Adult Site Broker Talk Episode 210 with Katherine Studley of The Only Consultant

This is Bruce Friedman of Adult Site Broker and welcome to Adult Site Broker Talk where each week we interview one of the movers and shakers of the adult industry and we give you a tip on buying and selling websites. This week we’ll be speaking with Katherine Studley of the only consultant. Would you like an easy way to make a lot of money? Send sellers or buyers to us at Adult Site Broker through our affiliate program, ASB Cash. When you refer business to us, you’ll receive 20% of our broker commission on all sales that result from that referral for life. You can make $100,000 or more on only one sale for some of our listings. Check out ASB Cash dot com for more details and to sign up. At Adult Site Broker, we’re proud to announce our latest project, thewaronporn.com. You’ll find articles from industry websites as well as mainstream publications from around the world. It’s designed to raise awareness of our industry’s plight in the war on porn and the numerous attacks on our industry and online free speech by hate groups, the religious right, and politicians. You’ll find all that and more at thewaronporn.com. We’ve also added an events section to our website at adultsidebroker.com. Now you can get information on B2B events on our site as well as special discounts reserved for our clients. Go to adultsidebroker.com for more details. Now time for our property of the week that’s for sale at Adult Site Broker. We’ve reduced the price on our network of sites in the Bukake and Gangbang niches. They’ve been in business since 2009 when the first site came online. The owner shoots his own content in swingers clubs in his local area. He’d be available for a period of time to shoot content and train someone to take his place doing production. The content model is brilliant. Guys pay for entrance to the club and this pays for the talent and the production of the content as well as the money going to the club owner. So the content cost is zero. Yes, you heard right. The website income has been consistent and continues to grow. The websites and content make this a perfect turnkey business for anyone looking to own their own pay sites or for a larger company. Here’s a huge opportunity for growth. Now only $199,000. Now time for this week’s interview. My guest today on Adult Site Broker Talk is Katherine Studley of The Only Consultant. Katherine thanks for being with us today on Adult Site Broker Talk. Thank you so much for having me. I’m excited to be here. I’m excited to have you. Katherine was raised in Buffalo, New York. She’s a tax accountant by trade and a creative in essence. In 2021, she founded The Only Consultant, a judgment free consulting firm dedicated to providing tax and financial advice to adult creators, exotic dancers and other creative freelancers looking for a non-traditional tax experience. She had the idea while scrambling eggs with $400 in her bank account. That’ll give you ideas. Despite having no prior experience in entrepreneurship or the adult industry, it became clear there was an overwhelming need for straightforward, compassionate and judgment free financial help in our industry. Her client list quickly grew to hundreds of small businesses. In 2022, she founded Prisma Tax Group to help her clients achieve financial success and peace of mind. By focusing on innovation, collaboration and empowerment, they’re not your typical accounting firm. At the time, she founded the company she was employed by a government contractor in Virginia when she stumbled upon OnlyFans through TikTok. Her initial idea was to create a brand that would sell an e-book. However, as she marketed on social media, she found that people weren’t looking for an e-book. Instead, they were in search of an accountant. Over the first two years, she offered her consulting services for free while outsourcing the tax return preparation to a small tax firm where she had previously worked. By November 2022, it was time to grow, lean her to establish her own tax firm, Prisma Tax Group, alongside a business partner. By July 2023, she purchased his share, becoming the sole owner of both ventures. Their innovative approach in the accounting industry stems from compensating contractors with a percentage of the tax return preparation revenue and operating remotely, ensuring deadlines are met while maintaining flexible hours. In the adult industry, their innovation is evident as few accountants are willing to engage with this business. Her strategy involves being hands-on with clients, traveling extensively to meet them in person and build trust. Currently, she provides tax services, bookkeeping, LLC and S-Corp formation, and tax consulting services. Her vision is to expand into life and health insurance, real estate, and any other services her clients may need, aiming to become the only consultant they’ll ever need. Thus the name. You can find them at theonlyconsultant.com. So Catherine, how’d you like your commercial? Loved it. Thank you so much. My best. Love the plug. Great. Catherine, can you tell us about your journey into specializing in taxes for the adult industry? What inspired you to choose this path? Yes. So, I am a traditional tax accountant by trade. I have a degree in accounting. I worked for a couple of years at CPA firms in Buffalo, and I was honestly having a very bad time, and I thought, okay, I never want to work in tax ever again. And that was until, like you said, I found only fans on TikTok, and I said, okay, these creators and influencers are earning income on a 1099 for the first time ever. And I could be the person that’s going to be taking these taxes. So my journey has been unique because I’ve been learning everything from social media and learning from my clients as we’re going. Well that makes good sense. How did you gain your extensive knowledge of the adult industry and its specific accounting needs without having directly worked in the industry yourself? Yes. So that is something else unique is that I’ve actually never worked in sex work, and I really had no exposure to the adult industry before stumbling upon only fans in 2020. So like you said, initially I took all my calls for free for the first year. So it was kind of like a knowledge exchange in that clients would find the online book a call with me. I would tell them all about taxes, and then I would then ask them all about their business too. And you know, there’s a lot going on under the sex work umbrella. And that’s how I learned everything was pretty much just like a knowledge exchange, learning about everyone’s nuances of their businesses and the kinds of expenses that they have. What are unique expenses that sex workers have? I mean, it really depends on the niche, right? So that’s something that is specific to the industry. So a dominatrix is going to have different write offs than someone who’s working in fetism. With some chains, yes. Then a sugar baby, then a dancer. Yeah, exactly. So it takes also like having an understanding of how a strip club works to know that a tip out is a write off and so is a house fee. But a typical accountant maybe wouldn’t be so familiar with that. So it does take a level of intimacy with clients and trust to really dig into, you know, your small business and what would count as write off. So it’s very niche specific is what I would say. Gotcha. What are some of the unique challenges you face when providing tax services to clients in our industry? Well, like we talked about nuances in business expenses. So for example, fetism, creators that are stuffing themselves on camera, they’re eating on camera. The food that they are consuming is actually considered a supply and not a meal. The tax treatment is different for that. So if you didn’t have an understanding of the industry, then that’s something that wouldn’t be optimized on clients’ tax returns. Also there’s a lot of talk about this, but banks being shut down in the industry. There’s no secret that there is big banking discrimination in the sex work industry, which is something that I actually never knew about until I had all these clients calling me and saying that they’re getting shot out of their bank account and now their mortgage is lapsing and that quickly escalates to like a basic human rights issue. Like it’s so, so serious. So you know, that’s something that we’re not seeing in any other industry. And then just generally, I feel like there’s trust issues with accountants and other professionals because so many people have taken advantage of sex workers in, you know, this fashion. So I think a lot of people, you know, want to have a quick FaceTime with me or appreciate that my social media is as like authentic and transparent as it is, I guess. I’ve had a bank account shut down myself. Yeah, exactly. Right. And I did too. Actually, we lost our payroll provider because we’re working adjacent to the adult industry because that’s who we’re serving. So they not only dropped all of our clients, but also us as well. So isn’t that lovely. And I’ll tell you another story. I had an accountant friend of mine from the gym doing my taxes and he came to me. He was, he was, you know, pretty good friend and he was really kind of embarrassed by it. And he says, well, he says, the other partners in my firm, he, you know, they found out the industry you’re in and we’re going to have to drop you because we deal with school districts and we can’t take a chance at them finding out. Oh, wow. Yeah. I would say I’m surprised, but not, not after a couple of years out here. I’m not surprised. Yeah. Nothing surprises me. The other thing about banks and you were at the LA show, that’s where we met. Keep in mind that, and I saw you at the, at the FSC seminar that they’re trying to establish a credit union, which isn’t that fantastic. Huge deal. That’d be such a game changer. And I know that they have a survey too. So if you’re listening to us, we should link the survey so that people can fill that out. Yeah. Free speech coalition.com. The survey is right there. And Allison Bowden, Mike Stabil, they’re just doing such a marvelous job for our industry in so many ways, not only trying to strike down these age verification laws, foster SESTA, among other things, but they’re also trying to get us equity in banking, which is just amazing and everyone should support them. Are there any common misconceptions about the adult industry or about taxation within the business that you’d like to address? I mean, I guess a lot of people think that people in the adult industry aren’t paying taxes. You know, people think, oh my gosh, dancers are paying taxes, porn stars pay taxes. Like, yeah, of course. It’s self-employment income, you’re earning 10.99. That’s really the biggest one, you know, is that people are paying taxes, but they are. And it’s the same tax treatment as anyone else who is self-employed, realtor, insurance broker, hairstylist, taxes are the same. Yeah. And what do you find that the other accountants think about people in the adult industry? Misconceptions they have about us. Well, I mean, the first thing that everyone asks is, are your clients even sophisticated enough to understand taxes? So like, if they’re paying taxes, like, can they possibly even understand how they work? And then I just think there’s a lot of like tasteless comments and jokes, you know, that I’m not really super impressed with. But when I initially started this and I was on LinkedIn looking for accountants, no one wanted to take the work. And now that, you know, only fans in adult content creation is more mainstream and the world is kind of shifting in their views a little, you know, now people are more interested in the influencers. Yeah, exactly. But I don’t think they’re really taking the time to understand like the sex work is greater than just content creation. There’s many layers to this. Yeah, absolutely. Let’s face it with the tax code being what it is, who the hell understands it, you know? The IRS keeps changing it. They keep piting the ball. So we won’t understand it. It’s by design. We know this. Yep, exactly. It’s so true. It’s so true. It’s one of the most complicated tax systems. Absolutely. Without revealing confidential details, can you share a success story where you helped an adult industry client overcome a tax challenge? Yeah, so something that we do quite often actually is amend a client’s tax returns for previous years. So people will come in and they will have self filed or filed with us, you know, different accounting service and they’re just filing their 1099 but not their business expenses. So if you get a 1099 for 100 grand, but you had 30k in expenses, you’re only taxed on the 70k. But if you’re not taking your expenses and you’re leaving all that money in the table, so we’re amending for clients and sometimes getting them, you know, 10 to $30,000 refunds. So that is, yes, there’s a very good success story for clients. And then we’re also setting clients up with S corporations, having their LLC taxes, S courts, and then having themselves pay themselves on payroll. And that’s also saving, you know, between like $10,000 and $80,000 depending on the person. So there’s a lot of strategy to be had out here. Do you find the IRS has prejudice against our industry? No, I mean, not that I’m aware. The IRS is mostly concerned that you’re claiming your income and paying tax on it. It’s not so much like specific to industries that I know of. Yeah. Wouldn’t surprise me though. You know. Yeah. I mean, I think anything that’s all cash, I think that it just depends, it just depends on if they put the pieces together, I guess, depending on the expenses. Sure. If it’s, you know, some are 1099 and some people like dancers are all cash, right? Yeah. I think that you could be audited depending on where the 1099s are issued from potentially. Like if they could recognize maybe a string of sex work 1099s. And you think audits come from that? Potentially. I’m not sure, but I think that, yeah. Okay. How do you ensure privacy and discretion for your clients given the sensitive nature of our business? Yes. This is something that, you know, we do not take lightly and we’ve put a lot of thought into because privacy is huge. We have clients that are content creators and also NICU nurses. So there’s like an, again, an extra level of discretion here beyond just your regular accounting firm. So we’re completely remote business. We’re not meeting with clients in person. We’re getting all of your tax documents digitally. So all of our forms are end to end encrypted to start. You know, we have a whole network security team. We’re using VPNs. We have password managers. Like we’re checking all the boxes up and down as far as network security and privacy goes because this is just not something to mess around with in 2024. No. Absolutely. And privacy is even more important in this industry. So many people get outed. Exactly. And I mean, like the consequences are much heavier in this industry. No, they definitely are. And we recognize that. Could you describe the range of clients you work with in the adult industry and how their needs differ for more traditional sectors? So I mean, you know, I initially started this saying that this is judgment free tax preparation. And I mean that. So our first round of clients were only fans models. Then right after that, dancers found us and sugar babies. And now we’re pretty much working with everyone under the umbrella. So we’re working, you know, with clients that are doing in person work. We’re working with all kinds of dancers, feature dancers. I have girls that are in like Cirque du Soleil, Cam Girls, all kinds of content creators. Really just anyone who’s looking for a non-traditional tax experience. We can work with you. Talk about the journey from when you started to now with your firm. I mean, you’ve got to be blown away by the feedback and the amount of people who have come to you. Yeah. I mean, really, I like you said, I just had this idea when I was scrambling eggs and I just thought, wow, if I could make a thousand dollars off of this a month, that would be amazing. Like just to see if there was like proof of concept. Yeah. And then initially I started just an Instagram account and I went viral a couple of times and ended up in some publications. And then it just started to really gain momentum and then people were finding me. So initially I was cold damning everyone and then, yeah, somewhere along the lines then now I had a waiting list of tax clients, which has been absolutely amazing. But again, that’s how we’re learning everything is just different people that are meeting different kinds of tax help. And that’s how I’ve become familiar with all of the niches and the genres. And it’s all the communities are very tight knit as well. Oh, absolutely. You have a waiting list? Yeah, we do sometimes. So we like right now we’re not accepting any new clients until May 1st because we’re at capacity until we can get all the tax returns out. Interesting. Sounds like it’s time to grow again. That it is. Yes, sir. That’s our summer project. Yeah. You don’t want to leave money on the table now, do you? Exactly. How do you navigate the stigma associated with the adult industry when discussing financial and tax matters with clients or other professionals? I mean, to be honest, I’m pretty unbothered by it personally. You know, like I feel like on LinkedIn, I say this is what I am. This is what I’m about. Here’s the clients that I serve. This is the industry that we serve. You’re in or you’re out. You’re about it or you’re not. So I mean, you know, that’s pretty much how I’m dealing with other people in the finance industry. But I do have a couple of clients that I will use to vet other professionals. So if I’m thinking about referring business to a financial planner, just someone in health insurance, I kind of have like a few clients that I have meet with them first so they can let me know how that, you know, sits with them. They answered their questions. Okay. How that makes them feel. And that’s why I would, you know, use people from there. Have you been kind of surprised at the stigma that this industry has coming into it from the outside, especially how you’ve been treated? Yeah. I had absolutely no idea. I didn’t even realize what sex work was. I was like, oh, this is like, this makes complete sense. Of course, like here’s a group of people that need tax help. I’m just going to provide them tax help. I had no idea what the issues in banking and payment processing and being censored online. And you can’t even say, you know, hashtag spicy account. And like there’s so many nuances out here that I had no idea about. I really can’t believe it. I don’t think it makes any sense. And when I’m telling people that work in the vanilla industry about this, they really, they also can’t believe it. It’s not really something that’s discussed. Yeah. I mean, I’ve been, I’ve been banned on Facebook. I’ve been banned on LinkedIn. I was just banned on TikTok. I think I was banned on TikTok for the word porn star. Oh, definitely. It’s that sensitive. Yeah. And I mean, where’s it all going to end? It’s just absolutely crazy. You’d like to think in 2024 people get it, but they don’t seem to know definitely not. And it’s affecting clients bottom line because when, you know, you’re using TikTok to drive all of your traffic to your paid page and you’re getting banned on TikTok because it’s very sensitive about even like small words that you’re saying. It’s really affecting people’s lives. Absolutely is. You went to your first events this January. What was your impression of the events and what was your impression of the people in the industry that you met? Yes. So this year was my first year doing in person events. We were in Xbiz LA, then I went to X3 and then ABN. So it was amazing to meet everyone in person because I’ve had a lot of internet friends and internet clients for a long time. So just being able to meet everyone in person and just run into people was really great. Xbiz was great because all of those panels I thought were super enlightening, especially as I’m new to the industry. So that was just kind of like a crash course and everything. Also the networking events were great. Sorry, you know, I met you, right? All kinds of people, free speech coalition, pineapple supporters, all kinds of stuff. X3 was more of a fan show. So it seemed there’s not as much like business stuff going on. It was at the Hollywood Palladium. So I just sat on the top balcony and just kind of like watched everything. So that was interesting to watch. And a lot of clients I met there too. And then ABN was definitely an overstimulating experience. It was so, I mean, I heard it used to be bigger even than it was, but I was like, there is a lot going on here. But we did, yeah, all the panels and the parties and met a bunch of clients. So that was great as well. I’ll definitely be back to all of them. And then we’re heading to Xbiz Miami this year, just in a couple of weeks here. And I have nothing else, nothing else on the agenda, but we’ll see. Let’s see what the rest of 2024 brings. I should, I should give the disclaimer. We’re recording this in April. So Xbiz Miami will have already. Oh yeah. But no, it’s quite okay. It’s quite okay. How do you address or support mental health concerns with your clients? Yes, this is something that I’ve spent a lot of time considering as well because I’ve positioned myself online as a safe space and a judgment free space for, you know, for you to seek tax help. But I started to get a lot of calls outside of my scope and I really needed resources to send clients to. So for mental health, I’m sending clients to Ramina. She’s a Queens of the underworld. So like Dr. Monique, Pineapple Support, Cupcake Girls, like I have a whole list of resources really, just depending on the clients and what I think they need best. I have people that I can send them to, which is huge relief for all of us. Yeah. I’m the Cupcake Girls, Pineapple Support. I’m very familiar with Dr. Monique, had all of those people on the podcast and I’m a big advocate for mental health. And mental health in this industry is so important. We’ve unfortunately had a string of suicides of people in our industry and it’s just extremely sad and I know that these groups have done wonderful work to help prevent such things. Yeah, they’re doing amazing work. It’s an amazing support system. Yeah. And I think Pineapple Support, Cupcake Girls, they definitely need your support. So just like FSC, those are great charities to give to the nonprofits and the work that they do is just amazing. Just amazing. Yeah, I totally agree. Building trust is crucial in any client relationship. So how do you establish and maintain trust with new clients? I try to meet everyone in person if I can. That’s the first thing. If I can meet you, then I definitely will. I’m very transparent and authentic on social media. Even a little more than I am really comfortable with, but I think that by showing myself to clients, they feel more comfortable. They feel like they know me. So that’s something that I’m intentionally doing to build trust with clients. Yeah, and just build also personal relationships with them too. So just outside of your taxes. How are you actually? Like what other projects do you have going on? Just get to know people. Yeah. Have people been surprised at how cool an accountant can be? Yes. People are like, are you really an accountant? Are you sure you’re an accountant? I was like, well, accounting itself does not bring me joy. So I will say like the tax law does not bring me joy. My client base brings me joy. People. Yeah. So yeah, I am honored that people think that I’m a cool accountant and I do think I must be one of the cooler tax accountants. I don’t know if I can say the coolest, but confidently top five. Yeah. And again, when we seek professional help, whether it be an attorney, whether it be an accountant, whether it be a website broker, the help that we’re offered in this industry outside of the people in this industry is very limited or non-existent. Yeah. Which is something else that I didn’t realize either. No underserved. Yeah. You go to a mainstream attorney. First of all, they have no idea what you’re talking about. And second of all, most of them don’t even want adult industry clients. You go to a mainstream accountant. We talked about that. You know, they shun people in our industry. Go to a bank. They don’t want to deal with us. You go to a regular website broker. Most of them don’t deal in an adult. And even if they do, they don’t have a database on adults who cares, right? You know, nobody’s looking at their websites to buy adult sites. So overall in the mainstream world, somebody like yourself, I don’t know if you’ve thought about how important somebody like you is to people in the industry. Yeah. I mean, I appreciate that. And it is though, because taxes set the foundation for anything else that you want to do. It’s a quality of life thing. If all your taxes is purchasing power for you later, that’s how you can buy real estate. That’s how you can open a credit card and get a car note. It all starts with taxes. And if you’re not comfortable getting your taxes done, you don’t know where to go and no one understands your industry. It’s a huge issue. And unfortunately, it’s something that I see all the time. Talk about the other financial services that you offer and are going to be offering and how you’ll be able to help people in the industry where they can’t get the help or where they’re going to be uncomfortable getting the help elsewhere. Yeah, definitely. So, I mean, first of all, you can always book a consultation with me if you really have no idea how taxes work and you just want to talk for 25 minutes, I can just break it down for you. So that’s one thing, just like one-on-one consultations always available. We can also do your monthly bookkeeping. So you don’t have to be tracking your income and expenses all the time on your own. It’s something that we’d handle for you monthly, then also tax planning and strategy. Like, should you be an S-Corporation? If so, how much should you be paying yourself on payroll? Should you be contributing to a step IRA? Are there any credits that we’re missing here? Like the tax law is complicated by design, but there is a way to make it work for you. So that’s where tax planning and strategy can be beneficial. Yeah. And then we’re also working with clients on a monthly basis and helping with just tax preparation as well. Talk about incorporation. Should most creators and other adult industry companies be a corporation? So I’m not an attorney. This is not legal advice. This is a very high-level conversation that we can have. So an LLC is a business structure. It does not equal any tax savings. So it protects your personal liability if you’re a suit or if you go bankrupt. So if you’re in a contract, then I would recommend having an LLC. The tax benefits kick in once you have your LLC taxed as an S-Corporation, but it’s not for everyone because it really only makes sense once your self-employment profit, which is income less your expenses, is consistently around like $60,000 a year. So the answer is no, I don’t think that everyone that is a content creator should have a corporation off the bat because it could actually cost you more money to maintain the business than the tax savings would be. But if you are consistently profiting 65K or more and making hundreds of thousands of dollars and you’re just a sole proprietor, then you definitely have the S-Corporation. It’s interesting. You mentioned LLC and S-Corporation together. And LLC can be an S-Corporation? Yes. So an S-Corporation is actually not its own entity. You either have to have a corporation or an LLC first, and then you file an additional form to have it taxed as an S-Corporation. Yeah. The S-Corporation is a tax election status, actually. Interesting. So I had an S-Corporation, but I don’t think I had an LLC. You might have had a corporation first. That could have been the case. I don’t remember how he did it, but yeah, that was long ago. That was long ago and far away. You also mentioned IRAs. Are most of your clients doing such a thing for retirement? And should they be? Yeah, you definitely should be. As someone who is self-employed, you don’t have your employer to be setting up retirement plans for you. So it’s something that you have to do on your own. We do have several clients that are investing in setting up IRAs. It’s not really my specialty, honestly. We outsource, we refer you to a financial planner, and then we work with the financial planner to make sure that you’re contributing the correct amount to your IRA. But yeah, it’s a tax savings opportunity and a great opportunity to set your future self-up for success while saving on taxes and setting a retirement plan. In what ways have technology or innovative accounting practices enhanced your ability to serve your clients? Well, it has allowed us to be completely remote. In traditional tax firms back in the day, you had to go make an appointment and drop off your paperwork. Now we’re able to work with everyone from all over the country, which is amazing for business and for networking. Then we communicate with clients via Loom videos. So if you send me your expenses, I’ll take a video of me going through it. So that’s kind of like a little tech moment for us. And then we’re always trying to come up with new and better ways. Like this year, we’re using a tax portal that has a chat function. It’s like a more direct way to communicate with clients. So as technology is evolving, we are trying to grow and adapt with it. You mentioned in the United States, are you doing anything with anyone outside the US? I have some international accountants that I could send clients to, but I’m not doing any of the work. But we have a Canadian and an Australian resource if anyone’s looking for international tax prep. And if anyone listening knows of anyone who’s doing international tax prep anywhere else, I’m always looking to expand that network so I can send clients. Sure. Because you’re going to get people from the UK. You’re going to get people from Germany. You’re going to get people from the Netherlands because this industry is international. Exactly. It’s global. So that’s something that I would like to do as well, is to build a global network of resources beyond taxes because it’s international, baby. Exactly. No, that’s a great idea. How do you navigate the ethical boundaries of providing tax services in an industry that faces legal and societal scrutiny? We stay compliant and compassionate. So we’re following the rules. Everything we do is buy the books. There’s no creative accounting. And as far as ethical boundaries go, I mean, you’re getting a 1099, it’s self-employment income, and we’re preparing your taxes. There’s additional education that we have to have on the discrimination that goes on in the industry. So if a new accountant comes down, we’re talking about the banking issues and making them aware of some of the societal issues that they may not even know exist. But other than that, we’re doing our job, compliance and compassion. That’s a good tagline for sure. And especially since you live it, what approaches do you take to educate your clients about their tax responsibilities? I’m sure it takes a lot of education. Yeah, of course, because this is something that we’re never ever taught about. And there’s so much shame surrounding it too. So many people are ashamed they don’t understand taxes. I want to make the education very approachable and digestible. So I put a lot of information out into the world just for the sake of having it out there. So my social media is full of FAQs and tax tips. So hopefully before you even become a client, I’ve provided some sort of value to you and you already have a better understanding of how taxes work. But we have also eBooks and videos. And like I said, you can book a call and we can go through your individual questions. But it’s really important that you understand your tax situation. If you’re signing off on your tax return, you really should understand how that all works. So that’s something that we really strive to do. Give me a couple of key tax tips that especially creators, dancers, people that you work with should know. First thing you should know is that you should open up a separate bank account for your business. This is so simple from the top as soon as you’re earning self-employment income, cash or 1099, you can open up a separate personal checking account and deposit all of your self-employment income into that account. So that’s the first thing. The second thing would be to always be saving for taxes because you’re not on a W2, so there’s no withholding in your check. So at the end of the year, you’re going to, oh, it’s just the nature of being self-employed and it sucks. You can prep for it. So I always tell clients, you’re depositing 100% of your self-employment income into that bank account, save 25% immediately for taxes, keep 25% in the bank account for your business expenses, and then transfer 50% to your personal account until you pay yourself. Interesting. Any other tidbits? Yeah, I would say an LLC does not equal tax savings. I just want to say it one more time. It’s such a common misconception. People are opening up LLCs thinking that it allows them to take from more write-offs, but that’s not the case. So that’s a very common misconception. And another is that your health insurance is a write-off. So if you’re 100% self-employed, your monthly health insurance premiums that you’re paying through the marketplace is a write-off. Interesting. That’s how a lot of clients miss. Yes. I didn’t know that. There you go. We love a fun fact, Bruce. Excellent. Something that’s been brought up so many times in the seminars that I’ve gone to the legal seminars, and almost every attorney says this, lectures it, "Hey, guess what, guys? The adult business is a business. It shouldn’t be treated like a hobby. It should be treated like a business." Apply that to taxes and what people should think about. So true. So I mean, the first thing I’m going to say is kind of more of like a legal thing, but you should be in a contract with anyone that you’re working with. Second is that if you’re doing any collabs, you should have them complete form W-9 along with the contract before any work is performed because if you’re paying any other individual over $600 throughout the year, you owe them a $1099 by January 31st of the following year. So that’s another new tax compliance moment if you’re self-employed for the first time, and that’s something that gets skipped over a lot. And there’s penalties and fees to not filing a $1099 when you should. So to file that, you have to have their name, address, social security number, their basic information, and then we have to know exactly how much you paid them throughout the whole year. And then we’ve issued a $1099 at the end of the year. There must be pretty much blown away when you inform them, their business people, a lot of them, aren’t they? Oh, yeah, definitely. And like, and that you’re taxed as a small business. You’re actually a small business in the eyes of the IRS with or without the LLC. So yeah, it’s definitely a shift, especially if you’ve been only working W-2 jobs and now you’re making hundreds of thousands of dollars and you’re considered a small business in just the course of a couple of years, it’s a change. That’s got to create a lot of tax problems for these creators because some are making six, even seven figures a month. And I would imagine most are not prepared for it. No, not at first, but that’s any new entrepreneur in any industry, honestly, it’s a shock. If you’re not like set up with estimated tax payments quarterly, you’ll end up owing a lot at the end of the year and there’ll be penalties on it for underpaying. What else should they be doing besides that when they get into that kind of income range? Definitely have bookkeeping. You should always know where your profit stands, waiting until the end of the year to your bookkeeping when you’re making hundreds of thousands, if not millions of dollars. And it needs to be in a real system, not just on a spreadsheet. Once you’re hitting a $250,000 threshold, you want to make sure that you’re using a program like QuickBooks or Wave, something that’s an actual program where you can go and pull your profit and loss because that’s going to help us determine how much your salary should be for your payroll. That’s going to help you get a loan. It’s going to help you get a mortgage to know exactly where your business stands. Yeah, estimated tax payments on that topic, it’s not actually a separate tax return that you file every quarter. People say quarterly filings. It literally just means making a estimated tax payment every quarter. And that’s like a prepayment on your taxes. So that way, like I said, you don’t have an all-in-one bunch at the end of the year. This huge tax bill at the end of the year. Yes. And something else to know is that you can set up an IRS payment plan and with your state as well. So if you end up filing and you do owe way more than you can pay off, you can set up a payment plan with the IRS in your state and you can pay off like a credit card. So you should always still file your taxes. Fantastic. How do your services work and where can clients find you? Yes. So we can prepare your taxes and your previous year’s taxes if you need to catch up. Like I said, we also offer monthly services. We can work you on a monthly basis, doing your bookkeeping, your payroll, your tax planning, consulting, calculating those estimated tax payments, setting up your LLC and your S corporation. Then we’re customizing those packages for clients monthly. You can find us at theonlyconsultant.com. You can buy me on Instagram and TikTok at the_only_consultant. And I think on Twitter, you’re the only consult, right? Oh, yes. And on Twitter, I’m the only consult. Yes. And you can also email me, Katherine@theonlyconsultant.com. And that’s with a K. With a K? Katherine, I’d like to thank you for being our guests today on Adult Life Broker Talk. And I hope we’ll get a chance to do this again soon. Excellent. Bruce, appreciate it. See you soon. Thank you. My broker tip today is part one on how to buy a site. The first question to ask yourself is what kind of site would you like to buy? Would you like a tube site, a cam site, a dating site, a membership site, a social media site or something else? If you want to buy a membership site, what type of site do you want and in what niche? There are literally hundreds of niches and many sub-niches. For instance, let’s say you want to buy a gay site. Under gay, there’s bears or mature, bearback, Asian, Latino, amateur, bi, black, Euro and fetish, along with many fetishes under that classification. Plus, there’s hardcore, jocks, porn stars, solo, trans, twinks and uniforms. Straight has even more sub-niches. I can’t tell you how many people contact me and just say, "I want to buy a site" or "I want to buy a pay site." I need more information than that. How you make this decision should be based on these factors. What interests you? What you enjoy should definitely play a part in what you buy. If you like men and want to make money on a straight site, that’s probably a really bad idea. Same thing if you’re straight and want to buy a gay site. So what you’d like plays a part. What’s your budget? This is something you need to establish at the very beginning. Not only do you need to know what it is you’re working with, but some classifications of sites are more expensive than others. For instance, if you want a cam site with any traffic or revenue at all, you’re going to need a lot of money. In fact, to buy any established and successful site will be somewhat expensive. If you buy a site that’s pretty much just a platform without traffic or sales, you’re going to need a huge investment to build it up. In that case, it might actually be as good or better just to start your own site. That way you get exactly what it is you’re looking for. We’ll talk about this subject more next week. And next week we’ll be speaking with Inca Winter of Four Play Films. And that’s it for this week’s Adult Site Broker Talk. I’d once again like to thank my guest, Katherine Studley of The Only Consultant. Talk to you again next week on Adult Site Broker Talk. I’m Bruce Friedman. 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