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Benefits of filing/not filing taxes?
I've seen 50/50 when it comes to this.
Some girls highly recommend not filing taxes, others say that they highly recommend do filing them.
What are the benefits and downsides to each argument? Currently I am a college student living at home as a dependent of my father, making under 15k a year.
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Re: Benefits of filing/not filing taxes?
I'm very interested, too. We need Melonie to write a report. She gives a great name to large-breasted, highly-educated ex-dancers everywhere! :D Help us out, Mel! ::hug::
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Re: Benefits of filing/not filing taxes?
I honestly don't know anything about filing taxes as a dancer. I was never a waitress so the whole tips thing throws me off. I know it's different from normal taxes, I just don't know how.
Is it bad that I haven't been keeping very good records so far? What do I do about that?
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Re: Benefits of filing/not filing taxes?
The dollar den has lots of information on this, though I'm pretty sure not filing your taxes is illegal and the irs can nab you for tax evasion.
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Re: Benefits of filing/not filing taxes?
Uhm, its illegal to not pay taxes.
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Re: Benefits of filing/not filing taxes?
Downsides of not paying taxes:
1) The IRS could fuck yo shit uuup.
2) Need I say more?
I mean, if you're claiming as a dependent, you'll only be claiming (legally) around $5-10,000 a year...which translates to upwards of $600 in taxes. I think your sanity is worth going to HR Block, losing the 600, and having an (apparently) legal record. I know I sleep much better at night.
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Re: Benefits of filing/not filing taxes?
Other considerations: If you want to get a loan (car, mortgage) you need to prove you have steady income. Sometimes you need that for renting an apartment, even.
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Re: Benefits of filing/not filing taxes?
It would seem- that telling the IRS you make steady money as a self-employed dancer does NOT convince the banks to take you seriously for home loans someday. And you need to have suffiecent self-employed income for several years before they'll even talk to you. They KNOW that a business based on your looks (so this includes porn/webcam) cannot sustain a person for the next 30 years.
I would recommend filing, but change the nature of your occupation to gardener, housekeeper, nanny, anything cash-based that theorhetically you could keep pluckin' away with for many years to come.
If you make 15K I would claim slightly over 6K (if it didn't all go thru the bank, that is) It won't even be that much and it's better than paying nothing at all. I know some people are super honest and claim every dollar bill they pick up. But c'mon, seriously? Then it's like every dollar you pick up is really only worth 72 cents to you.
I didn't pay anything for the first 3 years, then on my fourth I paid a little and went back and paid for another year too. This year I'll pay even more. I don't feel like such a scum bag now because I actually contributed to our society! Of course, I also feel more anger towards our government and how they choose to operate. Thats why this health care thing is such a big deal for everyone. Nobody wants to pay for someone else who couldn't get it together enough for themselves...
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Re: Benefits of filing/not filing taxes?
If you're working a dayjob now and getting a paycheck, they are probably already taking out the appropriate amount of taxes, if not more. By filing, you may be able to get a refund, although I don't know how much of one, as you are a dependent.
When you start to dance, if you get audited, or the club gets audited, and they find your social sec number and personal info at the club, they can go after you for back taxes to the estimate THEY think is appropriate, even if you didn't make that much. Then, if you're a dependent, this will affect your family's taxes too.
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Re: Benefits of filing/not filing taxes?
I've never paid taxes on any "under the table" money I've made in my life.
Not saying I recommend that... just saying. It's a risk I usually choose to take.
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Re: Benefits of filing/not filing taxes?
Quote:
Downsides of not paying taxes:
1) The IRS could fuck yo shit uuup.
2) Need I say more?
Yes you probably need to say a bit more, such as ...
- your student loan / grant money situation getting thoroughly f#$ked up
- your parent's income tax situation getting thoroughly f$%ked up
- the IRS 'estimating' that you actually earned 2-3-4 times as much money as a dancer than you really did, thus attempting to collect 2-3-4 times as much tax money than if you had willingly filed a tax return in the first place.
- the IRS considering you to be a 'wilful tax evader', thus worthy of extra attention for the rest of your life
Indeed it is illegal not to file a tax return and not to pay taxes due. I would also point out that, with all levels of gov't being increasingly 'broke', the likelihood of a person working in a 'cash' business being investigated by the IRS or a state / local tax agency has never been higher.
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Re: Benefits of filing/not filing taxes?
Thanks for all the insight for us newbies, ladies!! :)
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Re: Benefits of filing/not filing taxes?
Alright... where would I get started with filing taxes, step by step? I've only been told that if I do file taxes, to just record how much I make every night VS tip out and house fees, but nothing more.
My dad does all the taxes for the family because we all get our forms in the mail and he can just do them, and obviously some HR person handles the income numbers from wherever we work.
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Re: Benefits of filing/not filing taxes?
you might want to read all the way through this thread ...
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Re: Benefits of filing/not filing taxes?
Quote:
Originally Posted by
Melonie
Indeed it is illegal not to file a tax return and not to pay taxes due. I would also point out that, with all levels of gov't being increasingly 'broke', the likelihood of a person working in a 'cash' business being investigated by the IRS or a state / local tax agency has never been higher.
This is, if you owe taxes due. Right now, as a student, dependent, and likely working a job where you are a W2 employee with paycheck withholding, you don't need to file....although you do need to do all of the calculations, along with your parent, to ensure that...SO, if you do all the work, might as well file it, especially if you can get a refund.
ACTUALLY...you may not qualify as a dependant if you're making $15K a year:
4. The child must not have provided more than half of his or her own support for the year. Scholarships received by a full-time student are not taken into consideration as support provided by the student, so this would not disqualify the child as your dependent under the support test. But proceeds from a student loan would count as support provided by the student, if the loan is taken out in the student’s name. If the parents take out a Federal PLUS loan, for example, to pay college expenses, the proceeds from the loan are considered support provided by the parents.
Gross Income – The dependent earns less than the personal exemption amount during the year. For 2008, this means the dependent earns less than $3,500.
Work this out with your father. You may still count as a qualifying child and help his return, but there is no way you can be a dependent making $15K a year.
In the last two years, I've known about half a dozen dancer friends who have been sent notice due for back taxes. Its no joke.
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Re: Benefits of filing/not filing taxes?
I said I make LESS than 15k. There is absolutely no way I can live on my own with the amount of money I make and go to school at the same time.
Currently I hold two jobs - and one has pretty much stopped giving me hours. I averaged $600/month, now I only make $350 with the only job I actually work at now - 10 hours a week. it's a paid internship through the school.
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Re: Benefits of filing/not filing taxes?
So, 2 paycheck jobs? That's easy! They'll send you w-2 forms in 2010, probably around the end of January. You can then fill out a 1040 EZ tax form. You are very likely to get a tax refund or credit, and it could be as much as $1000+.
You definitely want to file. Don't leave your money that the government owes you with the government. File your return and claim your refund. That money is yours, you earned and the government has borrowed it from you. Since your situation is so easy, skip the rapid refund services. It should only take 2 weeks or so for the government to get your check out to you. Faster if you file electronically.
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Re: Benefits of filing/not filing taxes?
Oh I always do file taxes every year, make no mistake about that! I have no intention of ever being a dishonorable citizen.
My question is whether it would be a good idea to claim taxes on my stripper job (which I will be starting next Saturday, mind you - I haven't started yet). And what the benefits/downsides are to filing or not filing them.
I did read the thread that Melonie linked to, but I still didn't quite understand on WHERE TO GET STARTED on filing stripper money taxes.
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Re: Benefits of filing/not filing taxes?
I wrote a long and drawn out explanation on my blog here: Income and tax records
I know it is boring as watching paint dry, but since you haven't started yet, this guide can get you off on the correct path. :)
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Re: Benefits of filing/not filing taxes?
Honestly, if you live at home, go to school, have a day job you're paying taxes on, are largely supported by your parents and are only going to dance a little on the side, I very much doubt you're going to be audited. Assuming you just hold on to the cash and don't put much of your dance money in the bank, I don't see how the irs could "fuck you up."
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Re: Benefits of filing/not filing taxes?
Well, see and here's the problem with keeping it out of the bank - first and foremost I'm gonna use the money from dancing to pay off credit cards :\
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Re: Benefits of filing/not filing taxes?
Quote:
Originally Posted by
Elvia
Honestly, if you live at home, go to school, have a day job you're paying taxes on, are largely supported by your parents and are only going to dance a little on the side, I very much doubt you're going to be audited. Assuming you just hold on to the cash and don't put much of your dance money in the bank, I don't see how the irs could "fuck you up."
cash can be traced pretty readily, by zip code and pattern analysis, among other more proprietary methods already in use.
if they want the tax money (and increasingly, they do), you [generic you] can't just 'keep it all out of the bank' and have that reliably work out.
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Re: Benefits of filing/not filing taxes?
As Miabella points out above, and other threads about increased IRS enforcement point out in great detail, the IRS now has an abundance of automatic 'spending side' data gathering ... which stems the gamut from zip code + occupation code based 'cost of living' data, to college tuition expenditure data via student loan agencies, to car purchase / loan data via state motor vehicle agencies, and a host of other. Additionally, if given a reason to inquire, the IRS can obviously access credit reports thus all bank accounts, credit card accounts, retirement accounts, brokerage accounts etc. in a matter of seconds.
The point of course is that the IRS paradigm has changed greatly in the past 10 years. Back then, the IRS had little ability to 'conveniently' access spending side data, and thus concentrated on reported income and deductions. It occasionally 'closed the loop' by meticulously gathering 'spending side' data in order to prove a mismatch against reported income ... but this was confined to 'high value targets' since the huge investment of human agent labor then necessary to assemble a 'spending side' financial scenario needed to be 'paid for' by an even larger recovery of additional tax dollars. Obviously, today, the IRS's investment in automatic reporting mechanisms and IRS ability to access both gov't and private databases in addition to online transactions / statements, has made 'closing the loop' very cheap, very easy, and very fast.
Cutting to the chase, in the eyes of the IRS, any person who appears to be spending more money than they appear to be earning in the first place is a ripe target for further investigation. So the secondary question arises as to why the IRS might be given reason to look. Where the exotic dancing business and college student dancers are concerned, following are a few possibilities ...
- 2% chance of random audit
- the club the dancer works at has done something that prompts an investigation, which in turn makes the club's dancer records available to the IRS as a consequence of that investigation
- another dancer, bouncer, DJ etc. who works at the same club has done something that prompts an investigation ( see recent thread ) , which in turn makes the club's dancer records available as a consequence of that investigation
- inconsistencies channeled back through the college bursar's office and Sallie Mae regarding student loan/grant application financial data versus the parents' tax return versus the student's tax return.
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Re: Benefits of filing/not filing taxes?
Quote:
Originally Posted by
miabella
cash can be traced pretty readily, by zip code and pattern analysis, among other more proprietary methods already in use.
if they want the tax money (and increasingly, they do), you [generic you] can't just 'keep it all out of the bank' and have that reliably work out.
No entirely what I said. What I said is if she's only working a little bit on the side (and in an area where she doesn't expect to be making a whole lot of money) then I think it would be a pretty simple problem to avoid. You could just use the cash for your everyday cash based expenses. Of course, her plans to use it for paying off credit card expenses make it another story.
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Re: Benefits of filing/not filing taxes?
Quote:
Originally Posted by
peachplumpear
If you make 15K I would claim slightly over 6K (if it didn't all go thru the bank, that is) It won't even be that much and it's better than paying nothing at all. I know some people are super honest and claim every dollar bill they pick up. But c'mon, seriously? Then it's like every dollar you pick up is really only worth 72 cents to you.
The federal income tax on $15,000 would be less than $200. Even the self employment tax would be less than $2,100. Why not file and pay? You look honest, you make at least some income record. You are clear with the government for things like student loans and federal jobs. If you had a child, your earned income tax credit would be $4400. That's clearing $2300 for simply filing.
HTH
Z