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Thread: Escorting and the IRS

  1. #1
    Moderator Miss_McKenna's Avatar
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    Question Escorting and the IRS

    I'm hoping some of you ladies can help me as I really want to start off on the right foot in terms of being above-board with my escorting income. I did a search for this but the advice is so mixed up between escorting/camming/selling content etc.

    I understand that as it's my first time paying taxes for this,for the first year I can pay it all a year from now without any penalties for not doing quarterly payments. So I'm wondering, with escorting being a touchy subject in terms of legality, how do I approach this in terms of the IRS? I figured you just put down a similar job, such as modelling or the generic 'consulting" but is actually legal to do this, or can you be punished for putting down that the money came from a job that you don't really do? Also, won't the IRS be suspicious if you suddenly begin earning a large income and all your deductions are for things like hotel rooms, advertising for appointments on adult sites and things?? I guess you could avoid that by not deducting them, but if I'm going to be losing 30% of my money to taxes, I want to be able to at least claim legitimate deductions! Will it raise a red flag or even get you in legal trouble, if you are claiming money as a consultant or personal assistant, and the deductions and cash income point to escorting? Someone suggested to me that instead of claiming deductions, she just takes it out of the income she declares - for example, instead of having $500 income from an appointment and deducting a $100 hotel room, she just declares $400 in income. Is this ok to do, or is it more "proper" to declare the full income and then all the deductions.

    Also, do you file as self-employed, or an independent contractor? I guess technically I'm an independent contractor through dancing, although I've never received a 1099, so I'm not sure if I would be considered that for escorting too? Or would I be self-employed, although I haven't officially registered a business name or anything like that? I saw some people on here recommend having a second bank account just for business expenses, so I'm planning to do that.

    *confused* I'd REALLY appreciate any advice, either here or by pm!

    xox


  2. #2
    God/dess BlkSharpie's Avatar
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    Default Re: Escorting and the IRS

    The IRS doesnt care what you do, they just want their cut of the money. As a matter of fact, its worse to get caught for tax evasion than it is to be caught for escorting. So it doesnt matter what you put down as your occupation, as long as you declare all your income. You can definitely claim all of your deductions, and its important to keep receipts as well. Im claiming everything that I use for my business, from my web host/domain, any screening/membership sites escort related, accommodations, flights, makeup, my wigs, lingerie and underwear, condoms, lube, plus stuff I cant think of right now...I also track my gas and mileage for getting to my incall/outcall, and all my travel expenses when I tour too.

    When I did cammed, my tax preparer told me to gather up every single thing I used for my business...luckily most of the stuff I purchased online, and I never delete emails, so I just sent her all the reciepts Id gotten to see what I could claim, and she said all of them counted since it was directly related to my business. Oh, and when I get my implants this summer (*crossing my fingers!*) esp since Im going big Im claiming that too.

    Oh, btw... I file sole-proprietor, consultant. I do suggest seeking out professional advice though to be sure. The lady I went through is called "The Tax Domme" she specializes in entertainment/adult taxes and used to post on here regularly....she doesnt anymore but shes still in biz. Shes managed to sort through my horrible mess of taxes...shes also discrete and pure awesomeness

    If I were you, Id get in touch with her or whichever accountant you choose asap, since this is the busiest time of year for tax professionals.
    Don't blink. Don't even blink. Blink and you're dead. Don't turn your back. Don't look away. And don't blink!

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    Banned Melonie's Avatar
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    Default Re: Escorting and the IRS

    Agreed that the IRS is primarily concerned that all of your earnings are reported and that they get their 'cut'.

    If you want to help 'legitimize' the appearance of your business earnings, you may want to research the formation of an S-Corp. By doing this, your 'corporation' takes the business expense tax deductions, nets out earnings versus expenses, and pays you a 'salary'. Your own personal tax return then shows you as an 'employee' of your S-Corp, without any direct linkage to the business transactions of that S-Corp. This may involve two tax returns, but it also provides a whole bunch of 'isolation' for you personally. And there can be some legal tax savings as well - particularly so if your earnings fall in the $100k+ range. But the primary advantage is that any future straight job employer, creditor, landlord etc. would only be shown your personal tax return ... which would only inform them that you worked for ABC corporation and earned X dollars.

    Someone suggested to me that instead of claiming deductions, she just takes it out of the income she declares - for example, instead of having $500 income from an appointment and deducting a $100 hotel room, she just declares $400 in income. Is this ok to do, or is it more "proper" to declare the full income and then all the deductions.
    Technically speaking, the $500 in 'sales revenues' and the $100 in business expenses should be listed separately. Again, the 'best' way is to let an S-Corp report these details under a separate EIN.

    see
    Last edited by Melonie; 02-19-2012 at 05:59 AM.

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    Veteran Member SweetPinkCupcake's Avatar
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    Default Re: Escorting and the IRS

    I'm writing consultant on my taxes....I'm forming a corporation next year tho, for sure....I want to be able to deduct the thousands I spent on hotels at the end of last year in Manhattan! And the thousands I am probably going to spend on hotels or a permanent incall location this year. But isn't there some kind of red tape in deducting a hotel room if it is 50 miles to where you live? Is there any way to get past that? Maybe getting a Mailbox in another state and declaring that as your address? :/

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    Banned Melonie's Avatar
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    Default Re: Escorting and the IRS

    ^^^ forming a corporation, and having the corporation purchase and maintain a permanent in-call location, will have the most favorable outcome re overall tax liabilities. Forming a corporation, and having the corporation foot the bill for hotel space, would have some favorable outcome re overall tax liabilities. But an unincorporated single owner business attempting to write off 'local' hotel bills incurred in the name of the business owner is prime audit bait. However, if the corporation's official address is located in a different state from that where the hotel bills are incurred, those hotel bills won't be considered 'local' upon cursory examination anyhow.

    Unfortunately, due to 'tax home' laws, there's no way for an unincorporated business to successfully claim that it is based in a different location than the 'tax home' of its owner. In extremely basic terms, 'corporation' means creation of an additional person for legal / tax purposes. Thus as a separate 'person', a corporation can be based in a different location from its owner. But where an unincorporated business is concerned, the same person cannot be located in two places at once.

    As I have stated in previous threads, there were many reasons that my own S-Corp was formed in the state of Wyoming while I was residing in the state of NY. The ability to write off some number of otherwise 'local' business expenses was one of those reasons. A large 'level of separation' between the out of state S-Corporation actually making the hotel bookings etc., between the out of state corporate bank account actually paying those hotel bookings etc., and me personally, was another one of those reasons.
    Last edited by Melonie; 03-30-2013 at 08:30 AM.

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