Tax Question for a Dancer that Doesn't Dancer that Much
Just curious about taxes. This will be the first year that I would be in the position to possibly claim any. I work in Nashville, TN so I definently want to do the legal thing... since we do have to get liscenced here. My question... I really don't work that often... maybe twice a week... sometimes I'll take a whole week off... the club keeps computer records of this... I just use dancing as extra income... I probably only make $350 a week on average. If I file as a dancer will the IRS make my claim the average of dancers in the area... or do they take into account how little I work. Also, at my club they keep count of lapdances, etc. I usually make my money working the floor... for some reason guys give my money to run my big mouth... which is great for me. Anyhow... there are many nights that I don't even do one lapdance... how will the IRS take that into effect, since it looks like I don't really make any money?
Re: Tax Question for a Dancer that Doesn't Dancer that Much
If you are honest on your taxes and you are living "within the means" of making what you say you make at your "normal" job and what you make as a dancer, then you have nothing to worry about. However, if you are claiming that you make $300 a week at dancing and you make $500 a week at your normal job...but you live in a $1500/month condo and drive a brand new Beemer and have also managed to save $45,000...THEN the IRS might be interested in your claims. However, like I said...be honest and you will not have any problems.
For the future, though...keep a journal...a log of what days you work, what your shift was, how much you made TOTAL before tip-out, how much you tipped out, and what you paid in house fees. Not only does it help you at tax time...but it's more "reliable" if you were to ever get audited. Also, keeping all receipts stapled in the back of the log of your expenditures for dancing related stuff will help keep everything organized.
Good luck!
Re: Tax Question for a Dancer that Doesn't Dancer that Much
Just keep it in perspective, 350 a week is 1400 a month or 16.8 a year not big bucks but not exactly small change either for what is basically a part time job. Keep in mind depending on what you make (and get witheld) at a "normal" job if you have one, you may have to make estimated payments every quarter.
Re: Tax Question for a Dancer that Doesn't Dancer that Much
as an independent contractor dancer, it's up to you to keep track of how much money you actually earn each night that you work. It's also up to you to keep track of how much you pay out in 'business expenses' like house fees, costumes & shoes etc. It's up to you to enter your independent contractor income and business expenses on IRS schedule C when you file your annual tax return, and also to file and send in quarterly estimated tax payment checks to the IRS.
Assuming that you also have a 'straight job', be aware that adding dancing income on top of your 'straight job' income will ratchet up the tax bracket which applies to BOTH incomes. Say your straight job pays $30,000 per year and you don't dance for extra income. Your SSI plus income tax bracket might wind up being 15% meaning that $4,500 of your straight job paychecks go to the gov't.
However, if you add $20k per year in dancing income, for a total income of $50k, your straight job tax bracket might wind up being 25% instead meaning that $7,500 of your straight job paychecks will need to go to the gov't instead. On top of this, because of self-employment tax, the tax bracket on your dancing income might wind up being 33%, meaning that $6600 of your dancing income will need to be paid as estimated taxes.
Thus if you were earning $30k and taking home $25.5k from your straight job alone, adding $20k in additional dancing income will increase your pre-tax income to $50k but would only increase your take home income to $22.5 + $12.4 = $34.9k. In other words, because of the effect of extra income on your straight job tax rate, you'll effectively only be able to 'keep' a little more than half of the extra money you earn from dancing.
As to how this goes down, there are several options. If you elect to not change the tax withholding on your straight job paycheck, you'll then need to set aside not quite half of your nightly dancing income and send it in to the IRS every 3 months as an estimated tax payment. If you don't want to deal with estimated taxes, you could change your straight job tax withholding such that your employer withholds all of the roughly $15k per year that you'll owe in combined taxes - but this will decrease the size of your paycheck by some 30-40% over the amount you take home now. You could also split things down the middle by having your employer increase the tax withholding to the $7,500 per year you'll actually owe on the straight job portion of your income (reducing your paycheck by maybe 15%), and then set aside 33% of your dancing income (the amount of tax you actually owe on that dancing income alone) to be sent in as estimated tax payments every 3 months.
Re: Tax Question for a Dancer that Doesn't Dancer that Much
Mel: keep in mind, if you are single and have no dependents as may be the case here then that is the max you can have your employer (if she has one) withhold for you. Not the same as all those people who claim no dependents all year, send in the max all year and then file with a wife and 4 kids "so they can get that "big refund"
To the best of my knowledge an Employer can't send in more IE "single -1 or -2"
Re: Tax Question for a Dancer that Doesn't Dancer that Much
^^^ not true ... at least where pay services like ADP are concerned. The 'employee' can request that the 'employer' instruct ADP to withhold any fixed percentage of gross pay for federal, state and local income tax.
Re: Tax Question for a Dancer that Doesn't Dancer that Much
If I am not mistaken, you can CLAIM on your withholdings whatever you choose. What's important is what you actually claim when you file your taxes. We claim MORE exemptions on Joe's paychecks than we really have...when it comes time to file taxes, we adjust accordingly. But, we've never been keen on sending in chunks of money to the IRS to use, with us losing interest on the money, so we can get a big chunk back. We'd rather pay out a bit more than get money back. We've never had any problems, so I don't think the exemptions claimed on a paycheck matter. Just the final exemptions on the actual submitted yearly tax forms.
I'd like to add that one year, we got $300 back from the State of IL Dept of Revenue. The next year, we had to pay taxes on that to the IRS. Just a pain in the ass. Last year, we claimed 6 exemptions and when tax season came, we still got SOME money back (but there were a lot of other factors involved in this...so don't do this unless you know what you're doing or have a qualified accountant to walk you through it) although it wasn't anywhere near what some of our friends were getting (aside from hitting the AMT). It used to always depress me to see myself getting a few grand back at the end of the year knowing I could have been making interest on that money. But, at the time I didn't know that you could claim whatever exemptions you wanted as long as they were right when you filed.
Re: Tax Question for a Dancer that Doesn't Dancer that Much
Just to clarify I'm married with no dependents.
Re: Tax Question for a Dancer that Doesn't Dancer that Much
^^ again where ADP and other payroll services are concerned, as well as most employers who run their own payrolls on their own computers, 'employees' can request withholding amounts from the 'tax tables' i.e. single/married/head of household with 0-1-2-3 dependents. Alternately, 'employees' can simply say to the employer to 'block' the tax table calculation and simply withhold X percent of gross pay for federal, Y percent of gross pay for state etc.
I agree that the objective is for tax withholding (either via weekly paycheck or by quarterly estimated tax payment) should be just enough to cover the 'minimum' withholding which is free of IRS penalties and interest charges ... which is typically 90% of the actual taxes you will owe. Because of the law of compound interest, it is actually the 'best deal' financially to withhold as little as possible from weekly paychecks and to pay the difference in the form of quarterly estimated tax payments (because you and not the IRS gets to collect interest that money earns between quarters).
Re: Tax Question for a Dancer that Doesn't Dancer that Much
From my knowledge, whenever you jump a tax bracket, you only have to pay the increased percentage on those beyond the previous bracket. So say 25k is 15%, and you make 27K, you'd only have to pay 25% on the 2K.
If your club keeps track of your dances, they should be sending you a thing telling you what you paid out to them.
The IRS doesn't estimate your earnings, you tell them how much you made and how much you spent on work expenses.
Re: Tax Question for a Dancer that Doesn't Dancer that Much
Holy ancient thread Batman...