PSOs & Income Taxes

For tax purposes, you are either an employee (with income/compensation reported on a W-2) or an independent contractor (with income/compensation over $600 per year reported on a 1099).

If you are employed by a phone sex company, you’ll proceed with your W-2, like any other job.

However, as an independent PSO — whether or not you receive a 1099 — you’ll prepare your taxes as any other contractor, free-lancer or self-employed person: by using a Schedule C (or Schedule C-EZ), paying your own self-employment taxes. This includes, but is no limited to, monies generated from calls and other services, tips & gifts from clients, works sold (erotic stories, photos, etc.) as well as any income from your blog or website, such as affiliate programs. If no 1099s are sent to you, use deposit amounts in your own checking account.

Don’t forget, there are deductions you can take for running a small &/or home business.

For job title or field you can simply state customer service or telecommunications.

If your concerned about how to file taxes as a self-employed person, check with a professional accountant. (You can tell them the same thing; your income is because you are self-employed in telecommunications, perform work on the internet (i.e. are a “blogger’), etc. If you are seriously worried about how to proceed as a person in the adult industry, search for accountants who specialize in the adult entertainment industry, i.e. Google “adult industry tax accountant”.

NOTE: An update on 1099s which will affect independent PSOs this year: Merchant Card and Third Party Network Payments (1099K).

Also see info regarding gifts & taxes.

Is this your first time here? You may wish to read this post and my Statement Of Purpose.

Yes, I am on Twitter! @PhoneSexSecrets

4 thoughts on “PSOs & Income Taxes

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  3. Tricia

    Your first sentence stating, “For tax purposes, you are either an employee (with income/compensation reported on a W-2) or an independent contractor (with income/compensation over $600 per year reported on a 1099)” is incorrect.

    There is also a third category and that is self-employed business owner. I have my own phone sex business. I work a few platforms and also have a number of my own phone sex sites that I run. I am not an employee nor am I am independent contractor.

    The 1099 you’re referring to in your post is a 1099-Misc. Yes, some phone sex companies who hire operators as independent contractors use 1099-Misc at tax time. Niteflirt, though, uses a 1099-K and that’s totally different. Flirts who work on NF are self-employed business owners (even though a lot of them think they are independent contractors). Niteflirt DOES NOT contract with us. We merely use them as a third-party processor to run our phone sex businesses. The flirts who make $20,000 or more each year will receive a 1099-K from NF at tax time.

    The best piece of advice I can give to anyone just getting into this business is to ALWAYS consult with a tax professional. Don’t rely on info you get from the internet. There’s a lot of misinformation out there.

    Reply
    1. Phone Sex Secrets Post author

      Trica, despite your negative tone & my suspicion that you are only posting here trolling for the ability to spam later, I am approving your comment. Don’t make me regret it.

      Had you actually read the entire post, you would have seen the update regarding what was then the new 1099 K option.

      Remember, there’s a lot of good information on the Internet; you just have to read to harvest it.

      Lynn

      Reply

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