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Thread: Tax Deductions for dancers

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    Default Tax Deductions for dancers

    So i did a lil search on it and found a few things... but i mostly read off topic debates about it.

    I would like to know what most of you have sucessfully deducted (not what you hear other dancers have done) and what percentage of it exactly was deducted (50 %, 75%, 100%?)

    Also, i would like to know who uses the home office deduction? And who uses the travel deduction? If i installed a pole and a computer into a room, would that qualify as a home office? If i also taught dance lessons in my home, would that qualify for a rent deduction?

    Please no off-topic debates. I would just like straight forward answers from dancers with actual experience or clear knowledge and explanations





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    Featured Member Ms. Mia Roberts's Avatar
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    Default Re: Tax Deductions for dancers

    So far this was the most helpful info that i found throught the search.

    Quoted from "Melonie"-

    "If you are an independent contractor, house fees and locker rent are deductible business expenses ... which offset income on a dollar for dollar basis on Schedule C. If you are an 'employee' dancer, it is arguable that house fees and locker rent are NOT legitimate deductions since it is technically illegal for the club to mandate that you pay such fees. Technically speaking, 'employee' dancers can only count house fees as a voluntary charitable gift from themselves to the club. In the real world, many dancers simply take house fees straight off the top, and consider the amount of money they walked out of the club with at the end of the night as their 'gross' income. However, if you're working at a club with very high stage fees, where the club keep records of stage fees being received, you'll want to declare these payments separately ... since there will be club records with your name attached if/when the club is ever audited. Also, in clubs with very high stage fee it is possible to wind up 'in the red' on certain nights (i.e. the club charges $300 stage fee and you only earn $250 back), and you can only claim a loss if you separately declare nightly earnings and nightly stage fees.

    Same situation applies to tipouts paid by dancers to individuals who are also independent contractors i.e. bartenders, DJ's, bouncers - these are legitimate business expenses and deductible on Schedule C. However, if these persons are 'employees' of the club, then the same voluntary charitable gift situation technically applies, since it is illegal for the club to mandate that dancers (independent contractor or 'employee') to pay fees to club 'employees', therefore any payments which are made by dancers to 'employee' bartenders, DJ's ^ bouncers must be voluntary charitable gifts.

    There is also a 'sticky wicket' that IRS rules require the dancer to issue a 1099 form for payments made to another independent contractor when $700 or more are paid to the same person in the same year. This can get extremely inconvenient if for example a dancer has paid $2-3,000 to the same DJ over the course of the year. Issuing the DJ a 1099 will first require that you find out his real name, address and SS#. Issuing the DJ a 1099 will also force the DJ to declare and pay taxes on his tipout income. But failure of a dancer to issue a 1099 to the DJ may technically put the dancer's tipout deduction at risk if the amount exceeds $700 in the same year. Again in the real world many dancers simply take tipouts to DJ, bouncers, bartender etc. straight off the top, only count the money they actually walk out of the club with at the end of the night as 'gross' income, and avoid the 'sticky wicket'.

    As far as deducting other peripheral things, i.e. tanning sessions, hair care products, makeup, even bikinis and cosmetic surgery, technically speaking these things fail the so called 'housewife test'. The IRS criteria for deductible business expenses stems from the fact that these expenses are for business and not for personal benefit. Thus if a 'housewife' - i.e. a person who has no business reason to do so - buys tanning sessions, hair care products, makeup, bikinis, cosmetic surgery etc. then it is arguable that she is doing so for purely personal benefit thus a dancer spending money on the same sort of things must also be of personal benefit and not deductible as a business expense. However, the IRS's own rules regarding 'ordinary and necessary' expenses required to conduct business conflict with the 'housewife test' under many circumstances. In the real world, many dancers claim 50% of the actual expenses for items that fail the 'housewife test' as business deductions, a concession that these items are 50% for business reasons and 50% for personal benefit.

    Obviously, business expense deductions can be taken 100% for items which are clearly and only of a business nature. This includes travel expenses to out of town clubs (usually requires an overnight stay away from home to placate the IRS), 5" stilettos & 8" platform shoes & costumes which no 'housewife' would ever wear on the street, theatrical makeup, websites and cell phones used exclusively for promoting business etc. There is also an IRS letter ruling allowing a 100% business expense deduction for 'professional sized' breast implants i.e. larger than 1000cc (each)."




    This was very helpful but i would like to hear from a few more people exactly what they have deducted and what they found that the common rules for the deductions were.





    Quote Originally Posted by Emily View Post
    If they are spending money, we don't call them stalkers. We call them Regulars.
    Quote Originally Posted by Miss_Luscious View Post
    Fuck these people, seriously. Fuck them in the ass without lube or warning.
    LMAO!!!!

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    Default Re: Tax Deductions for dancers

    I would add the following about the 'home office' tax deduction. This particular deduction has been abused by people in all sorts of businesses, and is a favorite yellow flag for IRS audits. In general, in order to confidently claim a 'home office' tax deduction, the person needs to allocate an entire room as that home office area. The person also should be able to show separate and distinct expenses related to that home office i.e. a second 'business only' phone / fax line (although this isn't as important in the age of land line plus cell phone), a second computer etc. which aren't heavily intermingling business use with personal use of the same items. It also helps if the 'business' is registered in some way i.e. a DBA an LLC etc. I'm not saying that these things are absolutely necessary, only that an IRS auditor would have lots of argument to disallow a home office deduction that occupies part of a room, that shares the same phone / computer etc., and that is used in support of an unregistered sole proprietor business.

    I would also add in regard to a home 'dance studio' business that homeowners / renters insurance does NOT cover liability against injury for 'paying' customers. Thus you may want to research that issue in some detail. In other words, the IRS knows that any serious home 'dance studio' business needs to purchase additional insurance, and will look for evidence of that additional insurance (or lack thereof) when determining whether or not a home 'dance studio' business is a serious money making effort or a tax scam.

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