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Thread: Independent contractor paperwork / taxes

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    Default Independent contractor paperwork / taxes

    So strippers are independent contractors , I get that but I'm so confused on how to go about legally documenting that I'm self employed . What paperwork do I need and what do I need to keep track of? I'm lost as you can tell.

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    God/dess Zofia's Avatar
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    Default Re: Independent contractor paperwork / taxes

    There are a ton of threads on that issue in the DD.

    The basics:
    1. Keep track of your stripper income. Best practice is to open a separate business bank account. Deposit all your stripping money in there. Pay yourself out of that account, plus pay your ordinary and necessary business expenses.

    2. Ordinary & Necessary business expenses in our business are somewhat limited. Costumes, theatrical makeup and mileage to out of town clubs is really about it. Pole dance lessons are not deductible in your first year of stripping and usually not worth the cost anyway. Two things are important about O & N expenses. Pay them out of the business account and keep receipts documenting the business purpose of the expense. Some people, especially cam girls will deduct a room in their house as a home office if they cam there. And they'll deduct some part of the high speed/high bandwidth portion of their internet and maybe a HD camera. Cell phones, unless you have a dedicated on for work are not really deductible.

    3. First year, you don't have to file estimated tax returns, but you do need to set aside about 30% of your income for taxes. Those taxes will be due on April 15 following your first calendar year of dancing. Second year, you will have to start filing quarterly estimates and making quarterly payments. It's best to go to a small CPA firm your first time around. They will set you up to do your taxes and pay your estimates. Once you get the hang of how the system works, you can do it on your own.

    4. You verify your income by the deposits in your business checking account. That gets around the problem of filing 1099s on everybody in the club you have to tip out. The deposits, for the year or the quarter become your top line number on your Schedule C. (Profit or Loss from Business) This is the form you attach to your usual 1040 to show your stripping income and expense. On the schedule C you put in the code 711510 for occupation. (Independent writers, artists, etc. )

    Good luck and welcome to the often times rewarding world of small business ownership!

    Z
    Last edited by Zofia; 09-28-2015 at 07:58 PM.

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    Default Re: Independent contractor paperwork / taxes

    Good Info

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    Default Re: Independent contractor paperwork / taxes

    Zofia is right on. I'm a camgirl, but I'll add on from my waitressing experiences (because my boss was a CROOK and I needed my clock out receipts to make sure I wasn't double taxed on fucking tip out/cash transactions):

    Besides putting ALL of your earnings in a business account (to track income), also make sure that you record who you tip out and how much after every single shift. Get a notebook with the following columns: date, total made, tip out, house fees, (any other categories, etc.), and then GROSS earnings (which go in your bank account). If that final column matches your deposits, you're set. The better your books are, the harder it is for the IRS to get in your face.

    I also strongly recommend getting a good CPA to do your taxes. You'll have 99% of the legwork done by just handing over your bank statements and your notebook come tax season, but the CPA's name on your tax return makes you FAR less likely to be audited by the IRS. A good CPS will defend you in tax court automatically (ask first, but this is standard with a good CPA) and the IRS knows this. Good books + good CPA = less chance of worries down the line.


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    Default Re: Independent contractor paperwork / taxes

    I see that I can deduct mileage to work in a club out of town, but can I deduct hotel expenses? I wasn't making money in the club near me so I'm commuting to a different city and staying a few nights a week and have to stay in hotels. Can I deduct that? Anyone know?

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    God/dess Zofia's Avatar
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    Default Re: Independent contractor paperwork / taxes

    Quote Originally Posted by Aurora2 View Post
    I see that I can deduct mileage to work in a club out of town, but can I deduct hotel expenses? I wasn't making money in the club near me so I'm commuting to a different city and staying a few nights a week and have to stay in hotels. Can I deduct that? Anyone know?
    This is where things get tricky. The rule is very clear, you cannot deduct hotel and travel expenses in the city of your "business home." Generally, you can deduct lodging when you are out of town. Where things get murky in your case is you are characterizing it as commuting to another city. That would not be deductible then. Commuting expenses are not deductible. That's what I mean by murky. Are you really commuting? Or, are you traveling out of town as an ordinary and necessary part of your business? A business that has your "business home" still in your old city?

    IRS Tax Topic 511 https://www.irs.gov/taxtopics/tc511.html will help you work through your issue.

    HTH
    Z

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    Default Re: Independent contractor paperwork / taxes

    Do dancers pay quarterly or yearly taxes and why quarterly if so versus yearly?

    Is anyone an LLC?

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    Default Re: Independent contractor paperwork / taxes

    IMO, set up an LLC. You can do this or you can pay someone to do it. Then, get a business bank account and a separate personal account. Keep whatever you use for business expenses in the business account. Only use the business account for business expenses. (really important) If you go and buy both business things and personal items, pay for them in two separate transactions. Business card for business stuff, personal for personal stuff. Then, use a company like paychex and pay yourself what remains after your business expenses. They will take out the taxes. I think it costs around $75 a month to use them. Get receipts for all house fees and keep record of your tip outs. At the end of the year take a copy of your business bank statement, W2, house fee receipts and tip out record to a registered tax agent and have them do your taxes. ($300-$600) If you have any Set up an IRA, max out your contribution as much as you can for as long as you can. If you want further details, feel free to ask.

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    Default Re: Independent contractor paperwork / taxes

    What's IMO and I PM you--

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    Default Re: Independent contractor paperwork / taxes

    Quote Originally Posted by Jacindastar View Post
    Do dancers pay quarterly or yearly taxes and why quarterly if so versus yearly?
    After your first tax year, you are required to make quarterly estimates. It's optional the first tax year, but I would start quarterlies early rather than be facing a big tax bill.

    Is anyone an LLC?
    Some states allow a single member LLC, so it can work. I didn't do it that way for dancing. My company now is a Sub-S corporation. But, I do that so I can treat everything I take from the company over $118,000 as a dividend. The first $118,000 I treat as salary and deduct it as an expense on my 1120 S informational return. The savings of doing things that way isn't much, but I do avoid trouble with the IRS over the issue of "adequate compensation."

    HTH
    Z

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    Default Re: Independent contractor paperwork / taxes

    So easier to do quarterlies thank you so much Zofia

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