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Thread: Next due date for taxes?

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    Default Next due date for taxes?

    Hi there! I just started dancing 4 days ago and want to be super legal about all of this. I know I have to pay quarterly taxes, but I can't figure out when those dates are? When will I need to pay taxes first? Thanks!!

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    God/dess Zofia's Avatar
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    Default Re: Next due date for taxes?

    If you expect to owe more than $1,000 in taxes for 2014 after subtracting withholding and refundable credits, and you expect your withholding and refundable credits to be less than 90% of the tax due on your 2014 return. (Filed no later than April 15, 2015) then you must file estimated taxes. However, since this is your first tax year, you can wait until 2015 to start filing estimated returns and payments. Not the best idea, but you can wait.

    You do have another option, if you have a withholding job you can increase your withholding so that you will not meet the test above. If you want to make estimated payments, the deadlines are June 15, 2014 (not applicable to you as you have just started working as an IC), September 15, 2014 and January 15, 2015.

    For more fun and more than you could want to know, IRS publications 5120 and 5121 make for fascinating reading.

    HTH
    Z

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    Banned Melonie's Avatar
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    Default Re: Next due date for taxes?

    ^^^ if you're concerned about not being hit with a huge tax bill next April 15th, since all of your dancing earnings occurred after this past June 1st, the next regularly scheduled quarterly estimated tax payment date is this coming September 15th. Following that, the next quarterly estimated tax payment date for income earned from September through December is next January 15th. When these due dates roll around, you can file and pay $1,000 or 2,000 or whatever = 25% of the total money you will have earned from now through this coming September 1st, and subsequently from Sep 1st through Jan 1st. Given that the lost interest earnings by paying estimated taxes vs leaving the money in a bank account is well under 1% these days, given that self-withholding for estimated taxes is a very good 'habit' to get into ASAP, and given the fact that life will get VERY complicated if next April 15th rolls around and you don't actually have the money sitting in a bank account to pay for actual taxes due on your total 2014 earnings PLUS estimated taxes on your January 1st through April 1st 2015 earnings, starting self-withholding and quarterly estimated tax payments immediately after you start dancing is the 'safe play'.

    I personally recommend the 'safe play', since one of the largest mistakes that new dancers and camgirls make is to 'forget' that they owe 25%+ of the money they have earned in federal and state taxes. As such, new dancers and camgirls are often 'caught' in a cash crunch situation where they have failed to set aside estimated tax money via self-withholding, where they have failed to save much if any of the money they earn, and are then 'surprised' when they are expected to come up with thousands ( or tens of thousands ) of dollars next April 15th. At that point, they may be forced to resort to IRS monthly payment plans, using their credit card to pay taxes, etc. ... which winds up costing lots of extra money in the form of interest payments, and may also increase the probability of being audited.

    However, as Zofia correctly points out, since this is the first year of 'business' operation, the IRS won't penalize you for failing to file and pay estimated taxes during that first year. However, you will still owe the same amount of money in taxes at the end of the tax year. Thus if you are totally comfortable setting aside 25% of your earnings and coming up with $4,000 or $8,000 or more in one lump sum next April, this is all that you are legally required to do for your first year of operation. In past years, when banks were paying 5%+ interest on deposited money, going this route would actually save you significant money. However, this year, with banks paying only a fraction of a percent in interest, the savings are negligible.

    PS since you have just started dancing, it is highly recommended that you open a separate new account at the same bank where you have your 'personal' bank account. Deposit your dancing earnings into this separate new account, and transfer money out ( less the 25% withholding ) to your existing 'personal' account as a weekly 'paycheck'. Not only does this automatically accumulate money in the new account ( which you will use later to make the quarterly estimated tax payments as well as to pay for legitimate business expenses like costumes, shoes etc. ), but it also gives the IRS the impression that your business operations are 'professional' thus more credible.
    Last edited by Melonie; 06-08-2014 at 03:01 PM.

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    Default Re: Next due date for taxes?

    Thank you so much ladies. Thats exactly what I needed to know!

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    Default Re: Next due date for taxes?

    ^^ Ditto what these ladies said--they saved my butt when I was getting into camming as a full time, self-employment type gig at the start of the year. I cam, so I can't say much for stripping work itself, but I can tell you my strategy for taxes. I'm on my first year, so I'm not required to pay quarterlies this year and didn't want to (just too darned complicated to figure out for me with everything else when I was starting up). I ended up getting a business license (I don't know if you need one for stripping, ask these lovely ladies) and opened a business savings/checking account with my current bank. I deposit any and all of my earnings straight into that account and then send myself 75% to my personal checking account with the notation 'paycheck to employee' or some such thing. The other 25% I leave in the account until the 1st when $150 is transferred automatically to checking (which waivers my account fees, yay!) and then send the extra over same day to collect a tiny amount of interest. It's like I've already paid my taxes that way.

    I also recommend getting some sort of book keeping system in place, even if it's just an excel document or notebook paper in a binder. I keep screen shots of my earnings pages on my camming sites as back up, then write down each days 'earnings' by site (I work two--you could specify the club), and keep a separate page of any deductions I might claim + the receipts for them (stripping seems to have more deduction options, but again ask these ladies). The IRS notoriously likes to audit adult workers like strippers because it's a cash heavy business, so do your best to have professional looking books and pay taxes on every dollar you earn.


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    Banned Melonie's Avatar
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    Default Re: Next due date for taxes?

    In point of fact there aren't that many actual differences between taxes for IC dancers and taxes for IC camgirls. Both must follow the same rules and deadlines regarding payment of quarterly estimated taxes plus annual tax return filing. Both have business expense tax deductions available, although the specific deductions may be a bit different. Both depend on 'self-generated' business records, and self-managed bank statements, to establish 'credibility' - although webcam hosts may provide a more complete 3rd party paper trail via 1099's, while dancers self-generated statements of cash earnings often have little 3rd party paper trail available thus making 'credibility' even more important.

    Both are Adult businesses, which have been defined as 'high risk' by the FDIC. Both are likely to attract a higher than average amount of IRS attention for this reason alone.
    Last edited by Melonie; 07-12-2014 at 11:11 PM.

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