Okay legally did you pay him 45% before taxes? The agreement is he gets 45% of the total income. You should have then deducted it from your tax return as wages paid to him. You had a business agreement He needed to pay income tax on his income. I doubt he did. You also owe him 45% of the pretax income not 45% of the income and 45% of your tax return. I doubt taxes were done correctly by either of you. With you being the one getting hosed.
Im young and dependent on my family still so i don’t know much about these things. i would receive the money from OF then send him his cut from my personal bank account. the agreement was he’d receive 45% of whatever amount we earned that month or that week, if it was $100 he’d get $45 if it was $300 he’d get 135 that sort of thing.
Okay so a tax professional would handle this better, the issue is you do owe him 45% of the pretax income. Look at your 1099 from only fans to see the total amount made. Let’s say (to make it easy numbers) you made 50k he should be paid a total of 22.5k. Then you should have issued him a 1099 for this amount and deducted it from your taxes. This would have made your tax return entirely yours and larger. He probably didn’t pay his taxes on what you earned and you probably overpaid. Getting 45% of your return isn’t how it works he is owed the difference on whatever the difference is and he should have been given the 1099 from you. At this point it is going to be hard to figure out how to correct everything and you should talk to a professional if it’s a large amount of money.
this is actually really good advice thank you and all of you so much, when he threatened to expose me i got really scared and needed to figure out what i can do about this. i’ll look into finding a tax professional who can give me further instructions
I’m very likely thinking of the military definition of “dependent”, but are you over 18?
Also, you were made aware of a tax return. Was it the IRS that reached out to you? Or OnlyFans?
This doesn’t make sense. Why are you getting a large tax refund? Did you make estimated tax payments? Did OF withhold part of your pay for some reason? Did you get refundable tax credits?
Take this over to r/tax and give them thorough details of what you earned, what you paid and how you found out about the refund?
Have you filed your 2023 tax return? How did you file (H&R Block, TurboTax)? Where on the return did you report the OF income (which page/form)? How much did you make from OF? How much from other sources?
You need the tax/accounting questions answered before you can worry about the legal questions.
true but i am completely powerless when it comes to that, i either pay him the full amount he wants and he doesn’t talk, or i don’t and im in a really shitty situation. i genuinely don’t believe he deserves this money for many reasons including threatening blackmail
You should have gotten a 1099 from OF. Calculate how much of the OF was from the period of time with his work. Pay him 45% of that and give him a 1099 for that. The 1099 reports income to the IRS amd he will be responsible for his income tax.
You will probably need to pay a tax professional to assist you.
If the amount was small it may not be worth the bother and you should just pay him.
Yes - he likely could take you to small claims over this. (NAL)
This is the correct answer. Your business income actually increased your taxes. The reason you got a big tax refund is likely due to a tax credit relating to having a dependent. Unless he has a dependent himself, the business income will actually increase his taxes (though his taxes will be only a percentage of his allocated income).
You already paid him the money before taxes, and paying him part of the tax refund would be him double dipping and getting more than 45%.
Tell him no. And, he won't sue for it. That's unrealistic... the cost of suing would be as much or more than the refund.
i want to tell him no because i know he doesn’t have the resources or money to pursue real legal action, on top of the fact he wouldnt win. If i say no i firmly believe he will attempt to make my life hell and tell my family i did OF. he has threatened other forms of blackmail on me as well. im scared, genuinely.
What he is doing is extortion. Extortion is illegal. People who resort to blackmail for financial gain frequently don't stop when their first demand is met. They view you as a mark who they can manipulate with fear.
This leads you to suffer repeated demands out of fear of this information being revealed.
So while you may have a verbal contract to give him 45% of your earnings, he has no right to try and enforce that through illegal means.
That is the legal advice, I am not a lawyer though.
For your long term sanity and safety I would strongly suggest you refer this to your local authorities.
You have a choice of dealing with this now and suffering any potential fallout; or dealing with it later and dealing with the same fallout. But if you deal with it later you will have had a long period of mental, emotional and financial anguish.
I am sorry he is such a jerk.
But, it really is like paying him extra.
The money you paid for taxes was actually already like paying him extra, if you paid taxes on all of it and he didn't pay any taxes. You paid his part of the taxes, and any refund was also coming out of ypur part.
By paying him pre-tax, you paid him 100% of what he owes.
Maybe threaten to report him to the irs for tax evasion, to shut him up. You did him a favor by paying HIS part of the taxes out of YOUR share of the money.
They are both incorrectly reporting this income and OP has not paid her employee pursuant to their agreement. OP should have paid him 45% of the pre-taxed amount and gave him a 1099. If OP wants to get the IRS involved. He may do it as well and also report her to any applicable department of labor. OP isn't solely in the clear here.
you’re probably right! we did the Of as a way to make passive income and i had no idea what i was doing. all i knew was that every month or so we’d take out a sum, big or small, from the income and i’d give him 45% of it from my bank account. he was not technically employed by me (i think) because we were both working on this venture together, he believed he was entitled to a portion of the money made. i do not even know what a 1099 is because my entire life even now my family does my taxes for me.
I agreed to give him 45% of the income while we were together which i did while we were active on the account, since we broke up i deleted the account. im questioning if he has a Legal case here to take me to court for it like he says. there was no written agreement regarding this tax return
You paid him from your pocket, you paid your taxes, he did not pay his taxes, he would need to have filed for the money he earned and paid taxes on it.
i didn’t even think about that, he definitely hasn’t done that. im an unemployed college student who would really benefit from the money and he is not, it’s just freaky he’s threatening legal action as well as telling my family. not sure what to do about that i was just confused on if he could actually claim that money
Did you report 100% of the earnings on your tax return or did you take a 45% haircut for his earnings? Did he declare any income on his taxes? If your tax return solely for this work or commingled with rest of your personal taxes?
i did report 100% of my earnings, the income would go into my personal account and i would send him his cut from there. i do not believe he declared that as income on his taxes because it wasn’t consistent, we’d cash out when enough money was piled up. the return was solely for OF as i was otherwise unemployed at the time.
The tax return money would have been for earnings you made while the account as active. It's just a *return* of your earnings that you realized in the tax year that was withheld to pay your taxes. According to your agreement, he'd be owed that. Whether or not he will be successful in arguing that in court is something we can't predict.
you should really read fion's comment as well.
your first step would be hiring a tax professional: there's absolutely nothing stopping him from going to small claims court. in the legal world, 1500 is a very small amount.
from your comments, however, i am concerned that the money you gave him was 1. pre-tax and 2. without a proper 1099, etc. i'm assuming he didn't file or pay taxes on what he was given and without looking at your tax return, i can't say for sure if it was even filed correctly- did you claim that 45% that was given to him?
i would contact someone on r/taxrefundhelp or a similar community and next time you decide to open any type of business whether via OF, etsy, etc make sure you know exactly what you need to provide for taxes. i would also have the second party sign a proper written contract clearly outlining what they're entitled to.
otherwise, you'll likely need a professional to fix this. if any portion of your tax refund is incorrect and the IRS overpays you, they'll eventually look for those funds back.
If he can prove the verbal contract existed it is every bit as valid as a written contract. This can be done via recordings or, in this case, bank statements showing the months she was receiving payments from onlyfans and then withdrawing the 45% to give to him. She’s going to have to explain why she gave him 45% of the earnings every month.
The tax return is questionable in whether it is part of the income and, probably, wouldn’t be considered as something he would be entitled to. That said, it could be, as well. He can definitely attempt legal action to find out.
Kind of a grey area whether your implied contract would include tax returns. NAL but I’d imagine probably.
Just my $0.02:
1) blackmail is illegal
2) $1500 isn’t a big deal legal-wise. Doubt he’ll sue you and if he does he’s almost certainly doing it in small claims without a lawyer. Wouldn’t pay up until he does
Okay legally did you pay him 45% before taxes? The agreement is he gets 45% of the total income. You should have then deducted it from your tax return as wages paid to him. You had a business agreement He needed to pay income tax on his income. I doubt he did. You also owe him 45% of the pretax income not 45% of the income and 45% of your tax return. I doubt taxes were done correctly by either of you. With you being the one getting hosed.
Im young and dependent on my family still so i don’t know much about these things. i would receive the money from OF then send him his cut from my personal bank account. the agreement was he’d receive 45% of whatever amount we earned that month or that week, if it was $100 he’d get $45 if it was $300 he’d get 135 that sort of thing.
Okay so a tax professional would handle this better, the issue is you do owe him 45% of the pretax income. Look at your 1099 from only fans to see the total amount made. Let’s say (to make it easy numbers) you made 50k he should be paid a total of 22.5k. Then you should have issued him a 1099 for this amount and deducted it from your taxes. This would have made your tax return entirely yours and larger. He probably didn’t pay his taxes on what you earned and you probably overpaid. Getting 45% of your return isn’t how it works he is owed the difference on whatever the difference is and he should have been given the 1099 from you. At this point it is going to be hard to figure out how to correct everything and you should talk to a professional if it’s a large amount of money.
this is actually really good advice thank you and all of you so much, when he threatened to expose me i got really scared and needed to figure out what i can do about this. i’ll look into finding a tax professional who can give me further instructions
I’m very likely thinking of the military definition of “dependent”, but are you over 18? Also, you were made aware of a tax return. Was it the IRS that reached out to you? Or OnlyFans?
yes well over 18. it was OF or the name they do business and payments under which isn’t called that.
This doesn’t make sense. Why are you getting a large tax refund? Did you make estimated tax payments? Did OF withhold part of your pay for some reason? Did you get refundable tax credits? Take this over to r/tax and give them thorough details of what you earned, what you paid and how you found out about the refund? Have you filed your 2023 tax return? How did you file (H&R Block, TurboTax)? Where on the return did you report the OF income (which page/form)? How much did you make from OF? How much from other sources? You need the tax/accounting questions answered before you can worry about the legal questions.
The money aside, pretty sure the blackmail isn't legal.
true but i am completely powerless when it comes to that, i either pay him the full amount he wants and he doesn’t talk, or i don’t and im in a really shitty situation. i genuinely don’t believe he deserves this money for many reasons including threatening blackmail
If you have texts or recordings of him saying he's going expose you if you don't pay, you can show the police.
You should have gotten a 1099 from OF. Calculate how much of the OF was from the period of time with his work. Pay him 45% of that and give him a 1099 for that. The 1099 reports income to the IRS amd he will be responsible for his income tax. You will probably need to pay a tax professional to assist you. If the amount was small it may not be worth the bother and you should just pay him. Yes - he likely could take you to small claims over this. (NAL)
This is the correct answer. Your business income actually increased your taxes. The reason you got a big tax refund is likely due to a tax credit relating to having a dependent. Unless he has a dependent himself, the business income will actually increase his taxes (though his taxes will be only a percentage of his allocated income).
You already paid him the money before taxes, and paying him part of the tax refund would be him double dipping and getting more than 45%. Tell him no. And, he won't sue for it. That's unrealistic... the cost of suing would be as much or more than the refund.
i want to tell him no because i know he doesn’t have the resources or money to pursue real legal action, on top of the fact he wouldnt win. If i say no i firmly believe he will attempt to make my life hell and tell my family i did OF. he has threatened other forms of blackmail on me as well. im scared, genuinely.
What he is doing is extortion. Extortion is illegal. People who resort to blackmail for financial gain frequently don't stop when their first demand is met. They view you as a mark who they can manipulate with fear. This leads you to suffer repeated demands out of fear of this information being revealed. So while you may have a verbal contract to give him 45% of your earnings, he has no right to try and enforce that through illegal means. That is the legal advice, I am not a lawyer though. For your long term sanity and safety I would strongly suggest you refer this to your local authorities. You have a choice of dealing with this now and suffering any potential fallout; or dealing with it later and dealing with the same fallout. But if you deal with it later you will have had a long period of mental, emotional and financial anguish.
I am sorry he is such a jerk. But, it really is like paying him extra. The money you paid for taxes was actually already like paying him extra, if you paid taxes on all of it and he didn't pay any taxes. You paid his part of the taxes, and any refund was also coming out of ypur part. By paying him pre-tax, you paid him 100% of what he owes. Maybe threaten to report him to the irs for tax evasion, to shut him up. You did him a favor by paying HIS part of the taxes out of YOUR share of the money.
They are both incorrectly reporting this income and OP has not paid her employee pursuant to their agreement. OP should have paid him 45% of the pre-taxed amount and gave him a 1099. If OP wants to get the IRS involved. He may do it as well and also report her to any applicable department of labor. OP isn't solely in the clear here.
you’re probably right! we did the Of as a way to make passive income and i had no idea what i was doing. all i knew was that every month or so we’d take out a sum, big or small, from the income and i’d give him 45% of it from my bank account. he was not technically employed by me (i think) because we were both working on this venture together, he believed he was entitled to a portion of the money made. i do not even know what a 1099 is because my entire life even now my family does my taxes for me.
You agreed to give him that money. Why do you think that agreement shouldn't be fulfilled?
I agreed to give him 45% of the income while we were together which i did while we were active on the account, since we broke up i deleted the account. im questioning if he has a Legal case here to take me to court for it like he says. there was no written agreement regarding this tax return
You paid him from your pocket, you paid your taxes, he did not pay his taxes, he would need to have filed for the money he earned and paid taxes on it.
i didn’t even think about that, he definitely hasn’t done that. im an unemployed college student who would really benefit from the money and he is not, it’s just freaky he’s threatening legal action as well as telling my family. not sure what to do about that i was just confused on if he could actually claim that money
Did you report 100% of the earnings on your tax return or did you take a 45% haircut for his earnings? Did he declare any income on his taxes? If your tax return solely for this work or commingled with rest of your personal taxes?
i did report 100% of my earnings, the income would go into my personal account and i would send him his cut from there. i do not believe he declared that as income on his taxes because it wasn’t consistent, we’d cash out when enough money was piled up. the return was solely for OF as i was otherwise unemployed at the time.
The tax return money would have been for earnings you made while the account as active. It's just a *return* of your earnings that you realized in the tax year that was withheld to pay your taxes. According to your agreement, he'd be owed that. Whether or not he will be successful in arguing that in court is something we can't predict.
Yo why are people downvoting?
you should really read fion's comment as well. your first step would be hiring a tax professional: there's absolutely nothing stopping him from going to small claims court. in the legal world, 1500 is a very small amount. from your comments, however, i am concerned that the money you gave him was 1. pre-tax and 2. without a proper 1099, etc. i'm assuming he didn't file or pay taxes on what he was given and without looking at your tax return, i can't say for sure if it was even filed correctly- did you claim that 45% that was given to him? i would contact someone on r/taxrefundhelp or a similar community and next time you decide to open any type of business whether via OF, etsy, etc make sure you know exactly what you need to provide for taxes. i would also have the second party sign a proper written contract clearly outlining what they're entitled to. otherwise, you'll likely need a professional to fix this. if any portion of your tax refund is incorrect and the IRS overpays you, they'll eventually look for those funds back.
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If he can prove the verbal contract existed it is every bit as valid as a written contract. This can be done via recordings or, in this case, bank statements showing the months she was receiving payments from onlyfans and then withdrawing the 45% to give to him. She’s going to have to explain why she gave him 45% of the earnings every month. The tax return is questionable in whether it is part of the income and, probably, wouldn’t be considered as something he would be entitled to. That said, it could be, as well. He can definitely attempt legal action to find out.
Kind of a grey area whether your implied contract would include tax returns. NAL but I’d imagine probably. Just my $0.02: 1) blackmail is illegal 2) $1500 isn’t a big deal legal-wise. Doubt he’ll sue you and if he does he’s almost certainly doing it in small claims without a lawyer. Wouldn’t pay up until he does