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Thread: What is deductible?

  1. #26
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    Default Re: What is deductible?

    Eric- I've saved every receipt, earnings, and expenses over the years. They are filed away in categories. If anything should happen I'm able to go back and have everything available for them.
    Admire her if you will, but imitate her never, said the parents to the enamored children.

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  3. #27
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    Default Re: What is deductible?

    I won't attempt to put words in Eric's mouth, but from my own audit experiences there sometimes comes a point where trying to continue an 'adversarial' position versus an IRS auditor ... even if you think you have 100% documentation to support your position ... starts to involve more potential negatives than it' 'worth'. It's one thing for 'Chesty Love' to choose to go to tax court over a potential $50k in tax deductions relating to her professional sized breast implants. It's another thing altogether for somebody to choose to go to tax court over a potential $5k in business travel expenses.

    Even if your 100% documentation IS upheld in tax court, for a fact just getting into tax court in the first place costs money ( in additional CPA & attorney fees, travel costs etc.) ... in some cases more money than the disputed deduction is actually worth in tax savings. Additionally, deciding to go to tax court can also result in the IRS freezing funds in your bank accounts until your 'case' is decided, which can wreak havoc on your personal finances. And while this can't be proven, 'beating' the IRS in tax court this year ... by 'sheer coincidence' ... seems to correspond to a high probability of repeat audits in future years.

    And while it also can't be proven, deciding to go to tax court opens up your tax return and personal / business financial records to a near 'infinite' degree of IRS scrutiny ... which can easily create NEW problems ( i.e. self-employed persons not being able to conclusively prove that they DIDN'T earn more 'cash' income than they reported on their tax return ). Accepting a settlement offer essentially 'closes the case' in regard to the IRS questioning reported income or any other info on the person's tax return.

    Generally speaking, if the IRS offers a 'settlement' agreement, and the actual 'cost' in additional taxes of accepting the settlement is reasonable, ( i.e. paying an extra $500 settlement instead of an extra $5000 if you go to tax court and lose plus an additional $1000 in CPA, Attorney and travel regardless of whether you win or lose ), the 'smart' response is .... ' where do I sign'.
    Last edited by Melonie; 03-21-2014 at 03:40 AM.

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    Default Re: What is deductible?

    Melonie hit the bullseye. Let me give a brief recap of what happened. For my 2011 Return I had all sorts of trouble because somebody borrowed my S.S. # and filed a return using my name. My refund was delayed for almost a year until I proved " I was ME " lol. According to my CPA this increased attention to my past returns and the IRS tried to disallow some deductions for my 2010 return , mostly car expenses. Historically I've deducted 70 to 80 % of my car expenses because of extensive business travel and use in my work.
    In this type of situation you are guilty until proven innocent. The burden was on me to document my expenses ( receipts ) and show it was ordinary and necessary for my work and NOT just everyday commuting ( my diary documented my daily schedules and itinerary.) This was all done by mail until the IRS said: " we'll allow over 90% of the deduction.Please pay us 'X'. "The amount was relatively small and it just seemed more sensible to pay it than to fight it out. It was a win-win for me , the auditor and the IRS. I bought my peace ; the auditor made her quota and the IRS collected a few bucks.

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    Default Re: What is deductible?

    Btw , the expense journal I use was prepared- "authored" ( ? ) by a CPA who used to work for the IRS. I got it for $17 at Staples. The first section spells out what is deductible for business and the rest are daily , weekly and monthly pages to enter various deductible expenses. I've been using one for years.

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    Default Re: What is deductible?

    In this type of situation you are guilty until proven innocent.
    It's not just that situation either ... unfortunately !!! Where self-employed persons are concerned, where conclusive 3rd party corroborating documentation is scarce, and where a significant amount of financial documents are 'self-generated', indeed any 'burden of proof' falls on the self-employed person and not the IRS.

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    Default Re: What is deductible?

    While we're on this topic, please keep in mind that the 'judgement' of a particular accountant carries no weight whatsoever with the IRS if and when you are audited. Translation - if you use an accountant who allows you to claim business travel expenses for 'commuting' to the same club night after night, if you use an accountant who allows you to write off meals eaten at the club, etc., that accountant is NOT going to be held responsible for paying additional taxes ( and interest charges ) if / when an IRS auditor disallows those deductions ... YOU are ! Just sayin' !

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    Default Re: What is deductible?

    Quote Originally Posted by Melonie View Post
    ... that accountant is NOT going to be held responsible for paying additional taxes ( and interest charges ) if / when an IRS auditor disallows those deductions ... YOU are ! Just sayin' !
    Melonie makes a very good point. The taxpayer is responsible, not the accountant. There is no relied on advice of an accountant defense. Further more, the accountant who allows the taxpayer to take those deductions for commuting expenses, meals eaten at the club etc., is doing the taxpayer no favors.

    HTH
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    Default Re: What is deductible?

    All true but accountants are potentially liable for malpractice if they deviated from commonly accepted accounting and tax preparation methods.

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    Default Re: What is deductible?

    ^^^ true but this results in a similar scenario as attempting to dispute a disallowed deduction in tax court. In order for anything to happen, the girl must first pony up legal fees out of her own pocket ... with no guarantees that spending money on legal fees will actually result in a 'payoff'.

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    Default Re: What is deductible?

    Out of curiosity, what if you aren't allowed (by the club) to bring in any outside food during an 8+ hr shift without facing $1000+ fines? I've never claimed any of that as a 50% business meal deduction, but it seems like that could be considered a reasonable expense?

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    Default Re: What is deductible?

    Quote Originally Posted by Fionaver View Post
    Out of curiosity, what if you aren't allowed (by the club) to bring in any outside food during an 8+ hr shift without facing $1000+ fines? I've never claimed any of that as a 50% business meal deduction, but it seems like that could be considered a reasonable expense?
    Hmmm. If you have to eat at the club AND you have to buy the food prepared and served at the club , some portion might , repeat MIGHT be deductible. Check with your accountant.

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    Default Re: What is deductible?

    Quote Originally Posted by Melonie View Post
    ^^^ true but this results in a similar scenario as attempting to dispute a disallowed deduction in tax court. In order for anything to happen, the girl must first pony up legal fees out of her own pocket ... with no guarantees that spending money on legal fees will actually result in a 'payoff'.
    Not necessarily. Like Med- Mal and legal mal cases , some attorneys will handle them on a contingent fee basis.

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    Default Re: What is deductible?

    As a Camgirl, are you able to deduct half of your Internet bill or some of your rent as a business space?
    Quote Originally Posted by Procrasturbator
    Can we use "cramming" as the official new word for when you procrastinate too long and try to cram a whole pay period's worth of work into the last couple days?
    Quote Originally Posted by TheTiffanyTracy
    Like, I'm happy having my sexy pr0n everywhere, but I don't really want a bunch of clips of me popping balloons in diapers all over the place XD

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    Default Re: What is deductible?

    ^^^ the answer is yes, but ! ... with the 'but' being that very strict rules apply and that the probability of being audited will increase.

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    Default Re: What is deductible?

    So is the general consensus that things like gowns, nail treatments/waving and botox are non-deductible?

    I just spent around $550 on 2 gowns, 4 matching g-strings and new stripper shoes and I would love to be able to use it as deductible.. I'm required to wear a gown and a matching v-back g-string at my clubs, as well as the stripper shoes. I'm also probably going to be spending around $1000 on botox/dermal fillers next week and would love to deduct that as well! I have a friend who used her boob job as a deductible when doing her taxes and got away with it. And the clubs here are a lot more strict than the ones in LA about having nails/waxing done and whatnot so I would also love to deduct that as well!

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    Default Re: What is deductible?

    Quote Originally Posted by audrey_k View Post
    So is the general consensus that things like gowns, nail treatments/waving and botox are non-deductible?
    I deduct gowns as they are akin to a costume or uniform that cannot be used in any other capacity. I don't deduct the lingerie I have worn on lingerie nights because I don't believe it passes the housewife test.

    I don't deduct my botox treatments for the same reason.

    ETA: how do taxes work for an American earning in the UK? You're paying taxes in both for your earnings in the UK?
    "Don't piss off a motivated stripper."


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    Default Re: What is deductible?

    My gf got audited in the scores audit in the 90's and the auditer would not allow for gowns. I have deducted under uniforms but I do a very small amount. Keep in mind just because someone gets away with a deduction doesn't make it legal. Some people deduct things that aren't allowed for years and just because the I.R.S. doesn't catch it doesn't make it a legal deduction. I've been in this business for 20 years and my accountant is excellent so I'm pretty versed as to what is an allowable deduction. It would be nice if we could deduct things like tanning, extensions, and stuff because honestly I wouldn't do these things if I wasn't an entertainer but they are not allowable. Also eating at the club. No. Regular vanilla job people can't right off lunch why would you think we can? Also if you stay at a place with a kitchen , you are not able to right off meals...

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    Default Re: What is deductible?

    ETA: how do taxes work for an American earning in the UK? You're paying taxes in both for your earnings in the UK?
    If you are a UK 'resident' with an officially documented UK based income, you must first file and pay business taxes to the UK HM revenue - see . Note this is absolutely the case for an American girl living in the UK and working in a UK strip club, but is NOT the case for an American girl living in the UK but working for a non-UK based webcam host ( as long as the webcam host checks / payments do NOT get initially deposited in a UK bank account ) .

    In addition, if your income is UK based, you must STILL file a 'non-resident' US income tax return ... on which you will receive 'credit' for taxes paid to the UK thus may or may not owe additional taxes to the IRS. There is also a US 'foreign income exclusion' that virtually guarantees that any US citizen residing full time in a foreign country won't have to pay US taxes ( well, as long as their income is less than $106,000 per year ) ... but this also requires that the person spend no more than 30 days per calendar year within US borders.


    It would be nice if we could deduct things like tanning, extensions, and stuff because honestly I wouldn't do these things if I wasn't an entertainer but they are not allowable
    For better or worse, IRS code essentially sets up two conflicting sets of regulations in this regard. On the one hand, the IRS can disallow such deductions on the basis that 'housewives' spend money on dresses, extensions, tanning, gym etc. with absolutely no business reason to do so. On the other hand, 'ordinary and necessary' business expenses are supposed to be legitimately deductible ...

    So the reality is that the 'allowability' of such deductions comes down to the judgement of the individual IRS auditor. Obviously, not claiming such deductions eliminates potential controversy that can increase the probability of an audit. On the flip side, not claiming such deductions guarantees you'll pay a higher tax bill.
    Last edited by Melonie; 04-06-2014 at 11:00 AM. Reason: of

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    Default Re: What is deductible?

    ^Yeah. Since my gf got audited for the gown thing and her auditor didn't allow it I won't right off frivolous things like hair, tanning etc. Why take the chance? Especially someone like me who they can go back years on and who keeps horrible records, receipts because I'm so messy/ unorganized...

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    Default Re: What is deductible?

    Especially someone like me who they can go back years on and who keeps horrible records, receipts because I'm so messy/ unorganized
    yup ... the degree of 'professionalism' a dancer or camgirl devotes to her business .... i.e. a registered LLC or S-Corp, versus 'sole proprietor' ... a separate business bank account, versus co-mingling of business and personal funds in a personal bank account ... business book-keeping with nightly income and expense entries, versus year end 1099's + guesswork ... filing and paying quarterly estimated taxes, versus ignoring quarterly payments and eventually requesting a monthly payment agreement when you finally file a year end tax return but can't pay the tax money owed by the april 15th due date ... goes a long way toward building 'credibility' if and when you are audited.

    If your business operations resemble the latter, raising the probability of being audited by taking 'questionable' deductions is something that seriously needs to be considered. For example, if your auditor were to conclude that your lifestyle is more 'expensive' than your officially reported income would appear to make possible, and as a result the auditor were to 'estimate' that you actually earned $20,000 per year MORE than you officially reported to the IRS for the last 3 years, and as a result the auditor claims you owe the IRS $20,000 in additional taxes on previously unreported 'estimated' income, can you prove that you did NOT actually earn that extra money the auditor 'estimates' you did earn ?

    As Michele alludes to, attempting to take 'questionable' tax deductions that might save hundreds of dollars, but taking those deductions at the risk of having an IRS auditor raise questions that may wind up costing thousands of dollars, is a very questionable 'strategy'.
    Last edited by Melonie; 04-07-2014 at 04:30 AM.

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    Default Re: What is deductible?

    Melonie has laid out the "housewife test" rather well. If a housewife can't deduct it then neither can a dancer so things like tanning, gym memberships , pilates classes , hair and make-up are not deductible. Gowns and shoes ? Hmmm. This is where it gets tricky. If you are talking about "Pleasers" and "Anthony's " that you have to wear for work and can only wear for work they are like a uniform and are arguably deductible. A gown that you would ONLY wear in a stripclub ought to be deductible as well.

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    Default Re: What is deductible?

    ^That's what it is, the heels are Pleasers are the gowns are from Kamala-- the gowns are definitely not something you would wear out, whereas some of the shorter dresses I'm looking into buying are so I'm assuming they would not be deducible. But a gown with rhinestones and no stomach (just bikini top attached to a long skirt) would surely be considered a costume?

    Normally I don't even bother with stuff like this when it comes to buying lingerie because I will wear that lingerie for my bfs/during the day if its laundry day/etc so I don't feel like I'm throwing money away because it's useable all the time, but something like this is PURELY a work purchase and will never be worn/used in any of situation and was VERY expensive so I would like to deduct it!

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  25. #48
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    Default Re: What is deductible?

    something like this is PURELY a work purchase and will never be worn/used in any of situation and was VERY expensive so I would like to deduct it!
    Agreed that such deductions are worth taking. I always deducted stripper costumes that clearly weren't 'street legal', 6" heel shoes that are totally impractical for any 'everyday' activity etc.

    However, that didn't stop the IRS from auditing me and questioning these deductions, though. And I was always able to convince the auditor that such deductions should be allowed to stand as 'ordinary and necessary' business expenses. But that didn't stop the IRS auditor from also 'poking around' in my past 3 years worth of tax returns and asking other questions. Fortunately I could satisfy the IRS auditor pretty quickly because I had formed an S-Corp, because I had routed all of my dancing / camming / modeling / video earnings through a dedicated business bank account, because I had kept detailed 'books' of my business activities, because I had always stayed on top of quarterly and annual tax filings, etc. Absent those 'professional' business records, and absent the 'professional' way my business was conducted, I could have been at significant risk facing 'credibility' problems ... i.e. the IRS auditor dismissing my self-generated business 'books' as a self-serving work of fiction, and arriving at his own 'estimates' as to how much higher my total earnings might have been, etc.

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    Default Re: What is deductible?

    Melonie, I have to thank you for giving me a metaphorical kick up the butt because I run 4 online businesses as a sole trader (UK) and my record keeping is abysmal. I lose receipts instead of filing them as soon as I get them, and don't bother keeping my spreadsheet up to date for months at a time.

    Adding stripping to the mix soon.

    There's no way I would survive an audit from HMRC.

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    Default Re: What is deductible?

    ^^^ when an audit happens, the time / money you thought you were saving by short-changing your business record keeping may wind up costing you ten times more in additional taxes that you can't prove you don't really owe !!! Also, it absolutely sucks, but where the tax man is concerned, you are assumed guilty until proven innocent !!!

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