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Writer's pictureMelRose Michaels

Tax-Saving Secrets Revealed by The Only Consultant for 2025

Updated: Nov 29

SWCEO Interviews Katherine Studley

Blog Post Written By: MelRose Michaels

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Are you ready to take control of your finances and make 2025 your most profitable year yet? In a recent Twitter Space, MelRose MichaelsĀ sits down with Katherine Studley, The Only Consultant, to unpack tax-saving strategies and expert tips tailored for adult creators.


From end-of-year deductions to planning quarterly tax payments, discover how to maximize your income and minimize stress in the year ahead.



MelRose Michaels:Ā Weā€™re thrilled to welcome Katherine Studley, aka The Only Consultant, back for another insightful session on financial planning and taxes tailored for adult creators. With 2025 on the horizon, now is the perfect time to ensure you're set up for success. Letā€™s dive into Katherineā€™s expert advice.


MelRose Michaels: Katherine, as we wrap up 2024, what should adult creators focus on to finish the year strong financially?


Katherine: Now is the perfect time to track your income and expenses and create a profit and loss statement. This can be done through QuickBooks, an app, or a simple spreadsheet. Knowing your profit is crucial since thatā€™s what youā€™ll be taxed on.


Additionally, if you've paid any independent contractors over $600 this yearā€”like assistants, managers, or photographersā€”youā€™ll need to issue 1099s by January 31, 2025. Getting organized now will save your future self a lot of stress come tax season.


MelRose Michaels: Many creators work with agencies. How should they handle payments to these agencies for tax purposes?


Katherine: It depends on the agencyā€™s business structure. If theyā€™re an S corporation, you donā€™t need to issue a 1099. But for single-member LLCs or partnerships, you do. To prepare for this, collect a W-9 form from anyone you pay, which includes their basic information and tax ID.


If youā€™re a sole proprietor issuing 1099s, your Social Security number will be included, so consider forming an LLC to maintain discretion and protect your personal information.


MelRose Michaels: What last-minute purchases or investments can creators make to reduce their taxable income before December 31st?


Katherine: Only make purchases that are truly necessary for your business. Options include paying annual subscriptions upfront, buying equipment like cameras or ring lights, or paying invoices early.


Another option is contributing to a SEP IRA, which allows self-employed individuals to save for retirement while reducing taxable income. Itā€™s a great way to save for the future and cut your tax bill simultaneously.


MelRose Michaels: Speaking of retirement, are SEP IRAs the best option for creators?


Katherine: A SEP IRA is excellent for self-employed individuals. You can contribute up to 25% of your net earnings, with a cap of $66,000. Contributions can even be made up until the tax filing deadline, so itā€™s a flexible way to save and reduce taxes. Work with an accountant or financial planner to calculate how much you can contribute.


MelRose Michaels: Can charitable donations benefit creators during tax season?


Katherine: If you take the standard deductionā€”$13,850 for single filers in 2024ā€”charitable contributions wonā€™t provide additional tax benefits. However, if you itemize deductions and they exceed the standard amount, charitable donations can help. But for most creators, itemizing isnā€™t necessary or beneficial.


MelRose Michaels: What should creators know about preparing for 2025 taxes, especially for quarterly payments?


Katherine: Separate your business finances by using a dedicated bank account for all income and expenses. Aim to set aside 25-30% of your income for taxes. Quarterly estimated payments help avoid penalties. For example, if you owed $10,000 in taxes last year, aim to pay $2,500 each quarter.


If you earn over $150,000 annually, youā€™ll need to pay 110% of your prior yearā€™s taxes in quarterly payments to stay compliant.


MelRose Michaels: Letā€™s talk about deductions. What are the must-know write-offs for adult creators?


Katherine: Here are a few key deductions:

  • Health insurance premiums:Ā If youā€™re self-employed and donā€™t have access to employer-sponsored insurance.

  • Business-related services:Ā Payments to managers, assistants, photographers, or accountants.

  • Home office:Ā A percentage of your rent and utilities based on the square footage used for work.

  • Work supplies:Ā Cameras, lighting, costumes, or props needed for content creation.


Remember, deductions must be necessary and directly related to your business. Personal expenses like cosmetic surgery, gym memberships, or groceries arenā€™t deductible.


MelRose Michaels: What should creators consider when expanding into new income streams like coaching or merchandise?


Katherine: Treat each income stream as a separate business with its own bank account and set of records. When selling physical products, youā€™ll need to account for state sales tax, which can get complicated. Also, ensure you issue separate 1099s for contractors working in different parts of your business.


MelRose Michaels: What are the red flags that might trigger an IRS audit?


Katherine: Key red flags include:

  • Reporting round numbers instead of exact amounts.

  • Failing to report income from platforms like Venmo or Cash App.

  • Claiming high expenses that donā€™t align with your income.


Ensure your records are detailed and accurate. If audited, respond promptly to IRS notices. Itā€™s not the end of the world; it just means you need to provide documentation.


MelRose Michaels: How can creators start cleaning up their finances if they feel overwhelmed?


Katherine: Start small. Break the process into manageable steps, like organizing one yearā€™s worth of income and expenses at a time. If youā€™re behind on taxes, log into the IRS portal to access missing documents and wage transcripts. From there, work with a professional to create a plan.


Itā€™s never too late to get organized, and many creators see significant progress within a year.


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Some parts of the above interview have been condensed or edited for clarity. For the full interview, listen to the entireĀ Twitter space.


Find Katherine Studley on Twitter.

Interested in working with Katherine? Become a client here.


Disclaimer: The views and opinions expressed in the interview are those of the guest speaker and do not necessarily reflect the official policy or position of SexWorkCEO or MelRose Michaels. Anything said or written is of their opinion and is not intended to malign any religion, ethnic group, club, organization, company, individual, or anyone else.



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