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Thread: Taxes - why would I be told this?

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    Featured Member exotica268's Avatar
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    Default Taxes - why would I be told this?

    So my dad asked me what I was up to this week, and I told him I was going to get my taxes done. He then told me not to do that, because they'd start looking back to previous years. That doesn't make sense to me, because couldn't they start doing that anyway? It's not like they don't have my info...I've filed before. This would be me first year filing as an independent contractor, tho, since I've always held bartending or waitressing jobs while simultaneously dancing.

    Quick background: I don't dance much...sometimes months go by and I don't set foot in the club. For ex., I recently took a 5 month break when I started grad school and my internship, and I just relied on loans and bartending @two dif places.

    For tax purposes, if I am working, say 1 day/week @the club, I'd say that I made more $ at baretending job.

    Would I be more likely to get audited if I write things off?

    I just started a club that's linked to Deja Vu clubs, and they give me a receipt @the end of my night that says what I paid out and my base pay. Will I eventually get tax forms from
    them?

    Also, I read awhile ago that the irs has a certain # in mind of what dancers make. If there's no evidence of how often one goes to work, what can they base this on?

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    God/dess shanna dior's Avatar
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    Default Re: Taxes - why would I be told this?

    So, are you filing as an independent contractor or claiming your earnings as bartending tips? You've mentioned both options in your post, but if you do the latter, you certainly won't be able to write any stripping stuff off.

    Deja Vu clubs do send out tax forms, so you'll have to claim everything they said you've earned as an independent contractor, yes.

    The IRS tends to only take issue with dancers who either don't file taxes but make big-ticket purchases (red flags) or who claim less than they're spending (they base this on things like average accommodation and living expenses in your area, big-ticket purchases, etc.). So as long as you aren't claiming significantly less money than you need to explain your standard of living, it shouldn't be a problem. It helps to keep record of your earnings (including shifts) in case you are audited though.

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    Featured Member exotica268's Avatar
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    Default Re: Taxes - why would I be told this?

    Well, I've never filed as an IC before, but I'm going to start. I've claimed tips as a bartender, but I claimed more than I actually made bartending. For instance, if I went to the club one day, and I made $300, and then I worked 2 days as a bartender and made $60 each day. Instead of claiming $60 (on the computer before I clocked-out from the bar), I'd claim $210, each day. That way, I'd end up claiming a total of $300 (from dancing) + $120 (bartending).

    I lived under difference circumstances several months ago - I lived rent-free, because my ex didn't charge me to live in his house. How would I account for the latter, if I were to get audited?

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    Default Re: Taxes - why would I be told this?

    Quote Originally Posted by exotica268 View Post
    ... I don't dance much...sometimes months go by and I don't set foot in the club. For ex., I recently took a 5 month break when I started grad school and my internship, and I just relied on loans and bartending @two dif places.

    ... If there's no evidence of how often one goes to work, what can they base this on?
    The IRS should only know the total dollars paid to you, via 1099 or W2, it is up to you to keep records of the days worked. (Which you should do anyway for purposes of automobile mileage, etc. if you are itemizing.) It is important to list all reported income, because the IRS does computer matching, and even catches <$10 amounts...

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    Banned Melonie's Avatar
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    Default Re: Taxes - why would I be told this?

    Since you mentioned that you are a student, your father's concerns probably stem from his continued ability to claim you as a dependent on his own tax return. There are strict IRS rules in this regard, which require that the parent can show they provided more than 51% of their child's financial support. If you are reporting say $10,000 in 2011 income, in order for your parent to continue claiming you as a dependent they would need to show the IRS that their own after-tax earnings, after making a mortgage payment, car payment, utility bill payments, buying groceries etc., was still sufficient to allow them to 'give' you $10,001 !!! Utilizing student loans removes tuition money from that equation. Living rent free outside of your parents' home removes rent money from that equation.

    There may be additional concerns about the FAFSA student loan / grant applications your father submits on your behalf, where eligibility is based on the sum total of all incomes in the 'household' ( which includes YOUR income as well as your parents' income ).
    Last edited by Melonie; 02-12-2012 at 03:20 PM.

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    Featured Member exotica268's Avatar
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    Default Re: Taxes - why would I be told this?

    Quote Originally Posted by Melonie View Post
    Since you mentioned that you are a student, your father's concerns probably stem from his continued ability to claim you as a dependent on his own tax return. There may be additional concerns about the FAFSA student loan / grant applications your father submits on your behalf, where eligibility is based on the sum total of all incomes in the 'household' ( which includes YOUR income as well as your parents' income ).
    I'm not a dependent anymore, as I'm 28 y/o. Also, I submit my own FAFSA w/o my parents' info.

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    Banned Melonie's Avatar
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    Default Re: Taxes - why would I be told this?

    Since you are clearly 'emancipated', then I have no idea why !!!

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    Featured Member exotica268's Avatar
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    Default Re: Taxes - why would I be told this?

    I mean, I guess I could understand if I'd never filed my taxes before, but it's not like my name already isn't in the "pool" to be one of the "random" ones chosen to audit...

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    God/dess Zofia's Avatar
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    Default Re: Taxes - why would I be told this?

    Sometimes the service does audit randomly. But, not often. They prefer to audit high income earners. That's where the tax dollars are.

    Housing is not a deductible expense, so the IRS does not care what you paid for it. A home mortgage is deductible, and you get a report from the bank.

    Commuting expenses are not deductible, so don't try. They are an audit trigger.

    On the 1040, there are a very limited number of expenses you can write off and significant limits for employee business expenses. However, Schedule C is where you take your ordinary and necessary business expenses as deductions from sales.

    HTH
    Z

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