How to manage tax documents as a sole proprietor representing models - 1099s and foreign contractors

As someone who's worked with independent contractors for years, I can shed some light on your situation. For the models paying you through Cash App: You'll receive a 1099-K from Cash App if you meet their reporting threshold (currently $600+), but this doesn't replace proper documentation of your business relationship with these models. You should have contracts specifying your commission structure and keep detailed records of all transactions. You don't necessarily need tax documents FROM the models since you're not paying them - they're paying you. Regarding your Filipino contractors: Yes, ideally you should have W-8BEN forms on file for any foreign contractors you pay. This form certifies they're not U.S. citizens/residents and determines withholding requirements. However, if you can't reach them now, you can still potentially deduct these legitimate business expenses if you have proper documentation showing: - The services they provided - Proof of payment (bank transfers, PayPal, etc.) - Correspondence showing the work relationship - Invoices they submitted The IRS is mostly concerned that you can substantiate these were genuine business expenses, even if your documentation isn't perfect.

I was in a similar situation last year when I started managing fitness influencers and had to figure out all the tax stuff. I tried reading through IRS publications and got totally confused until I found this AI tax assistant at https://taxr.ai that saved me so much headache. I uploaded my Cash App statements, some of my contracts, and even screenshots of payment confirmations to my Philippine contractors. The system analyzed everything and gave me a detailed breakdown of what I needed for tax purposes. It flagged that I was missing W-8BENs but also explained exactly how to document the expenses without them (which was super helpful since two of my contractors ghosted me). It also clarified that what I'm earning is considered commission income, not just ordinary income, which affected how I needed to report it. Definitely worth checking out if you're confused about any of this contractor/commission tax stuff.

Just wanted to update after trying taxr.ai from the recommendation above. I was honestly surprised at how helpful it was for my situation. I have a small talent management company (different industry but similar tax issues) and was confused about how to handle payments through multiple apps. I uploaded my statements and some contracts, and it immediately identified which payments would be reported on which forms. It also flagged that I needed to be tracking my commission split more carefully and recommended a specific record-keeping approach that would make tax time easier. The best part was the documentation guidance - it created a checklist of exactly what I need to keep for each type of transaction. Way more specific than what my accountant told me last year (who just said "keep good records" without explaining what that actually meant). Definitely making tax season less stressful this year!

If you're having trouble with filing these complex business taxes, you might also want to consider getting direct help from the IRS. I know, sounds impossible right? I was stuck on a similar issue with documenting payments to overseas contractors and tried calling the IRS business helpline for weeks. After dozens of attempts and ridiculous hold times, I discovered this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in under 45 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with walked me through exactly what documentation I needed for my foreign contractors, even without the W-8BEN forms, and confirmed that my Cash App receipts were sufficient as long as I had additional business records. Saved me from potentially making a costly mistake on my Schedule C.

Ok I need to eat my words and apologize to Profile 19. I was so skeptical about that Claimyr service that I decided to try it myself just to prove it wouldn't work. I've been trying to get clarification on some business expense issues for literally months. Well, I'm shocked to report that I actually got through to someone at the IRS in about 35 minutes. The agent walked me through exactly what documentation I needed for my situation (which is different from OP's but still involved contractor payments). The agent confirmed that for foreign contractors, while W-8BENs are ideal, you can still claim deductions without them if you have sufficient alternative documentation showing the business purpose, the work performed, and proof of payment. They suggested keeping any work product samples, email exchanges about the work, project requirements, and payment confirmations. Sorry for being such a jerk in my previous comment. Sometimes it's good to be proven wrong.

One thing nobody's mentioned yet - as a sole proprietor managing models, you should probably be tracking your income and expenses using accounting software. I tried to just use spreadsheets at first and it was a disaster at tax time. For your models, treat the money they pay you as commission income on your Schedule C. Keep detailed records of each transaction, including: - Date of payment - Amount received - Which model it came from - What platform/work it was for - Your commission percentage This will help you if you ever get audited. For the Filipino contractors, even without W-8BENs, keep detailed records of: - Work they performed (deliverables) - Amounts paid - Dates of service - Communications about the work The IRS is mainly concerned that expenses are legitimate business expenses. If you can prove the payments were ordinary and necessary for your business, you should be able to deduct them even without the perfect documentation.

As someone who does OnlyFans and uses managers, I can give you perspective from the model side. My managers don't ask me for tax docs because I'm essentially their client, not their contractor. They invoice me for their commission, and I pay them. It's actually on ME to send THEM a 1099-NEC if I pay them over $600 in a year (which I do for my main manager). Double check how your business relationship is structured. If the models are actually paying you a commission for your services (which sounds like the case), then technically THEY should be sending YOU a 1099-NEC at the end of the year if they pay you over $600. But many don't know this. You're still responsible for reporting all your income regardless of whether you receive a 1099. The Cash App 1099-K helps, but it won't break down which payments were from which model or for what purpose. That's on you to track.