If you are an OnlyFans creator making money from your content, understanding tax obligations is essential. If you operate as a partnership, you will likely need to file Form 1065, also known as the U.S. Return of Partnership Income. This tax form reports your business income, deductions, and overall earnings so the IRS can track your partnership’s tax liability.
Many OnlyFans creators collaborate with others, whether as co-owners of a content creation business or as part of a multi-member LLC. If that applies to you, Form 1065 is a key part of your tax filing process.
What Is Form 1065
Form 1065 is the tax return used by partnerships and multi-member LLCs to report their business income to the IRS. Unlike a sole proprietorship, which files taxes using Schedule C, a partnership does not pay income tax at the business level. Instead, it is a pass-through entity, meaning each partner reports their share of the business’s income, deductions, and tax credits on their individual tax returns.
Who Needs to File Form 1065
You need to file Form 1065 if your OnlyFans business operates as
- A general partnership with two or more people
- A limited partnership where one or more partners have limited liability
- A multi-member LLC taxed as a partnership
- A foreign partnership that does business in the U.S.
- A domestic partnership that receives income in the U.S.
If you are a sole proprietor or a single-member LLC, you do not need to file Form 1065. Instead, you will report your business income on Schedule C of your tax return.
Components of Form 1065
Filing Form 1065 requires detailed reporting of your partnership’s income earned, expenses, and taxable income. Here is what is included
| Section | Purpose |
|---|---|
| Part I | Reports gross income, business expenses, and net income. |
| Part II | Lists partnership items like profits and credits distributed to partners. |
| Schedule B | Includes questions about foreign partnerships, tax ID numbers, and ownership changes. |
| Schedule K | Summarizes the partnership’s income, deductions, and tax credits. |
| Schedule K 1 | Details each partner’s share of the partnership’s profits and tax obligations. |
Each partner receives a Schedule K 1, which they must use when filing their personal tax return.
Step-by-Step Guide to Completing Form 1065
Filing Form 1065 can feel overwhelming, but breaking it down into steps helps
Step 1 Gather Necessary Information
Before filling out Form 1065, you will need
- Employer Identification Number EIN also called a Tax ID
- Business income and expense records
- Balance sheet and profit loss statement
- Details of business expenses like equipment, software, and marketing costs
- Partnership agreement outlining profit loss distribution
Step 2 Complete the General Information Section
Enter your partnership’s
- Name and EIN
- The tax year-ended date is typically December 31
- Business activity description such as online content creation
Step 3 Report Income and Deductions
- Enter your gross income from OnlyFans and any other revenue sources
- Deduct business expenses such as OnlyFans tax write-offs, content creation costs, and marketing
Step 4 Complete Schedule K and Schedule K 1
- Schedule K reports the partnership’s profits, credits, and deductions
- Schedule K 1 is given to each partner, showing their share of the business’s net income
Step 5 Review and Submit
- Double-check calculations to avoid extra costs from errors
- File the form electronically or via mail
Deadlines and Penalties
The due date for filing Form 1065 depends on your partnership’s tax year
- For most partnerships, the deadline is March 15
- If the date falls on a weekend or holiday, the deadline shifts to the next business day
- Partnerships can file for an extension, moving the deadline to September 15
Penalties for Late Filing
- 210 dollars per month per partner if the partnership fails to file on time
- Additional fines if errors are not corrected promptly
Tax Obligations for OnlyFans Creators in Partnerships
Self Employment Taxes
Since partnerships do not withhold taxes, each partner must pay self employment taxes Social Security, and Medicare on their share of partnership income.
Common Tax Deductions for OnlyFans Creators
OnlyFans creators can deduct business expenses such as
- Equipment cameras, lighting, microphones
- Subscription services editing software, website hosting
- Marketing and advertising
- Home office expenses
- Costumes and props
- Travel costs for business-related trips
Using these tax deductions can lower your taxable income, reducing the amount you need to pay.
FAQs
Do I need to file Form 1065 if I make money on OnlyFans?
You must file Form 1065 if your business is a partnership or a multi-member LLC. This form reports your business income and expenses to the IRS. If you are a sole proprietor, you will report your income using Schedule C instead.
How does a partnership pay income tax?
A partnership itself does not pay income tax at the business level. Instead, profits and losses pass through to individual partners, who report their share on their tax returns. Each partner is responsible for paying self-employment taxes on their earnings.
What happens if I do not file Form 1065 on time?
Your partnership faces a penalty of 210 dollars per partner per month for late filing. The IRS will continue adding penalties for each additional month the form is not submitted. Late filing may also lead to further tax issues, including audits or interest on unpaid amounts.
What tax write-offs can I use as an OnlyFans creator?
You can deduct business expenses such as equipment, website hosting, marketing, and content creation costs. Other eligible deductions include home office expenses, software subscriptions, and travel related to business. These write-offs help lower your taxable income and reduce the amount you owe in taxes.
Conclusion
If you operate an OnlyFans business as a partnership, filing a partnership tax return using Form 1065 is a necessary step in meeting your tax obligations. The IRS requires you to pay taxes on your OnlyFans income, and this form helps track your adjusted gross income for reporting purposes. Failing to file on time can lead to penalties, so keeping detailed records of earnings, deductions, and expenses is essential for compliance.
To avoid issues with small business taxes, maintain accurate records of payments, expenses, and income throughout the year. Filing Form 1065 before the due date ensures your partnership remains in good standing and prevents unnecessary fines. If you are unsure about the filing process, working with a tax professional can provide peace of mind. They can help you maximize your tax deductions while ensuring you stay compliant with IRS regulations.
Your path to complete financial prosperity begins now. To master the art of tax planning and transform your future financial outlook at tax time, contact The OnlyFans Accountant for a free consultation. Want to learn how to maximize deductions, track expenses like a pro, save more, and navigate tax season like a boss? Get your FREE copy of our eBook.
Need assistance or guidance with completing your OnlyFans taxes? Call us today! Our experts are ready to help you navigate your tax obligations and maximize your deductions.