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Thread: Filing taxes & Write offs??

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    Veteran Member ohiogirl26's Avatar
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    Duh Filing taxes & Write offs??

    Ok,

    I'm totally new to dancing & this will be the first year I will be filing taxes with this occupation (Obviously).

    My question is.....since we all own our own business (stripping), should I be saving all the receipts from my purchases like outfits, shoes, etc...?? Or do I just keep a written record of everything?

    What can I write off? Outfits, shoes, makeup, hair, nails, tan,....??? Is it basically anything that I can think of the has to do with my business at all.....?...

    I am taking pole classes & exotic dance classes, can those be included?

    I just want to make sure I get all this clear now, while I still have the receipts. That way at the end of the year, I'm not totally screwed up.

    Also, do any of you file your own or almost always just hire someone? I have no clue how confusing it will be.

    Thanks for any advice
    XoXo


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    Default Re: Filing taxes & Write offs??

    Honestly, a good accountant can write off all of these things, plus your gas and your gym memebership and possibly your cell phone (maybe even house fees). If you are good with numbers do your own taxes, otherwise hire someone. It's not as expensive as you think! Plus, it's better to pay quarterly than get a huge bill at the end of the year.
    XoXo Gia
    Danielle Fishell (the Dish): "If the Super-Star thing doesn't work out, Gia makes a great stripper name"

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    God/dess verfolgung's Avatar
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    Default Re: Filing taxes & Write offs??

    Past threads you may find useful ...

    "Tax Deductions for Dancers"
    http://forum.stripperweb.com/showthread.php?t=131333


    "What Types of Deductions Can I Claim When Filing Taxes?"
    http://forum.stripperweb.com/showthread.php?t=59996
    If you can't win. Make the fellow in front of you break the record.


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    Banned Melonie's Avatar
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    Default Re: Filing taxes & Write offs??

    yes you should keep receipts,

    As to legitimate tax deductible expenses, the IRS is guided by the so-called 'housewife test'. If the item is something that housewives spend money on with no legitimate business purpose, the IRS can argue that the item is of 'personal' value and thus not a legitimate business expense tax deductions.

    Although 'housewives' do attend pole classes and exotic dance classes these days, you can probably get away with these deductions since they are so closely related to the exotic dancing industry. But millions of housewives do tanning, nails, etc. and all housewives buy WalMart makeup.

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    God/dess Zofia's Avatar
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    Default Re: Filing taxes & Write offs??

    The test for deduction of training or classes is does the class qualify you for a new profession or for continuing in your current profession. If it is for a new profession, as in your situation, then it is not an ordinary and necessary business expense. If it is not ordinary and necessary, then you cannot deduct it.

    HTH
    Z

    Short form disclaimer, this is not one of those expensive Circular 203 opinion letters.

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    Veteran Member Robertjordan's Avatar
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    Default Re: Filing taxes & Write offs??

    Quote Originally Posted by Zofia View Post
    The test for deduction of training or classes is does the class qualify you for a new profession or for continuing in your current profession. If it is for a new profession, as in your situation, then it is not an ordinary and necessary business expense. If it is not ordinary and necessary, then you cannot deduct it.

    HTH
    Z

    Short form disclaimer, this is not one of those expensive Circular 203 opinion letters.
    I respectfully disagree with your interpretation. Education expenses are not deductible to the extent they qualify you for a new profession. That means that if you wanted to become a nurse, and a nursing degree was required to be a nurse. Then classes to get a degree in nursing are not deductible. If you are a doctor and now you want to be a lawyer. You cannot deduct classes for you to go back to school and get a law degree.

    But your profession does not require classes. I'd argue that you are taking pole dancing classes to enhance your career, not qualify you for it. So yes, you could deduct expenses for your classes.

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    God/dess Zofia's Avatar
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    Default Re: Filing taxes & Write offs??

    Quote Originally Posted by Robertjordan View Post
    I respectfully disagree with your interpretation. Education expenses are not deductible to the extent they qualify you for a new profession. That means that if you wanted to become a nurse, and a nursing degree was required to be a nurse. Then classes to get a degree in nursing are not deductible. If you are a doctor and now you want to be a lawyer. You cannot deduct classes for you to go back to school and get a law degree.

    But your profession does not require classes. I'd argue that you are taking pole dancing classes to enhance your career, not qualify you for it. So yes, you could deduct expenses for your classes.
    Another poster who needs to learn to read. Ohiogirl wrote: "I'm totally new to dancing & this will be the first year I will be filing taxes with this occupation (Obviously)." If, she was an established dancer, then the continuing education rule would apply.

    Without respect,
    Z

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    Veteran Member Robertjordan's Avatar
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    Default Re: Filing taxes & Write offs??

    Quote Originally Posted by Zofia View Post
    Another poster who needs to learn to read. Ohiogirl wrote: "I'm totally new to dancing & this will be the first year I will be filing taxes with this occupation (Obviously)." If, she was an established dancer, then the continuing education rule would apply.

    Without respect,
    Z
    No need to get nasty dear. I certainly can read, perhaps you are the one who cannot.

    The IRS says nothing about whether or not you have to be "established" in your profession to deduct the education expenses. It simply says that the education cannot qualify you for a new profession. Qualify means something that is required prior to you starting that new profession. As I said, you do not need to take classes to qualify to be a stripper.

    Here, you can read it for yourself:

    [from IRS website]
    Education That Qualifies You for a New Trade or Business

    Education that is part of a program of study that will qualify you for a new trade or business is not qualifying work- related education.


    Additionally, the original poster did not say that she took the classes prior to working. As a matter of fact she said she is currently taking classes. I also understood that to mean she is currently working and taking classes which reinforces my point that the classes are not needed to qualify her for a new profession but something used to enhance her profession (which is deductible).
    Last edited by Robertjordan; 08-19-2009 at 07:12 AM.

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    Default Re: Filing taxes & Write offs??

    Here is my 2 cents on this:

    Do not repeat do not fall into the trap of thinking that because the CPA you hired deducted everything under the sun from boobjobs and lipo to tanning to gym memberships and anything else that you spend money on that normal housewives also spend money cell phones to and from work driving expenses etc etc maybe more than as "normal" women but all things that certain CPA's will and do write off for dancers and plenty of other girls from hooters girls to the lady selling BMW's or working at Macy's that will contend that an above average amount of those housewife items are "required for there job".

    Unfortunaltley the housewife test isn't "graded on a curve"

    The simple fact that you didn't get audited does not equal that those deductions are therefore 100% legal no it only means that you didn't get audited or said another somewhat harsher way you didn't get caught.

    I use the anology of driving down the freeway at 110MPH at 3 AM you don't get caught because no cops are out there to notice but that does not mean that the speed limit is now 110MPH

    Also don't take the approach of just not reporting the money that pays for those items and figure you will get your "deduction" that way.

    In other words you want to "deduct" your 800CC boobjob that cost 8 grand so you just don't report the 8 grand

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    Default Re: Filing taxes & Write offs??

    What are the write-offs for professional actors? That would be largely the same, IMO.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    God/dess Zofia's Avatar
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    Default Re: Filing taxes & Write offs??

    Quote Originally Posted by Robertjordan View Post
    No need to get nasty dear. I certainly can read, perhaps you are the one who cannot.
    No one who dances deserves the audit from hell that following your advice would bring. It is clear that you only seek to harm the dancers who genuinely seek some information here. That is the unfortunate fact of this site, there is little way to prevent someone who so obviously means harm from doing their dirty deed.

    You've been caught this time.

    Without respect,
    Z

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    Default Re: Filing taxes & Write offs??

    I use the anology of driving down the freeway at 110MPH at 3 AM you don't get caught because no cops are out there to notice but that does not mean that the speed limit is now 110MPH

    Also don't take the approach of just not reporting the money that pays for those items and figure you will get your "deduction" that way.

    In other words you want to "deduct" your 800CC boobjob that cost 8 grand so you just don't report the 8 grand

    While I don't want to overdramatize the tax situation for original poster OhioGirl or any other new dancers, your post does touch on a number of IRS issues that need to be visited in greater detail ...

    - about your 110 mph example, where traffic cops are concerned you may choose to drive 110 mph repeatedly and only get 'busted' the third time you do it. As such, you will get one (expensive) speeding ticket. However, if the IRS audits you and rejects your overly self-serving deductions the third time you do it, the IRS will also go 'back in time' via past tax returns and also bust you for the previous two times you did it. As such, you may wind up with a whopping IRS bill for three years worth of back taxes plus penalties plus interest.

    - also from your 110mph example, traffic cops have a solid 'yardstick' called radar that can determine exactly how fast you were going. On the one hand, this prevents you from claiming you were only going 80 ... but on the other hand this also prevents the cops from claiming that you were going 130. But for independent contractor dancers whose incomes can only be 'self-documented' ( i.e. there is no 3rd party official documentation of actual income like an employer's W2 ), there is nothing stopping the IRS from forming their own 'estimate' that the dancer was driving 130 ( = earning $130,000 a year ) after the dancer claimed that she was driving 80 ( = earning $80,000 a year ) even though the 'real' value was 110 ( = earning $110,000 per year ).

    - as to your 'boob job' example, the IRS has ever larger amounts of financial data available via 3rd party transaction records of a person's 'spending'. Should the IRS have reason to inquire, 5 minutes worth of computerized financial inquiries would very probably turn up records of the $8,000 plastic surgery expense, plus college tuition expenses, plus savings / investments additions, plus credit card expenditures, plus rent / lease / mortgage payment expenditures, plus car purchase / loan expenditures etc. Combined with the IRS database of actual costs of living for every zip code area, this means that within 10 minutes the IRS can assemble a rough estimate of the total amount of money that a person has actually 'spent' in the last year. One minute later, the IRS computers will have compared this rough estimate to the actual amount of income reported by that person on last year's tax return - with any serious 'shortfall' between reported earnings and estimated actual expenditures setting a red flag for further investigation.
    Last edited by Melonie; 08-23-2009 at 02:53 AM.

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    Default Re: Filing taxes & Write offs??

    Melonie

    My point I was trying to make was/is to refute what you hear all the time. People will state that because they didn't get audited that therefore all the deductions that their push the limit CPA made, for tanning, hair and nails and gym memberships and other examples of "housewife items" were/are all "legal" when clearly this is not the case not any more than it would be if because you did drive 110 without getting caught the highway department would be out the next day putting up new signs. No the speed limit is still the same, the fact that you didn't get "audited" if you will does not change what the signs read.

    As far as the other what I was saying is don't decide that if you can't get your "deduction" one way don't decide you will just get it by not reporting the money to begin with, because as you note but plenty of cash workers dancers in included are not wanting to believe your chances of getting caught these days are very good.

    I would imagine there are more than a few PS's out there who will still do a boob job for a briefcase with 8 grand in cash in it and ask no questions and keep no records.

    It's not like the dancer has to "register" the new boobies or the PS has to "report the sale"

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    Default Re: Filing taxes & Write offs??

    I would imagine there are more than a few PS's out there who will still do a boob job for a briefcase with 8 grand in cash in it and ask no questions and keep no records.
    actually, in the US at least, the chances of this are practically zero. The reason is that every set of implants sold now has a unique serial number which must be registered to the patient receiving them by the doctor performing the surgery. This of course creates a paper trail that no American surgeon's malpractice insurance carrier would allow them to breach.

    FYI the serial number is stamped right onto the implants, and has already been used by police forensics to identify some corpses !

    Back on topic, the fact that the sale of American implants now creates a paper trail that could potentially be followed by the IRS ( ex pursuing the doctor ) is just one detail in a long list of 'expenditures' that now create a paper trail. Many are automatically reported to the IRS i.e. sent to IRS computers without the IRS even needing to ask for the information. These now stem from house and car titles, to college tuition payments, to any cash transation over $3,000 to $10,000 ( varies by state) either retail purchase or bank transaction, to the purchase of $1,000 worth of money orders in the same day etc. Also, of particular interest to dancers is the fact that bank tellers are required to file 'suspicious activity' reports to the IRS if they see a customer following an unusual pattern of cash transactions ( i.e. a fairly young girl routinely depositing $2,000 worth of small bills every monday ).

    Thus the IRS already has this information on the 'spending' side of the equation, and IRS computers run routine cross-checks to see if the person listed as making these expenditures also filed a tax return with a reported income level that is plausible given the amount of money they are 'spending' plus the average cost of living in the person's zip code area. Any implausible search results ( i.e. the person just bought a new car for $20,000 in cash, but only reported an income of $25,000 last year) is extremely likely to flag that person for further investigation by a 'human' auditor. Once an inquiry starts, it only takes 5 minutes for the IRS to have a copy of all of that person's bank transactions, credit card transactions, investment activity, rent and utility bill activity etc. - which cumulatively allow an accurate estimate of the person's true spending levels to be formulated by the IRS. If those spending levels do not jive with the amount of reported income the person filed on their tax return, a full-blown IRS audit will quickly follow.

    Because of all of this 'spending side' information sharing, it is really no longer possible for a dancer to simply 'forget' to report her income. As soon as that dancer makes a tuition payment, buys a car, purchases / leases real estate, or even just buys an expensive consumer item, the IRS computers are going to receive an automatic transaction report and automatically start searching for a matching tax return. I would also add that even if a dancer avoids doing any of these things, it is still possible for the IRS to come 'looking'. 2-3% of tax returns are randomly audited every year, and the IRS has recently established a special enforcement unit for 'adult businesses' which probably will raise that percentage for dancers. Audits of strip clubs will quickly turn up the club's file of dancer's real names, real ages, real Social Security numbers etc. allowing the IRS to 'expand their search' to a quick cross-check of the dancers listed. In addition, girls who do webcam / internet work may have their real names, real ages, real SS#'s wind up in the hands of the IRS due to an audit of their 'web host'.

    The bottom line is that the computer age has arrived at the IRS and it's not the '90's anymore. The fact that strip clubs do not automatically report dancer incomes to the IRS does NOT mean that the IRS is 'unaware' of a dancer's existance.

    ~
    Last edited by Melonie; 08-24-2009 at 03:42 AM.

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    Veteran Member Robertjordan's Avatar
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    Default Re: Filing taxes & Write offs??

    Quote Originally Posted by Zofia View Post
    No one who dances deserves the audit from hell that following your advice would bring. It is clear that you only seek to harm the dancers who genuinely seek some information here. That is the unfortunate fact of this site, there is little way to prevent someone who so obviously means harm from doing their dirty deed.

    You've been caught this time.

    Without respect,
    Z
    Lol, you're funny. I seek to harm the dancers who read this, you're right I'm busted! Silly me... Wrong!!!

    Still not sure where the hostility comes from chicky. Anyhow, if you know anything about taxes and audits you should know that a) there are many rules that are subject to interpretation and b) the IRS is interested in auditing big numbers.

    As to subject one. I think I made it clear on my position that the education is deductible. I understand you interpreting it the other way. I don't agree with you but I can see where you are coming from. Do a little research on the subject and you'll see that there has been considerable legal issues on whether or not an MBA is deductible. An MBA isn't specifically required for any trade although sometimes it's required for employment. MBA students would argue that it helps them in their current job while the IRS suggests that it allows them to be employed for positions that require an MBA.

    Back to our point on strippers and the dance classes. Does the club require classes prior to employment? Do any clubs require the classes? I'm pretty sure they don't but if I'm wrong maybe your point is more valid.

    As to my second point, I can only guess what is the cost of the classes. I did a quick search on the Net and found they ranged from under $100 to a couple hundred dollars. Even if they were 2-3 times that amount, that particular deduction is so far under the radar of the IRS as to not trigger an audit. I suppose if you reported income of $50k and classes of $10k, you could set off some red flags. But if they are a couple hundred dollars I can guarantee you that alone is not reason for the IRS to consider you for an audit.

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