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Thread: Sugar baby proof of income

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    Default Sugar baby proof of income

    Hi Everyone! If this question has already been answered please reply with the link, I read a few similar threads but could not find the answer for my situation. I am a sugar baby and I would like to get my own place. In the past, I was basically using the money for my expenses and school but now I am able to save the money. I get everything in cash and I am so paranoid to make large deposits on my bank account because I can't really prove where I got it from. I was thinking of getting a business license to be able to have an explanation when the landlord starts asking questions. I've read so many articles and I am still confused on how I can legally obtain proof of income for the landlords. I tried getting my friend to cosign but I think she needs to see that I've saved up and I feel weird pulling out a bunch of cash like I am running a cartel or something lol. Also I read that the banks report anything above $10,000 which makes it more difficult. Please if anyone has any ideas help.

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    Default Re: Sugar baby proof of income

    Good call on not depositing in the bank, they do ask annoying questions if you have no check stubs or other documentation of income.

    I would say you have a home based business like Scentsy or a house cleaning service & you get paid directly in cash. You can make up receipt books or print out spreadsheets with info breaking down your earnings from the home based business.

    As for landlords & leases, my suggestion is to go through an independent landlord directly & don't deal with property managers. They are out there. BTW is your credit score any good? This might help a lot.

    edit to add- if anyone asks why you want an indie landlord, say you absolutely need your dog as it is a therapy dog & apartments won't allow the dog/ the pet fee is too high per month. (Whether you have a dog doesn't matter, you can figure out another answer if this works to make the landlord agreeable.) BTW my bank records were enough for a place but I had a co-signer.

    Many landlords want to get paid & are happy to rent to someone who can pay rent on time & provide a clean record. Be optimistic.
    Last edited by SnuffleUffleGrass; 04-20-2016 at 10:52 AM.

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by SnuffleUffleGrass View Post
    Good call on not depositing in the bank, they do ask annoying questions if you have no check stubs or other documentation of income.

    I would say you have a home based business like Scentsy or a house cleaning service & you get paid directly in cash. You can make up receipt books or print out spreadsheets with info breaking down your earnings from the home based business.

    As for landlords & leases, my suggestion is to go through an independent landlord directly & don't deal with property managers. They are out there. BTW is your credit score any good? This might help a lot.

    edit to add- if anyone asks why you want an indie landlord, say you absolutely need your dog as it is a therapy dog & apartments won't allow the dog/ the pet fee is too high per month. (Whether you have a dog doesn't matter, you can figure out another answer if this works to make the landlord agreeable.) BTW my bank records were enough for a place but I had a co-signer.

    Many landlords want to get paid & are happy to rent to someone who can pay rent on time & provide a clean record. Be optimistic.
    My credit is average. I am repairing it but I think it will take a while for it to show. You said not to deposit it at all at the bank? Just produce receipts? And should I actually get a legit business license to back me up? I want to get one regardless but it will take a while for me to start earning money through the business. I know as soon as I start creating a paper trail with bank deposits I can't fake receipts especially if the IRS starts asking me questions about my fictional customers. Thank you for your reply.

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    Default Re: Sugar baby proof of income

    Are you getting more than $10,000 at a time from your sugar daddy? If not, don't worry and don't file a form 8300. Just put the money in the bank. And, there you have your proof of income. Of course, you will have to pay taxes on your income.

    HTH
    Z

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by Zofia View Post
    Are you getting more than $10,000 at a time from your sugar daddy? If not, don't worry and don't file a form 8300. Just put the money in the bank. And, there you have your proof of income. Of course, you will have to pay taxes on your income.

    HTH
    Z
    No I am not lol, I wish. Ok. What happens if I accumulate $10k in my account over a few months? And when I file, do I say it was a gift? Or should I file as self employment? Do you know if the SD has to put my name in his taxes when paying gift taxes?

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    Default Re: Sugar baby proof of income

    Many counties have business license registration for home based businesses/ self-employed individuals.

    As far as I know the IRS doesn't start scrutinizing people until they hit they over $100K a year mark for income. It doesn't sound like you are going to be reporting that kind of money on paper so don't worry.

    Just don't show up the bank shoving stacks of thousands into the account. Keep a secret safe & "smurf" the amounts over time.

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by SnuffleUffleGrass View Post
    Many counties have business license registration for home based businesses/ self-employed individuals.

    As far as I know the IRS doesn't start scrutinizing people until they hit they over $100K a year mark for income. It doesn't sound like you are going to be reporting that kind of money on paper so don't worry.

    Just don't show up the bank shoving stacks of thousands into the account. Keep a secret safe & "smurf" the amounts over time.

    Ok thank you

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    Default Re: Sugar baby proof of income

    I suggest talking to an accountant or tax lawyer.

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by Satynin View Post
    My credit is average. I am repairing it but I think it will take a while for it to show. You said not to deposit it at all at the bank? Just produce receipts? And should I actually get a legit business license to back me up? I want to get one regardless but it will take a while for me to start earning money through the business. I know as soon as I start creating a paper trail with bank deposits I can't fake receipts especially if the IRS starts asking me questions about my fictional customers. Thank you for your reply.
    The IRS doesn't care how you earn your income, just that you report it and pay appropriate taxes on it.

    The people who DO care about where your money comes from are lenders and anyone else who might become a creditor, like a landlord. Just have a good story about what you do, along with appropriate tax returns and bank statements for proof of income and you should be fine for the most part. Where it might get tricky is if you apply for a mortgage, or try to rent in a higher end place, and someone scrutinizes your tax returns. They might find it a little odd if you do not have business expenses on your Schedule C consistent with whatever cover story you are using, so if I were you I would pick something like life coach, personal trainer, fortune teller (lol), tutor or something else that is a direct service requiring few supplies.

    When someone said don't deposit it all in the bank, I think she meant don't make single deposits over $10k. But based upon what you already said, it doesn't sound like a big risk for you yet anyway. It is important to get as much in the bank as possible because the only verifiable income that you will have for landlords and lenders is whatever deposits they can see go into a bank account and what is reported on your tax forms (which should more or less match up).

    As to your question about how to report the income, it is not a gift. You are being paid for services rendered, whatever those are. Ideally you report it as business income from your "Life Coach" or other business. You do not need to be licensed or registered in any formal way in order to report income as business income to the IRS.

    I agree with eagle that you should talk to an accountant. For starters, once you start depositing income, you will need to start making quarterly estimated tax payments, so it might be a good time to get a jump on this stuff now.

    Good luck!

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    Default Re: Sugar baby proof of income

    Just deposit " normal " amounts weekly ( $500-$1000 ) like any other self employed person would. Showing income as a dancer or SB is easy. You don't necessarily have to write " sugar baby " on the forms either ! List it as " actress " or entertainer or online marketing or whatever your go to cover is.
    A couple months of bank statements is all you need to prove income.

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    Default Re: Sugar baby proof of income

    I would follow rickdugan's advice. I'd add that your SD will definitely not put your name anywhere on his taxes, whether as gift income or as an "independent contractor" whom he would hire. File a Schedule C and make sure that whatever "profession" you pick, it will look legitimate to landlords and the like, and be difficult for them to verify. Nanny/childcare is also a good one.

    If you don't like bringing stacks of cash to the counter in the bank, just deposit in the ATM. Make sure to have varying amounts though, well under $10,000—banks will sometimes throw up an internal red flag when they see you consistently making deposits of just under $10,000.

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by tigershoes View Post
    I would follow rickdugan's advice. I'd add that your SD will definitely not put your name anywhere on his taxes, whether as gift income or as an "independent contractor" whom he would hire. File a Schedule C and make sure that whatever "profession" you pick, it will look legitimate to landlords and the like, and be difficult for them to verify. Nanny/childcare is also a good one.

    If you don't like bringing stacks of cash to the counter in the bank, just deposit in the ATM. Make sure to have varying amounts though, well under $10,000—banks will sometimes throw up an internal red flag when they see you consistently making deposits of just under $10,000.
    Ok I will. So far I checked my statements and everything looks good I only deposited checks from my old jobs on there and small cash deposits once in a while but this month I made some deposits of cash but they are still the same amount as the work checks. I wasn't really thinking but I will stop and organize everything. Do you think deposits of $200 and 250ish 3 times will send a red flag?

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by rickdugan View Post
    The IRS doesn't care how you earn your income, just that you report it and pay appropriate taxes on it.

    The people who DO care about where your money comes from are lenders and anyone else who might become a creditor, like a landlord. Just have a good story about what you do, along with appropriate tax returns and bank statements for proof of income and you should be fine for the most part. Where it might get tricky is if you apply for a mortgage, or try to rent in a higher end place, and someone scrutinizes your tax returns. They might find it a little odd if you do not have business expenses on your Schedule C consistent with whatever cover story you are using, so if I were you I would pick something like life coach, personal trainer, fortune teller (lol), tutor or something else that is a direct service requiring few supplies.

    When someone said don't deposit it all in the bank, I think she meant don't make single deposits over $10k. But based upon what you already said, it doesn't sound like a big risk for you yet anyway. It is important to get as much in the bank as possible because the only verifiable income that you will have for landlords and lenders is whatever deposits they can see go into a bank account and what is reported on your tax forms (which should more or less match up).

    As to your question about how to report the income, it is not a gift. You are being paid for services rendered, whatever those are. Ideally you report it as business income from your "Life Coach" or other business. You do not need to be licensed or registered in any formal way in order to report income as business income to the IRS.

    I agree with eagle that you should talk to an accountant. For starters, once you start depositing income, you will need to start making quarterly estimated tax payments, so it might be a good time to get a jump on this stuff now.

    Good luck!
    Thanks so much.

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    Default Re: Sugar baby proof of income

    Start depositing it at the ATM and start paying taxes on it. You can put consultant as your
    Occupation on your tAx forms.

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by arielbriel View Post
    Start depositing it at the ATM and start paying taxes on it. You can put consultant as your
    Occupation on your tAx forms.
    Ok I will. Thanks

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by Satynin View Post
    Ok I will. So far I checked my statements and everything looks good I only deposited checks from my old jobs on there and small cash deposits once in a while but this month I made some deposits of cash but they are still the same amount as the work checks. I wasn't really thinking but I will stop and organize everything. Do you think deposits of $200 and 250ish 3 times will send a red flag?
    I can't say for sure. Probably not though, the IRS have way bigger fish to fry. And those aren't suspiciously large sums of cash that would make them or the bank think you must be doing something illegal. $250 is side income money, $8000 repeatedly is drug dealer or money laundering money.

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    Default Re: Sugar baby proof of income

    I usually put in a g at a time like a couple times a week. I've never had any issues.

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by Satynin View Post
    Do you think deposits of $200 and 250ish 3 times will send a red flag?
    No. The banks have to file suspicious activity reports for any single deposit over $10k, along with related transactions adding up to 10k (usually in the same day or week). You aren't going to make anyone blink by putting in 200 to 250 at a pop. In fact, if you're sitting on 6 or 700, you might as well deposit it in one shot.

    Satynin, IMHO you are worrying way too much about this. Just deposit your money as you receive it and you will be fine.

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    Default Re: Sugar baby proof of income

    *I have an odd feeling OP knows someone who has been audited.*

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by Satynin View Post
    No I am not lol, I wish. Ok. What happens if I accumulate $10k in my account over a few months?
    The IRS does not require you to report when your bank account gets over a certain dollar amount. If that was the case, I'd be filing reports twice a month just on my payroll account. All they care about is money laundering, not accumulation. Remember, the federal tax is on income, not assets.

    And when I file, do I say it was a gift? Or should I file as self employment?
    Well, if it was a gift, then you don't have to file anything. There is no tax to the recipient of a gift. Also, if your SD is paying you less than $14,000 in a calendar year of what is known as present interests (cash comes to mind but it could be cars, diamonds, clothes) no gift tax return is required. If your SD is paying more than $14,000 in any calendar year, then he must file a gift tax return. He may still not owe any taxes as it just counts against his lifetime unified gift and estate tax credit. Which currently is $5.43 million. Of course, if SD has a spouse, he may not want her to know how much he is paying you. In that case, he better keep the payments under $14,000 for a year. Also, if the SD gives you something that is known as a future interest, then no matter how small, a gift tax return must be filed. Of course, if the money is really a gift, then it can't be counted as income for any purpose. It's just an asset. An asset that can be spent, saved, invested, or yes even squandered. But, it's not income.

    Do you know if the SD has to put my name in his taxes when paying gift taxes?
    Yes, if he has to file a gift tax return, the name of the donee (that's you) and your relationship to the donor (the SD) has to be disclosed. But, the good news is neither your SSN or EIN has to be disclosed, or any other identifying information. This is not to say that the IRS, or a jealous spouse couldn't figure out who you are. They can. It's just not super simple from looking at the gift tax return.

    HTH
    Z

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by SnuffleUffleGrass View Post
    *I have an odd feeling OP knows someone who has been audited.*
    Lmao noooooooooooooo. My life is not that exciting. I tend to over think things that's why this bank and IRS thing has been on my mind and I like planning for the future. But yes like the person said above I need to relax.

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    Default Re: Sugar baby proof of income

    Quote Originally Posted by rickdugan View Post
    No. The banks have to file suspicious activity reports for any single deposit over $10k, along with related transactions adding up to 10k (usually in the same day or week). You aren't going to make anyone blink by putting in 200 to 250 at a pop. In fact, if you're sitting on 6 or 700, you might as well deposit it in one shot.

    Satynin, IMHO you are worrying way too much about this. Just deposit your money as you receive it and you will be fine.
    Yes I am going to go study and find things to do to keep my brain occupied. You guys are so awesome!

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