First of all, I apologize if this is in the wrong section.
I have been mulling over the idea of releasing an adult game on Patreon, but I have no idea what that would mean in terms of taxes and banking. Is there anything I need to be careful of or take care of before I start one?
I live in the United States.
I am not a lawyer or an accountant, but I can tell you what I know.
Your legal name will be hidden on patreon. You bank information is kept secure (or as secure as any online server transmitting confidential data). So in those regards, you will stay anonymous.
As for doing taxes and collecting money and all of that, here in the US there is a concept of "de minimis" which is literally defined as "too trivial to merit consideration." Now again, I say that
I am not a lawyer or an accounting professional, so I provide this next bit of information with the guidance that you double check this to still be true: If you make under $600 from a single source, that is de minimis, and thus does
not need to be put onto your taxes. However, the moment you make that Six Hundredth dollar, you must claim it. I
think that this means from a single source within a year, but it could be from a single source in one payment. I'm not sure about that... but anyway... if you were to make let's say $1000 over the year from patreon, but it's all broken up in payments that are always less than $600, you may be able to get away with not claiming it on your taxes, but
I do not recommend you test this. If you do go with that scenario, maybe you'd be fine (and tbh you might be, but i wouldn't suggest you try it), but
the IRS has no statue of limitations on their audits.
That last bit is like, the most important thing here so far; if you get audited fifteen years from now and they say that you owe them the taxes on the money you made from patreon, you will owe
interest on that as well, for the entire fifteen years... and the IRS' interest rates aren't something you want to fuck around with.
You should be worried about this. But hey, I'm not just to scare you. I had advice as well.
If you plan to be serious about making money on patreon, and you plan to stick with this long enough to make more than that $600 we talked about, I recommend that you do one of the following: 1) do your best to keep all the money you make saved until you file your taxes so that you can pay the proper taxes on that income, and then the rest is yours to play with. 2) talk to a lawyer and create an LLC. It's easy to do, pretty cheap (depending on the state you're in... and not counting the lawyer's fees, which will probably be the most expensive part). This way, you can funnel the money into the bank account for that company, which will make filing taxes on it a lot easier... but you'll need to do some research on all of this as well. It's not very useful to
just make the company without knowing
how that actually brings benefits to you. In case you're interested, I've already done that second option.
Added benefit of creating a legal company for this - You are able to file with the government to claim the pen name/psuedonym you use for all of this adult content as a "legal entity" owned by your company. "V.A. Laurie," as far as the government is concerned, is a legal entity owned by my organization, and I am legally allowed to sign documents using that name instead of my real name. No shit, I can sign a contract as V.A. Laurie, and that is legally valid now. No one needs to know my real name, and only my lawyer and maybe two other people in this industry have ever had reason to know it.
So... tl;dr - it all comes down to how much money you'll be making, and how serious you are about this.
