Taxes Help - How to Start?
I'm very confused about taxes and how to file them as an independent contractor. I've been keeping track of absolutely everything I've earned and spent, I'm just concerned about deadlines and such. I've only been working since late August so when tax time comes around (January 2015?) do I just use what I've made since August until then? (I'm in Houston btw)
Also I heard that I have to make quarterly payments? How do you know when those are due?
I'm just lost and I don't know where to start. Sorry if this is vague. Any clarification would be greatly appreciated!
Re: Taxes Help - How to Start?
There's a lot of information on here to help you get started paying taxes. Check Dollar Den (https://www.stripperweb.com/forum/fo...130-Dollar-Den) and the thread on taxes stickied in Camming Connection (https://www.stripperweb.com/forum/sh...still-worth-it) since it's the same idea as filing as a dancer.
You don't need to make quarterly payments in your first year. Your earnings that year will serve to determine what your estimated payments will be the following year.
If you're really lost, get an accountant and learn from what they do.
Re: Taxes Help - How to Start?
In addition to reading Dollar Den, here are some general thoughts on taxes.
First, open a separate bank account for all your stripping income. Put your money in that account every night right after work. Keep nothing for yourself. If you need money for yourself, withdraw it later. Better, put yourself on a fixed weekly draw. Do it the same day every week and for the same amount. Pay all your stripper related expenses from the stripping account. Hold at least 30% of your deposits for taxes. (More about this below.)
Second, get a good simple bookkeeping system. It can be as simple as columnar paper in a three ring binder to as advanced as Quick Books. Doesn't matter, whatever you are comfortable with and will use. Record every deposit. record every payment. It helps to put payments in categories. Record ever draw for yourself.
Third, you won't need to make estimates in 2014. But, for 2015 and forward, you will. Get an accountant to set you up. A local firm will do fine for this. (Fair disclosure, I am a CPA, though not in a public practice. I am what CPAs refer to as being "in industry.") Your accountant will show you how she is setting up your taxpaying account and how to make your payments and fill out the forms. Or you can pay her to do it. I would pay her for the first estimate and your 2014 return, but you can probably take it from there. Of course, you can pay her to take care of your bookkeeping and tax payments too.
In all honesty, a good budget for taxes is 30% of your earnings. It may be less, it probably won't be more. But make sure you have that much available for the tax man. You are subject to the full social security and medicare taxes plus federal, state and local income taxes.
HTH
Z