Does anyone have experience with paying house fees via checks?




Does anyone have experience with paying house fees via checks?
Exotic dancing is like any other job.If you work in an office, you wear dress shoes and a suit.If you work in a restaraunt, you wear skid resistant shoes and a uniform.If you work in a strip club, you wear 7" stilettos and lycra g-strings.





I've never heard of this being done, at any club, anywhere.



I don't imagine it would work with the chance a check would bounce...I've only ever paid cash.
I guess if you have a check it makes it easier to write off? Not sure...




Clear records for tax write offs is why it crossed my mind. I'd never heard of it being done before and I have no idea how it would go over with managers at clubs (probably badly with some of the less reputable hole-in-the-walls), but I figured I'd see if any of you financially conscious ladies had heard of it.
Exotic dancing is like any other job.If you work in an office, you wear dress shoes and a suit.If you work in a restaraunt, you wear skid resistant shoes and a uniform.If you work in a strip club, you wear 7" stilettos and lycra g-strings.



Seems a little odd considering that clubs typically only do stuff like that if it's benefiting them (for instance, my club issues checks to US for whatever funny money we make so that they have records for taxes)...and I feel like receiving checks is a huge pain in the ass (plus, could bounce especially considering that dancer income is unreliable. Not to mention a check leaves a paper trail and therefore they would have to claim it, unlike the cash.)
Could be a city/town ordinance? Not sure what else to say. That's very odd.




Just so there's no miscommunication (I feel like there is,) I mean writing a check for house fees by choice so that there is the clear paper trail when I file taxes. I've certainly never encountered a club that asked for it!
Anyway, it's not something that I'm even seriously considering since it's so far outside the realm of "business as usual." It just struck me as an interesting thought from a bookkeeping standpoint.
Exotic dancing is like any other job.If you work in an office, you wear dress shoes and a suit.If you work in a restaraunt, you wear skid resistant shoes and a uniform.If you work in a strip club, you wear 7" stilettos and lycra g-strings.





So you're viewing it as a cost of doing business type deduction? I'd advocate calling the nightly net your earnings; it will be a wash regardless, only this way you'd have a less complex return. Further, unless you're 100% sure your club's accounting is totally up-and-up there might not be any record of this fee.




No offense, Bahuba, but I bust my ass when I'm working for every dollar I make and part of that gets eaten up by house fees. I would much prefer a slightly more complicated return than risk being shafted three times over (no money, no write off to potentially lessen how much I'll be paying in taxes, and possible issues over my bookkeeping if I ever should be audited) by not claiming the deduction. As an independent contractor who plans to stay in this industry at least another ten years, I would like to run a business that at least appears as legitimate as possible to the IRS; would you recommend for any other business to only report their net, instead of gross and business expenses? A dear friend of mine who leases space for his electronic repair business would call me insane if I suggested he not report and write off the deduction for it.
I've just been brainstorming methods of keeping my records as legit looking as possible and this was one of the sillier (at least in terms of real world application in this industry) that crossed my mind.
Exotic dancing is like any other job.If you work in an office, you wear dress shoes and a suit.If you work in a restaraunt, you wear skid resistant shoes and a uniform.If you work in a strip club, you wear 7" stilettos and lycra g-strings.





Naida, I think from a tax law standpoint, the net method is preferable. The tax code defines income as an accession to wealth over which the taxpayer has dominion. My view is you do not have dominion over the accession to wealth until you "settle up" at the end of the night.
If you want to be as legitimate as possible, make nightly deposits. That is the best practice for an income record.
HTH
Z










Agreed on using the 'net' income accounting method ... i.e. just recording the 'net' amount of nightly income you are able to walk out of the club with at the end of the night after paying house fees, tipouts etc. ... as the option which is likely to attract the least amount of IRS attention. This option also provides the lowest probability of a business expense deduction for tipouts being disallowed during an audit because, in the absence of receipts or the dancer issuing 1099's to the DJ and bouncers, the IRS may consider such tip payments as non-deductible 'voluntary' gratuity payments. As Zofia points out, making nightly bank deposits of the 'net' amount you walked out of the club with provides a pretty solid source of 3rd party documentation of 'net' income should an IRS auditor ever question it.I think from a tax law standpoint, the net method is preferable. The tax code defines income as an accession to wealth over which the taxpayer has dominion. My view is you do not have dominion over the accession to wealth until you "settle up" at the end of the night.
If you want to be as legitimate as possible, make nightly deposits. That is the best practice for an income record.
Also, under recent 1099 laws, if you don't use 'net' accounting, if your total annual amount of house fees paid to a particular club exceeds $600, as an independent contractor business you could be required by the 'letter of the law' to issue the CLUB a 1099 ! In turn, the club would be forced to account for your ( and every other dancers' ) house fee payments as additional taxable income ... which is likely to result in major drama where many 'cash oriented' clubowners are concerned.
Last edited by Melonie; 05-05-2015 at 08:25 AM.





Really? I pay at least 150-200 plus a night and I always deduct it. For 20 years.





from
(snip)The 1099 can be mysterious. Business owners guess at its rules and requirements. Tracking changes to the procedures (some as recent as last February) can be so exasperating, some entrepreneurs just give up and file nothing at all. This can be dangerous as penalties can add up quickly. But the 1099 doesn't need to be complicated. To help simplify things, here are the basics.
To whom are you required to send a Form 1099? As a general rule, you must issue a Form 1099-MISC to each person to whom you have paid at least $600 in rents, services (including parts and materials), prizes and awards, or other income payments. You don't need to issue 1099s for payments made for personal purposes. You are required to issue 1099 MISC reports only for payments you made in the course of your trade or business. You'll send this form to any individual, partnership, Limited Liability Company, Limited Partnership or Estate.
What are the penalities? The penalties for not doing so can vary from $30 to $100 per form ($1.5 million for the year), depending on how long past the deadline the company issues the form. If a business intentionally disregards the requirement to provide a correct payee statement, it is subject to a minimum penalty of $250 per statement, with no maximum.
What are the exceptions? The list is fairly lengthy, but the most common is that you don't need to send a 1099 to corporations or for payments of rent to real estate agents (typically property managers -- yet they are required to send them to the property owners). Additionally, you don't need to send 1099s to sellers of merchandise, freight, storage or similar items.(snip)
This essentially means that, under the most recent 1099 rules and requirements, dancer house fees paid to clubs which are large C corporations are exempt from 1099 reporting requirements. 'Privately' owned clubs are technically not exempt if the club is unincorporated, operates as an LLC etc., and thus technically requires the dancer to issue a 1099 for house fees paid to that club if those house fee payments are going to be claimed as a business expense tax deduction. Dancer payments to DJ's, bouncers, house moms etc. operating as unincorporated independent contractors are clearly NOT exempt from the requirement that the paying dancer issue them a 1099 ( if the full year total of payments to a particular person exceeds $600, anyhow ) if those tip payments are going to be claimed as a business expense tax deduction.
And again, if 'net' income accounting is being used, such that house fees paid to the club and tipouts paid to DJ's, bouncers etc. have already been subtracted from the amount of 'net' income the dancer leaves the club with at the end of the night, the topic of 1099 issuance ( or lack thereof ) is unlikely to arise. The reason of course is that reporting 'net' income eliminates the need to claim a line item business expense tax deduction for payment of house fees, tipouts etc. on your tax return ... which in turn reduces the likelihood that an IRS auditor will question the legitimacy of those deductions themselves ( for example, the IRS typically interprets 'tip' payments as a non-deductible voluntary gratuity payment ), or question the dancer's non-issuance of 1099 forms to the payees she is attempting to claim as a tax deduction.
Last edited by Melonie; 05-05-2015 at 09:57 AM.





^ yeah. I had to tip a dj 400 the other night and i told him I was going to start isuing him a 1099.




I suppose my next biggest concern is - if I were to file net, how would that affect my ability to make other deductions, such as for a second (work-only) makeup kit, costumes, shoes, etc?
Exotic dancing is like any other job.If you work in an office, you wear dress shoes and a suit.If you work in a restaraunt, you wear skid resistant shoes and a uniform.If you work in a strip club, you wear 7" stilettos and lycra g-strings.





No effect whatsoever. All such ( legitimate ) business expense tax deductions can still be claimed. And these sort of business expenses have zero ambiguity involved should you ever be audited ... if you have a purchase receipt you can prove the deduction.if I were to file net, how would that affect my ability to make other deductions, such as for a second (work-only) makeup kit, costumes, shoes, etc?




Thanks, Melonie! Your posts always leave me with something to consider. Guess I'll be talking to an accountant ASAP.
Exotic dancing is like any other job.If you work in an office, you wear dress shoes and a suit.If you work in a restaraunt, you wear skid resistant shoes and a uniform.If you work in a strip club, you wear 7" stilettos and lycra g-strings.





No problem ! As my link author pointed out, staying ahead of the changes in tax law / regulations is a full time job for a whole lot of people ! Admittedly, I'm not one of them. My attorney speculates that all of the recent changes involving 1099's are really being driven by a vested gov't interest to cut down on opportunities for 'under the table' untaxed earnings. But the recent changes involving 1099's aren't very 'compatible' with the typical US strip club business model with house fees and mandatory tipouts to independent contractor DJ's bouncers etc.
'Net' nightly dancing income accounting is arguably 100% legal ( based on the IRS definition of income which Zofia posted earlier ) and side-steps the potentially dicey 1099 issues where dancer payments to the club, to DJ's, to bouncers etc. are concerned.



Another thought that occurred to me: is it possible that the "house fees" go to the alderman or elsewhere (as it's a legal grey area for us to have to pay for work...the only thing that makes it legal is if we sign a contract saying it's OK.)
A while back, my club was sending money to the alderman basically as a donation to allow us to stay open and keep serving alcohol during election season. They had us write checks or money orders because it couldn't be cash (that could have come from the club, and would therefore be a bribe technically), but was meant to be a "donation" from the dancers to keep their work place open...and then we got the money back in the form of free house fees haha.
That would make sense if the cash was going elsewhere and had to be from a source other than the club itself.





^^^ while such 'payola' schemes are undoubtedly a part of many US strip clubs, they generally never involve dancers directly. One common form is for small independent strip club owners to contribute to the local 'police widow's and orphan's fund' i.e. direct payola to local cops. Another common form is for large corporate clubs to make SIZEABLE and 100% legal contributions to local politicians' campaign funds.
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