies. It can be soft porn or hardcore porn, which includes sexual penetration. Some sex workers establish large audiences through platforms like OnlyFans.
Webcam Models
A webcam model is a video entertainer whose performance is generally streamed via the Internet to a live audience. Of course, the audience is composed of people who are paying to watch the model perform various sexual acts.
Prostitutes
While some prostitutes offer sex for pay, there are some prostitutes who provide escort services to their clients, which includes accompanying the client to a social event but not having sex.
OnlyFans started in 2016 with the goal of helping content creators monetize their content while simultaneously developing good relationships with their fanbase.
Whether a sex worker operates legally or otherwise, one may wonder if their income is taxable. Canada does not shy away from taxing someone even if the income is earned in a legal gray area. Whether you are a small-time sex worker or one who has already made a mark in the sex industry, you need to pay taxes for the earnings from your sex work or OnlyFans account. These tax obligations can be nuanced, so it’s important to work with a professional who can ensure all obligations are met.
Canadian content creators receive 80% of their OnlyFans revenue, while 20% is kept by the platform. When it is time to claim taxes, the creator must report the full 100%. Content creators can then claim the 20% in Line 8871 of form T2125, Statement of Business or Professional Activities, which is for Management and administration fees – IF they are filing self-employment, partnership, or professional income. This is just one example of the tax reporting obligations that require the help of a professional.
Canadian Income-Tax Implications for Self-Employed Sex Workers
As discussed earlier, even if the sex worker’s income is made in a legally ambiguous way, it is taxable, and the expenses are also deductible. When it comes to reporting income or claim expenses, the worker must file an income tax return, and the deadline to file the return depends on whether the sex worker operates the business as a sole proprietor or a corporation. Make sure to consult Sam Faris before filing OnlyFans taxes, as there are numerous tax-reporting differences between these business structures, and the wrong choice will cause you to pay more in taxes than you need to.
Canadian Income-Tax Returns for an Incorporated Business in the Sex Industry
In the event that the sex worker is operating the business as a corporation, it is the responsibility of the corporation to file the T2 Corporation Income Tax Return within 6 months from the end of the corporation’s taxation year because a corporation can have an off-calendar tax year.
The amount owed in taxes must be paid within two months after the end of the taxation year. If, however, the corporation qualifies for a small business deduction, then payment may be delayed by a month.
A Common Tax Scenario for Sex Workers & OnlyFans Models
There are scenarios where a sex worker or an OnlyFans creator may earn a substantial income for several years but, despite their success, be unaware of their tax obligations or unsure how to report this income to the CRA. Sam Faris has helped individuals in this situation countless times and can support you if you are experiencing something similar.
As time passes, this unreported income can continue building, creating a growing concern about potential back taxes, interest, penalties, and even the possibility of an audit or prosecution for tax evasion.
The CRA can discover this unreported income before a taxpayer has a chance to come forward.
How to Avoid Penalties for Unreported Sex Work & OnlyFans Income
Sam Faris is a seasoned CPA with extensive experience in handling tax issues related to sex work and OnlyFans taxes. He understands the delicate nature of these cases and is equipped to address unreported income without taxpayers having to face severe penalties or prosecution, or pay high-priced lawyer’s fees.
In this type of scenario, Sam can help you take advantage of the CRA’s Voluntary Disclosures Program (VDP), which allows taxpayers to correct past tax errors or omissions. By proactively disclosing unreported income through the VDP, a sex worker can avoid the harsh penalties and legal consequences that might otherwise apply if the CRA discovers the issue on its own.
With Sam’s expert guidance and help, you too can navigate the VDP process smoothly. Sam will fill out the VDP application, organize paperwork, ensure all necessary information is accurately reported, file outstanding tax returns, negotiate a reduction in the interest owed, and successfully avoid any further penalties or prosecution. With Sam Faris’s assistance, you don’t have to worry about tax issues, and you get the best financial outcome possible.
Safety Tips for Sex Workers in Canada
Practice Safe Sex
Acquired immunodeficiency syndrome (AIDS) is one of the risks of being a sex worker. Practicing safe sex by using contraceptives is the best way to protect yourself.
Be Street Smart
For sex workers who are on the street, it is very important to prioritize their safety. Know where to go in case you don’t feel safe with your client.
Protect Your Identity
Some may perceive that being a sex worker is shameful. If you don’t want your family and friends to know about it, be sure to use a pseudonym and never share your personal information.
Pro Tip:
When you fill out your form T2125, which is the form in which you claim your expenses, you calculate your net income by subtracting your income from your costs. Make sure you’re taking advantage of all available deductions, rebates, credits, and benefits. Talk to Sam Faris today.
Canadian Income-Tax Returns for a Sole-Proprietor Business in the Sex Industry
For sex workers in Canada who are operating as sole proprietors, it is important to file the Canadian T1 General Income Tax Return. It should be filed on or before the 15th of June of the following year. However, unincorporated sex workers may be exempted from filing the tax. It may differ according to the situation. Speak to a professional to know for sure. Not doing so can lead to inaccurate tax returns, reassessments, back taxes, fines, interest, and other penalties.
GST/HST Obligations of Self-Employed Sex Workers
As a Canadian sex worker working as a freelancer, you’ll likely need to register for your GST/HST number. Those who need to register for this are freelancers who have earned at least 30,000 CAD as income in the last 4 (or fewer) consecutive quarters. After registering, a sex worker must now start charging their customers GST/HST and remit those taxes to the government.
Got Questions? Contact Faris CPA Today.
Not everyone understands the responsibilities of sex workers’ CRA taxes. If you are a Canadian citizen who is planning to enter the sex industry or become an OnlyFans model, it is best to contact Faris CPA first. Our proficient and experienced OnlyFans Tax specialists are here to help you with specific tax questions, tax planning, unfiled returns, audits and accounting.
Faris CPA is the only tax professional you need. Don’t waste another second thinking about your tax obligations; call us now!
Sex Workers & OnlyFans CRA Taxes for Canadians FAQs
Is prostitution legal in Canada?
The answer is a bit complex. Buying sexual services is illegal, but selling sexual services is not. Nonetheless, Canada collects taxes from sex workers.
Do you have to pay taxes on OnlyFans Canada?
Yes, it is your legal duty as a resident of Canada to pay taxes to the government on your income from OnlyFans..
What are the sex workers' rights in Canada?
Just like any individual, sex workers should be treated fairly and should not be discriminated.
