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Thread: Traveling Dancers' Taxes/Write Offs

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    Default Traveling Dancers' Taxes/Write Offs

    I didn't really do it last year, but if I travel this year Im wondering exactly what I can and cannot write off for next years taxes. The tax person @ H & R Block said that airfare/hotel/etc can be written off, but I have to file state taxes for that state. Is this true? In that case it might just be better to eat the costs of traveling myself but not claim the income I make for the 3-5 days Im there. Thoughts? Experiences? Thank you in advance!

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    Default Re: Traveling Dancers' Taxes/Write Offs

    Quote Originally Posted by Jianna View Post
    I didn't really do it last year, but if I travel this year Im wondering exactly what I can and cannot write off for next years taxes. The tax person @ H & R Block said that airfare/hotel/etc can be written off, but I have to file state taxes for that state. Is this true? In that case it might just be better to eat the costs of traveling myself but not claim the income I make for the 3-5 days Im there. Thoughts? Experiences? Thank you in advance!
    Yes, all those things are deductible from dancing income. Yes, if you dance out of your state of residence, you will have to file and pay income taxes in each state where you dance. How advantageous this is depends on your state's tax rate, other states tax rates, how high your deductible expenses are. Other than depreciation on a car, dancers do not have a lot of non-cash deductions, so all those deductions represent real outlays. The best thing you can do is run the numbers both ways. I know when I did it, I always filed and deducted my expenses.

    HTH
    Z

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    Banned Melonie's Avatar
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    Default Re: Traveling Dancers' Taxes/Write Offs

    ^^^ Zofia is 100% correct on this. One year I wound up filing tax returns in six different states, as well as claiming 'out of state' tax credits on my home state tax return. Keeping track of travel and accomodation expenses and claiming them as 'business expense' tax deductions ALWAYS wound up saving me money in the long run.

    These days, there is also an increasing risk that a 'corporate' club is going to issue travelling dancers a 1099 form reporting their income to the IRS for total annual earnings amounts as low as $600. If that happens, the travelling dancer MUST make a matching report of income on her own federal tax return. The effects will be less painful if the dancer also has kept track of the business expense tax deductions corresponding to that 1099 income.

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    Default Re: Traveling Dancers' Taxes/Write Offs

    The other thing I would add is don't dance in California unless you are going to make a lot of money there. They have a "universal" tax theory that taxes all your out of state earnings and allows you a deduction for your out of state taxes. If, and most states are, you dance in lower tax states, the Cali bite can be big. So, it makes no sense to expose yourself to that kind of liability unless you: 1) make a lot of money in Cali and 2) really, really, really like to live there.

    XOXO
    Z

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    Banned Melonie's Avatar
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    Default Re: Traveling Dancers' Taxes/Write Offs

    ^^^ I assume that you're talking about the California 'business nexus' principle ... that basically says that any 'business' with operations in the state of California ( i.e. an independent contractor dancer ) is also liable for the payment of California state income taxes on money earned in other US states and foreign countries by that same 'business'. Indeed this is both complicated as well as 'expensive' ( in terms of additional taxes due to the state of California ), and has ( not surprisingly ) prompted many 'businesses' based in California to leave the state as well as prompted many other 'businesses' not based in California to stop doing business / earning money in California. Indeed a few California girls I know have been hit with surprise California state tax bills for money they earned while dancing in Vegas, for money they earned doing magazine / video work in Florida etc.

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    Default Re: Traveling Dancers' Taxes/Write Offs

    California definitely is an aggressive state with regards to taxes but I want to made an addition in hope to clarify what was said.

    If you live or are incorporated in California, then yes, you are taxed on all income wherever you make it and then yes you do get a tax credit for taxes paid in other states where that money was earned.

    If you live or are incorporated in another state, then only your California income is taxed by California.

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    Default Re: Traveling Dancers' Taxes/Write Offs

    If you live or are incorporated in another state, then only your California income is taxed by California.
    This isn't a clear matter of legal fact ... depending on whether or not the business entity ( and independent contractor dancer IS a business entity ) is considered to have established a 'business nexus' in California. Arguably, it's more a matter of lack of previous enforcement by the Cal Franchise Tax Board re non-resident business entities actually reporting ( or not reporting ) their California earnings. As california clubs increasingly issue 1099's to dancers ( both resident and non-resident ), and with the state of California experiencing worsening state budget problems, the probability of attracting Cal FTB attention increases as well.

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    Last edited by Melonie; 03-30-2011 at 01:36 AM.

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    Default Re: Traveling Dancers' Taxes/Write Offs

    Business income for non-California corporations is apportioned to California using a formula (California Revenue and Taxation Code section 25128(c).)

    Personal income for noresidents is taxed by California from income derived from sources in California.

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