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Thread: taxes and deductions ?!?!?!

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    Default taxes and deductions ?!?!?!

    this is my seconf year dancing and i didnt do my taxes last year because i wasnt compleatly sure as to how to do them ... so what all should i be saving and writing down ? also what all can i use as a tax decuction ie. hair, nails, make-up, house fees, plastic surgery ?

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    Default Re: taxes and deductions ?!?!?!

    there's lots of specific info in the sticky thread ' oh me oh my so many tax forms '.

    In the way of a brief summary, you should have written down a nightly record of your dancing earnings. You should have also written down ( and kept receipts ) for any expenses that can potentially be deducted from your tax liability. Obviously you must also have kept any 1099 forms you received from clubs, banks, etc.

    As to deductable business expense items, the IRS actually has two conflicting doctrines. The first is the so-called 'housewife test' ... which says that anything that a housewife would spend money on with no business reason whatsoever for doing so cannot be deducted as a business expense. Do housewives go to hair salons, nail salons, buy department store makeup, etc. ? Yup they sure do.

    The second are 'ordinary and necessary expenses' that a business incurs in order to operate. Do dancers need to go to hair salons, nail salons, buy department store makeup, etc. in order to make money ? Yup they sure do.

    The generally accepted answer to this dilemma is that you can deduct 50% of the cost of these 'dual use' items.

    Where plastic surgery is concerned, the US congress has legislated that ALL plastic surgery is for personal benefit thus not deductible as a business expense. However, a feature dancer named Chesty Love challenged this in IRS tax court, and received a ruling that her 'professional sized' implants posed a hardship in her personal life, were thus ONLY of value to her business. The tax judge agreed with her. Thus girls working as dancers ( or in any capacity where 'bigger tits means bigger tips' can deduct the cost of 'professional sized' breast implants as a business expense. However, under the Chesty Love ruling, 'professional sized' means implants larger than any housewife would choose to get for purely personal reasons, which is generally accepted to mean implants larger than 1000cc ( each ) are required for a business expense tax deduction to stand.

    At this point, you are about three weeks away from the deadline for filing a tax return for your 2011 dancing income. Because last year was your first year of dancing, you will not be penalized if you did not send in estimated tax payments during 2011. However, you WILL owe all applicable taxes on 2011 income by the April 17th deadline. At a minimum that tax will be 15.3% of your total 2011 dancing income ( for social security and medicare tax a.k.a. self-employment tax ). If your total 2011 dancing income was greater than say $20,000, you will also owe federal income tax ... and if your state levees one, state income tax. Additionally, since 2012 is your second year of dancing, you no longer fall under the 'first year' exemption for estimated tax payments. Thus by the same April 17th filing deadline you will also owe an estimated tax payment to the IRS ( and your state - if your state levees an income tax ) on the money you have earned between January 1st and March 31st of 2012.

    As I recommended to a camgirl who raised similar questions ... the best things I can think of with the April 17th tax filing deadline now fast approaching are to

    A. buy a copy of TurboTax for Home and Business, and answer the questions as the program asks them, or

    B. find a local accountant with small business tax experience to prepare your taxes

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