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Thread: Clubs that Issue 1099s

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    Default Clubs that Issue 1099s

    So I am working at a club that issues 1099s to dancers. I am a little confused about this particular form. I am reading that some clubs only include payments from the club to you on the 1099, such as when a customer books a Champaign Room and you and the club share the proceeds or when the club pays you cash for your funny money. I am curious what different clubs include on the 1099. Does anyone work at a club where they count individual dances and report that on the 1099? Because I thought the purpose of a 1099 was for the club to report payments to you. However, the money from individual dances is usually paid directly to the dancer from the customer.

    Also, do clubs issue 1099s each quarter so you can make estimated tax payments or only at year end?

    I also plan to ask a manager about this next time I work, but the curiousity is killing me.

    Thanks for the help girls
    -Kiti-

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    Default Re: Clubs that Issue 1099s

    I've worked at a lot of clubs. I've seen them report estimated earnings from dances on the 1099 (Deja Vu clubs in San Fran did this)... but they had no way to report your full earnings - such as stage tips.
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    Default Re: Clubs that Issue 1099s

    You'll probably be able to understand 1099's better if you think about them from the point of view of the club. From an accounting and tax standpoint, every dollar taken in at the club's cash register or via the club's credit card merchant account must be accounted for in one way or another. If the club uses it's cash register or credit card merchant account to receive money from customers, that money is considered to be the club's (taxable) income UNLESS the club can also show that the money received from customers was in turn paid out to dancers. THIS is the purpose of the 1099-misc form being issued.

    If customer money is being paid directly from customers to dancers on a 100% basis, then that money never enters the club's 'hands' - meaning that it would never have to be accounted for by the club - and also meaning that the club has no reason to account for it thus no reason for it to appear on a club issued 1099. Thus the only real reason that clubs issue 1099's to dancers is to minimize their own tax liability by 'transferring' money the club received from customers that would otherwise have been considered as club income to become dancer income instead.

    However, if customer money is being paid directly from customers to dancers, but some portion of that money actually 'belongs' to the club - such as clubs that collect a 50-50% 'split' of private dance and/or VIP money - then accounting gets messy. When the dancers turn over the club's 50% 'split' of customer money to the club, the club must account for that money ( by law anyhow LOL ). But there are a lot of options as to HOW the club must account for that money. One method is to book the entire 100% as if it were originally transferred from the customer to the club, with the club then paying out the dancer's 50%. Another way is for the club to only book its own 50% share. These two methods result in very different consequences re club issued 1099's.

    In general, the IRS is well aware that club payouts to dancers as listed on club issued 1099-misc forms only constitutes a fraction of actual dancer incomes. The IRS is well aware that 'tip' income and 'other' income also exists. Thus the IRS expects to see a total income number reported on dancer Schedule C's that includes both 1099-misc income as well as 'tip' and 'other' income.

    I would also add that a similar but different 1099-misc form situation also exists with webcam hosts ... but with no opportunity for the webcam girl to have directly received money from webcam customers, the subsequent 1099-misc amounts listed by webcam hosts will be all inclusive.

    1099's only need to be issued on an annual basis. Thus it is the dancer's responsibility to estimate her quarterly income, and to make her quarterly estimated tax payments, without the 'help' of club 1099-misc info.

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    Default Re: Clubs that Issue 1099s

    Thanks for the help ladies.

    Melonie, your post confirms what I thought about 1099s. My club doesn't take a cut of individual dance money, just rooms, so it I guess it is up to me to keep track of my earnings for taxes.

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    Default Re: Clubs that Issue 1099s

    ^^^ yup this is true. And don't forget that along with keeping track of your tip earnings, your private dance earnings, and your 'share' of VIP room earnings, you also need to keep track of your expenses i.e. tipouts, costumes and shoes etc.

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