Your Sugar Baby net income will be subject to ordinary tax as well as self-employment tax. This is something that people often miss and so their tax bills are higher than they expected. When youre self-employed you also have to pay this.
What is a typical sugar baby allowance?
According to Seeking Arrangements, the current average monthly allowance for babies is $2,400 per month, which is $28,800 a year. That means most sugar babies make less than minimum wage.
How do Sugar Babies do their taxes?
Sugar Babies will fill out a form Schedule C, Profit or Loss From A Business, and include that on their form 1040 tax return. All of the accounting that we discussed a few moments ago would go on this form. So your income will be shown at the top and your various expenses will be shown in the middle part of the form.
Do you have to report sugar daddy on taxes?
As a general rule, money from a “sugar daddy” relationship would be considered a gift and gifts are generally non-taxable from an income tax view.