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Thread: Anonymity, Taxes, Payment method and more

  1. #1
    Veteran Member amberose's Avatar
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    Default Anonymity, Taxes, Payment method and more

    Hi everyone!

    I am new to dancing. In the past, I had some experience web dancing independently (just promoting myself, not through a company) unfortunately at the time, I wasn't very smart about it and didn't know that paypal didn't allow sexual services/items so my account was frozen, and I stopped.

    I'm interested in doing this again, but more thought out, and I do plan to do this independently (promoting myself though social networking, chat rooms, etc) so I would essentially have my own business.

    My first concern is filing taxes. I don't mind doing my taxes, but I am worried because my future career of choice would not look at a stripping history favorably if an employer did a background check. I realize that I need to write down the nature of the work when doing my tax forms. (Are there other regional things to keep in mind when starting a home business?) Any way to get around this coming up to employers in the future? I was thinking that I could start a photography business (which I was planning to do anyway), it would be a really really small side gig but could I just register this business instead and claim that my income comes from that? I would make a website for it and everything. Would the IRS look into it in detail/would it look suspicious? I realize that I wouldn't be able to write stripper items off the taxes, which is fine by me if this would work.

    By the way, I don't plan on making more than $10,000 during the first year. I'm a student and I've been doing grants/loans to pay for school. I have also considered not filing my taxes (yes, naughty me) because I could just say that my living expenses are paid for by the school, and I would be withdrawing money from the bank in small increments and not buying anything big or expensive.

    What are my options?

    Next question...does anybody know of a legit paypal alternative? I need something that will be easy for clients to use and isn't a scam or anything. I've heard of the website "paypal alternative" but I'm not sure if it's legit or not. I wouldn't mind paying a small monthly fee for a service.

    Also, since I'm a student and also considered a dependent (bc I'm under 24, although my family doesn't support me whatsoever) is it possible that when I do my financial aid that my tax report could be seen by my family in any way...I'm guessing not but I want to make sure there aren't any weird loopholes.

    And one more question. What is the average that somebody pays for a web cam stripper per minute? What would be a cheap, but still reasonable amount? Anyone else have experience doing this independently?

    Thanks for your time!

    **(by the way, in addition to the taxes, I'm doing everything else in my power to keep myself at least somewhat anonymous. wig, color contacts, makeup, separate computer/ip address, etc. etc. Anybody know of a way to block out certain area codes from contacting me as well/seeing others area codes? thanks)

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    Banned Melonie's Avatar
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    Default Re: Anonymity, Taxes, Payment method and more

    I'll drop the sugar coating and lay out a possible scenario.

    When your parents file for your student grant money from FAFSA the law requires that 'total household income' be listed. This includes your parents' income PLUS your dancing income. Presumably you follow through on your inclination not to file taxes, and also don't tell your parents about your dancing income. So they file the student grant / loan form based only on the parents' income and you get the grant / loan money. They also list you as a dependent on their tax return ( name and social security number ).

    Out of the blue, next March a 1099 shows up from the club you are working at reporting X thousand dollars worth of income. A copy also arrives at the IRS, and their computers march off to locate a tax return filed by a person with the same name and social security number as was listed on the 1099. Since you didn't file a tax return reporting your income, the IRS computers come up empty on their tax return search. Well not quite - the IRS computers will find you listed as a dependent on your parents' tax return.

    At this point, three things are likely to happen. First, your parents are likely to be audited by the IRS as they try to find the X thousand dollar's worth of 1099 income their dependent earned that doesn't seem to have been reported anywhere. Next, FAFSA will investigate the IRS report that your parents may have made a 'false' application upon which they paid out grant money for which the X thousand dollars worth of extra income would have made you ( partially ) ineligible ... and will expect the parents who filed the 'false' application to immediately repay any ( partially ) ineligible grant money. And lastly, both you and your parents will be placed on an IRS 'watch list' that greatly increases the probability of IRS attention in future years.


    To answer your question in a less intimidating manner, if you are a dependent of your parents, and if your parents are filing for your student grant / loan money, they MUST be made aware of your dancing income so that they can properly add it to the 'total household income' figure required on the FAFSA application.

  3. #3
    Veteran Member amberose's Avatar
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    Default Re: Anonymity, Taxes, Payment method and more

    That's good to know, I was leaning towards doing my taxes anyway. Any chances of family finding out through financial aid if I do do my taxes? And any thoughts of the rest of the tax situation?

    Thanks.

    Edit: nvm, saw the last part of your post...still doesn't make sense to me though. Because I have to report my personal income to the school and show them my taxes. Even if I reported my income just to the school, they would require that my income be added to my families income as well and I would have to tell my parents?

    edit again: btw, I'm filling out my own FAFSA. All my parents are doing is giving me a copy of their tax forms. I fill out everything else because they don't help me.

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    Banned Melonie's Avatar
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    Default Re: Anonymity, Taxes, Payment method and more

    Well you're going to have to explain the existance of your X thousand dollars of income to your parents somehow !!! Even if you do file a tax return in your own name for that X thousand dollars of dancing income, if your parents don't include your income in the 'total household income' calculation when applying for your student grant / loan money, FAFSA is still going to find out that the actual amount of income reported by your parents plus yourself is higher than the 'total household income' your parents entered on your student grant application ... and FAFSA will still come looking for repayment of the ( partially ) ineligible grant money.

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    Veteran Member amberose's Avatar
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    Default Re: Anonymity, Taxes, Payment method and more

    I edited my above post too clarify the situation.

    Basically I'm asking how would they find out about my extra income personally? They don't fill any of the paper work out. The only way they would find out is if financial aid sent them a letter. Does this happen?

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    Veteran Member amberose's Avatar
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    Default Re: Anonymity, Taxes, Payment method and more

    Ah, now I see the rest of your message. That's interesting, I will look into that more. Hmm...in that case, I guess I would have to make enough money to forgo the fafsa application or take a break from school. Thanks for the information though, that is really helpful!

    FAFSA confusion aside, do you have any thoughts on the rest of the tax situation...(claiming that it's coming from my photography business, possibilities that future employers will look into it, etc) thanks again for your time, it's super helpful.

    Edit: On the FAFSA application it specifies parents income, not household income. I will ask the financial aid office about this and post what they say here.

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    Default Re: Anonymity, Taxes, Payment method and more

    (snip)The FAFSA starts with the family's taxed and untaxed income from all sources. Based on the number of people in the household, allowances are given to shelter amounts for basic needs such as housing, food, taxes, household maintenance, medical care, transportation, and savings. Neither consumer debt nor lifestyle choices are taken into account. After sheltering a large portion of income to cover basic needs, a figure called "parent contribution" or "PC" is determined. A different formula is applied to the student's earnings and assets, and a figure is derived called "student contribution" or "SC." The sum of the PC an SC is called "Expected Family Contribution" or "EFC." This is the number that determines financial aid eligibility.(snip)

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    Veteran Member amberose's Avatar
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    Default Re: Anonymity, Taxes, Payment method and more

    Yes, that's true, FAFSA does calculate your EFC. This is based off of your personal income and your parents income, which you report on separate pages. I've done FAFSA twice and I also talked to a FAFSA adviser last night asking about this. I asked them if anywhere on the form, do you manually add your personal income and parents income together to make "household income" and they told me no. FAFSA adds these two together automatically at the end. Parents income only includes mother and father, not household. So, I still don't see why my parents would need to claim my income as their income.

    Quote Originally Posted by Melonie View Post
    (snip)The FAFSA starts with the family's taxed and untaxed income from all sources. Based on the number of people in the household, allowances are given to shelter amounts for basic needs such as housing, food, taxes, household maintenance, medical care, transportation, and savings. Neither consumer debt nor lifestyle choices are taken into account. After sheltering a large portion of income to cover basic needs, a figure called "parent contribution" or "PC" is determined. A different formula is applied to the student's earnings and assets, and a figure is derived called "student contribution" or "SC." The sum of the PC an SC is called "Expected Family Contribution" or "EFC." This is the number that determines financial aid eligibility.(snip)

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    Default Re: Anonymity, Taxes, Payment method and more

    So, I still don't see why my parents would need to claim my income as their income.
    Technically they don't if you file your own tax return under your own name and do not attempt to claim yourself as a dependent ... and if you also fill out 100% of the FAFSA grant / loan application paperwork. However if you do NOT file your own tax return under your own name, the alternative place to report a dependent's income is on the parent's tax return ( which is where the IRS computers will go looking next if they don't find that a tax return filed in your own name exists ).

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    Veteran Member amberose's Avatar
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    Default Re: Anonymity, Taxes, Payment method and more

    Yup, I will be filing my own taxes under my own name. And I won't claim myself as a dependent, my parents don't either. And yeah, my parents don't touch the FAFSA stuff. So looks like I'm in the clear for that one. (Unless for some reason my parents decided to claim me as a dependent even though I'm claiming myself as independent. I don't think that would happen though, they haven't for two years).

    Now to figure out everything else. xD

    Quote Originally Posted by Melonie View Post
    Technically they don't if you file your own tax return under your own name and do not attempt to claim yourself as a dependent ... and if you also fill out 100% of the FAFSA grant / loan application paperwork. However if you do NOT file your own tax return under your own name, the alternative place to report a dependent's income is on the parent's tax return ( which is where the IRS computers will go looking next if they don't find that a tax return filed in your own name exists ).

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