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Thread: Filled out a W9 - Now what?

  1. #1
    Featured Member Naida's Avatar
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    Default Filled out a W9 - Now what?

    This is the very first time I've ever filled out any form of tax documentation at a club. I expected things to be another "you're hired but on your own" scenario, but evidently this particular club has other plans (including waivers that their poles props not meant for real use, as if they even seemed useable to begin with!)

    What at the hell am I supposed to do tax wise now? I was under the impression that a W9 is issued when an "employer" is paying a contractor, which this club is most definitely not.
    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.

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    God/dess rickdugan's Avatar
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    Default Re: Filled out a W9 - Now what?

    Naida, a W-9 is required when they intend to file a Form 1099 with the IRS for any payments made to you during the year. At the very least, I suspect that they intend to report any payments made to you which have paper trails. For example, if someone pays for a room with a credit card and a portion of that is being paid to you by the club, then you should probably expect them to include those payments in your year-end 1099. If they are being real sticklers, it could also include any cash that is paid upfront to them and then given to you.

    I would strongly advise that you talk to the club to understand how the money flows and what exactly they intend to report using the 1099. You will need to be sure to pay taxes on whatever they intend to report and may need to make quarterly estimated tax payments in order to avoid penalties at the end of the year. Income reported on a 1099 could also affect your eligibility for health insurance subsidies, state aid programs, and anything else that has an income based element.

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    Banned Melonie's Avatar
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    Default Re: Filled out a W9 - Now what?

    (snip) Most often, Form W-9 is sent to independent contractors, consultants, and other self-employed workers. Form W-9 is also used by banks and other financial institutions to request tax information from customers.

    Filling out a W-9 is pretty straightforward. Just provide your name and Social Security Number, or the name and Employer Identification Number of your business.

    By submitting a W-9, you are certifying that the tax id number you are providing is correct and accurate. You also need to certify whether or not you are subject to backup withholding. Most taxpayers are exempt from backup withholding. (snip)

    Essentially, your club is preparing now so that they can file 1099's with the IRS next spring reporting 2015 dancer 'payments'. Or stated another way, this indicates that if you are paid more than $600 by your club during the remainder of 2015, your club WILL report the payments you received to the IRS next February. That, in turn, forces you to file a tax return which reports a matching amount of income, and forces you to pay taxes on that income.

    If you'll remember back 3 years, mandatory 1099 issuance was part of the ACA ... but was soon repealed due to a huge 'hue and cry' from small businesses. However, a provision of the recent TPP / TAA trade legislation is the reinstatement of mandatory 1099 issuance. There is a thread over in the Industry Insight forum about this. The 'gist' of the TPP / TAA 1099 mandate seems to be that the IRS penalties which could be imposed on businesses that fail to issue 1099's will be doubled or tripled compared to the original penalties under the ACA. I can only assume that your club has recently been advised of this 'resurrected' 1099 mandate, which explains the timing of W9's being sent to dancers.

    Also, this TPP / TAA 1099 mandate not only applies to your club, but also applies to you as a separate business when you make payments to other businesses. If you are required to pay tipouts to the club's DJ and Bouncers, you will need those DJ's and Bouncers to provide YOU with completed W9 forms ... and you will need to keep track of how much total money you pay out to each individual DJ and Bouncer during 2015 ... so that you can file a 1099 with the IRS reporting the total payments you have made during 2015 to those DJ's and Bouncers next February.
    Last edited by Melonie; 07-11-2015 at 07:41 AM.

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    Featured Member Naida's Avatar
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    Default Re: Filled out a W9 - Now what?

    Thanks for the info, guys, but it really didn't answer my concerns at all. I understand what W9s and the resulting 1099s are intended for; my problem is what the hell do I do about it? The club doesn't pay me squat, either themselves or on behalf of customers. In fact, since I started last week, I've only seen them pay out a dancer from a customer's tab ONCE. So far, it's the cheapest and most cash-based club I've ever worked in, so I'm iffy about whether they'd even manage to "reimburse" me $600 by the end of the year. It's really got me uncomfortable because I'm trying to establish a (as close to as possible) legitimate "paper trail" for my income so I can build good credit and minimize tax risks for my future.

    I guess I'll need to follow Rick's advice and have a sit down with one of the manager's at a slow time this week so I can get a better idea of what their intent is. I know it's always messy business to start talking taxes in clubs, but I really need to get this settled.
    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.

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    God/dess rickdugan's Avatar
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    Default Re: Filled out a W9 - Now what?

    Naida, your original post really wasn't clear about what you were trying to accomplish or the direct payment nature of the club. So now, with the additional clarity that you have provided...

    Based upon what you said, it sounds like the club is just doing it to cover their asses in the event that they do exceed reporting thresholds with any girl. I agree, based upon what you just said, that this won't really help you create an income trail. In fact, I really don't think that the club is going to be much help at all. If I had to guess, I'd say that they are hoping to have to do as little reporting and paperwork as possible.

    The only option that I can see in terms of creating a verifiable income trail is to deposit as much as possible in the bank and then to pay taxes on what you deposit, including quarterly estimated taxes. Over time, this will provide you with tax returns and bank statements that you can use to prove income. Of course, keep in mind again that income reported on tax forms will affect other things, like health insurance subsidies, but that is the cost of getting your money in the system and using it to build up your credit.

    I hope this helps a little more and good luck!

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  9. #6
    Featured Member Naida's Avatar
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    Default Re: Filled out a W9 - Now what?

    Sorry for not being clearer the first time, guys. I did, however, have a sit down and figured out what their intent is.

    Apparently, they're reporting the number of hours we work at $7.25/hr. This still confuses the hell out of me. How can they vouch for or prove we made any income without paying us themselves? Ultimately, though, I'm not going to stress it. I'll be seeing an accountant to file my real income quarterly. I'm sure I could probably get away with paying less if I just reported similar to the club's bullshit method, but I just don't see it being worth the risk. However, since I have official documentation of my hours worked and what I've paid in house fees at the club, plus my personal records of it, I'm pretty damned sure I'll be reporting my gross income (minus tip out to staff, because no one wants to be THAT girl) and writing off my house fees.
    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.

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    Default Re: Filled out a W9 - Now what?

    As Rick said, this is a CYA thing. What you're supposed to do about it is exactly what you've described, which I'll wager is more than the average person. You'll have additional clarity on Jan 31 2016 when you receive your statements from them.

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