26 Feb The advantages of creating an S-Corp as a sex worker
Posted
in Industry Knowledge
There are too many things to list stacked against as sex workers; we’re easy targets for the mainstream to pin the blame on, our work is stigmatized and shamed, and it’s all too common that financial institutions, lenders, landlords, etc., come down on us purely for what we choose to do with our content and our bodies. The first two are issues that will need time and acceptance to fix, but we can work around the last part by playing the same game as our corporate overlords. We’re part of a multi-billion dollar a year industry, after all. I’m going to go over the basics of incorporating yourself, specifically as an S-Corp, and the advantages that come with it.
WHAT IS AN S-CORP?
An S-Corp is a special corporate structure specifically designed to avoid the double taxation of other business structures. If you’ve filed taxes as an independent sex worker, you know how much that sucks. What it boils down to is that you and your corporation are two completely separate entities as far as taxes are concerned. Yay! Your corporation is taxed based on profits, losses, and expenses. You’re only responsible for taxes on your salary, which is loosely defined as a reasonable percentage of corporate profits in a given year. Thankfully, an S-Corp has much more freedom with what can be written off as a business expense, easily putting you well above the standard deduction for an individual taxpayer in the US.
It’s important to note that forming and maintaining a corporation is more complicated and expensive than going at it as a sole proprietor. You’ll have to keep up with strict filing deadlines and keep very good records. Some states make this more difficult than others, but you can get a digital address in a business-friendly state like Delaware to register your company in to reap the benefits of lax corporate oversight. Tesla and Manyvids are two big names who choose Delaware as their base of operations for that exact reason.
WHAT ARE THE BENEFITS?
Having your own business, in general, gives you access to business-exclusive credit cards, bank accounts, and services, which gives you a lot more room for investing in yourself and makes keeping track of expenses much easier. All those toys and outfits you’re using on cam or in a video? Put them on your card. Traveling to a convention? That’s all business. Anything you spend on promo for your social media or fan sites qualifies. Even writing off big chunks of your rent, phone, and internet draws much less attention when you’re doing so as a corporation than it would on your own.
The most important deductible expense to mention in our case is platform commissions. You can certainly try to swing it as an individual, but as a corporation, you’re completely in the clear to do so. Really, you sell your product for $10, and a customer purchases it for $10; the platform takes 20%-40% off the top, and you get what’s left. That commission doesn’t appear as taxable income on your 1099, but it counts as a loss. So write that massive L off into a fat W.
A wonderful benefit that isn’t directly financial is the massive advantage of being able to put your own company on your resume for any future career moves. Everything we do to keep ourselves going is impressive: marketing, advertising, sales. Even more impressive is when we’re doing it for our *Normal Sounding Business, Inc.* as President or Head of Operations. Now, you can really drill those skills down in your job description.
That’s about it for the basics. Remember, (S)he who controls the spice controls the universe.
You can find more thorough information and applications on SBA.gov.
Riley Cyriis is a New England-based indie content creator and mortician. She owns Cyriis Studios with her partner, Ryan Cyriis. She’s a cult survivor, a heavily-armed liberal, and the enemy of corruption and greed.
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There are too many things to list stacked against as sex workers; we’re easy targets for the mainstream to pin the blame on, our work is stigmatized and shamed, and it’s all too common that financial institutions, lenders, landlords, etc., come down on us purely for what we choose to do with our content and our bodies. The first two are issues that will need time and acceptance to fix, but we can work around the last part by playing the same game as our corporate overlords. We’re part of a multi-billion dollar a year industry, after all. I’m going to go over the basics of incorporating yourself, specifically as an S-Corp, and the advantages that come with it.
WHAT IS AN S-CORP?
An S-Corp is a special corporate structure specifically designed to avoid the double taxation of other business structures. If you’ve filed taxes as an independent sex worker, you know how much that sucks. What it boils down to is that you and your corporation are two completely separate entities as far as taxes are concerned. Yay! Your corporation is taxed based on profits, losses, and expenses. You’re only responsible for taxes on your salary, which is loosely defined as a reasonable percentage of corporate profits in a given year. Thankfully, an S-Corp has much more freedom with what can be written off as a business expense, easily putting you well above the standard deduction for an individual taxpayer in the US.
It’s important to note that forming and maintaining a corporation is more complicated and expensive than going at it as a sole proprietor. You’ll have to keep up with strict filing deadlines and keep very good records. Some states make this more difficult than others, but you can get a digital address in a business-friendly state like Delaware to register your company in to reap the benefits of lax corporate oversight. Tesla and Manyvids are two big names who choose Delaware as their base of operations for that exact reason.
WHAT ARE THE BENEFITS?
Having your own business, in general, gives you access to business-exclusive credit cards, bank accounts, and services, which gives you a lot more room for investing in yourself and makes keeping track of expenses much easier. All those toys and outfits you’re using on cam or in a video? Put them on your card. Traveling to a convention? That’s all business. Anything you spend on promo for your social media or fan sites qualifies. Even writing off big chunks of your rent, phone, and internet draws much less attention when you’re doing so as a corporation than it would on your own.
The most important deductible expense to mention in our case is platform commissions. You can certainly try to swing it as an individual, but as a corporation, you’re completely in the clear to do so. Really, you sell your product for $10, and a customer purchases it for $10; the platform takes 20%-40% off the top, and you get what’s left. That commission doesn’t appear as taxable income on your 1099, but it counts as a loss. So write that massive L off into a fat W.
A wonderful benefit that isn’t directly financial is the massive advantage of being able to put your own company on your resume for any future career moves. Everything we do to keep ourselves going is impressive: marketing, advertising, sales. Even more impressive is when we’re doing it for our *Normal Sounding Business, Inc.* as President or Head of Operations. Now, you can really drill those skills down in your job description.
That’s about it for the basics. Remember, (S)he who controls the spice controls the universe.
You can find more thorough information and applications on SBA.gov.
Riley Cyriis is a New England-based indie content creator and mortician. She owns Cyriis Studios with her partner, Ryan Cyriis. She’s a cult survivor, a heavily-armed liberal, and the enemy of corruption and greed.
