Results 1 to 15 of 15

Thread: filing taxes early next year

  1. #1
    Veteran Member anklefrog's Avatar
    Joined
    Aug 2002
    Posts
    247
    Thanks
    0
    Thanked 39 Times in 4 Posts

    Default filing taxes early next year

    Is this something I need to do? I've worked for 3 clubs and I know that none of them 1099. I started dancing in late January 2003, so I've never dealt with this before. I worked in another type of club environment getting paid minimum wage ($6.75) plus cash tips for January 2003. I don't save my receipts b/c I didn't plan on doing taxes. The only debt I have is my car, I owe around $12,000, and $500 worth of credit card debt. Of course I have rent ($995) and other life bills. Can the IRS really question how I afford my life? It's not extravagent. I drive a Saturn and the rent is normal for Southern Calif. I figure that I can always say "Mommy and Daddy" pay for the rent and car. How would the IRS not know I have some sort of trust fund somewhere that pays my bills. I deposit cash into my checking account, but I also try to spend my cash when I buy gas, shop, etc.
    It's better to be looked over, than overlooked.

  2. #2
    Veteran Member anklefrog's Avatar
    Joined
    Aug 2002
    Posts
    247
    Thanks
    0
    Thanked 39 Times in 4 Posts

    Default Re: filing taxes early next year

    I just read the thread called declaring taxes. Melonie, I read what you wrote regarding CA law that requires clubs to report what a dancer earns (did I get that right?) From what I know, only a few clubs around here 1099, and the 3 clubs I have worked at DO NOT 1099, I've asked the management. Would it be wise to go to a temp. staffing agency and get temp jobs?
    That way I could withhold as much money as possible.
    I have no interest in doing anything illegal, but on the same token, I also don't want to owe a few grand next year. Melonie, you seem to be quite knowledgeable on this, so I'll take whatever advcie you have to heart. maybe I should start saving receipts. This includes my hair, makeup, work outfits, shoes, etc............correct?
    It's better to be looked over, than overlooked.

  3. #3
    God/dess Emily's Avatar
    Joined
    Feb 2003
    Location
    Las Vegas
    Posts
    11,302
    Thanks
    4
    Thanked 143 Times in 72 Posts

    Default Re: filing taxes early next year

    I think you should talk to a CPA. Not only will they give you tax advice (like you won't be able to deduct hair expenses because you don't use that JUST for work), but he/she will also help you file. This isn't a job for turbotax!

  4. #4
    Pamela
    Guest

    Default Re: filing taxes early next year

    I highly agree with Emily,
    you need to see a CPA for advise. I know of 2 dancers who got screwed major on Turbotax. I do not like the system. Some people can't follow through with it properly.
    Now they are getting letters from the IRS. I never would do my taxes myself as a dancer.
    An accountant is your best friend as a dancer.....However, pick one who has experience with the adult entertainment biz.
    Just my 2 cents, from being screwed myself with out an accountant.
    Pamela

  5. #5
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: filing taxes early next year

    I'll be the first to admit that I'm no expert on this subject. In particular I have no real idea what's going on in regard to actual enforcement of the California Employee Stripper law. However, by the wording of that law, all California clubs are supposedly obligated to report dancers' 2003 incomes via W2 or 1099 (with statutory employee box checked) by the end of January 2004.

    The kicker in this whole deal is that by law you are supposed to report your own 2003 income by April 15th 2004, by which time you will positively know whether or not the clubs that say they do not send out 1099's actually do or don't send out 1099s in January 2004 to comply with the new California law. But by law you are also supposed to be sending in estimated tax payments quarterly to the IRS and state tax dept. The estimated tax payment for Jan-Mar 2003 was due last April 15th, the second payment was due June 15th, and another one will be due Sept 15th. I'm assuming that you haven't made estimated tax payments for your 2003 income last April or June.

    The risk here is that if the club(s) do in fact send you a 1099 in January 2004, you will be caught red handed for non-payment of estimated taxes by the IRS computers. This will probably lead to further investigation by IRS computers for any and all bank accounts, trust funds, loans, vehicle or property titles etc. which bear your social security number. At this point, the IRS computers will prepare a report for a human agent which will probably include things like the total amount of income the clubs reported on 1099's, the total amount of income you received in bank account interest, trust fund interest etc., the total amount of money you spent on car loan payments, credit card payments, utility bills etc., and the typical amount of money an average person spends in your particular city for necessities such as rent and food. If the money you are paying out exceeds the money you reported as coming in, you'll probably draw further attention from the IRS.

    I agree that a CPA would probably be extremely helpful in clueing you in as to the actual status of the California Dancer Reporting law and all of the consequences that might stem from it actually being enforced next January.

    I have been avoiding working in any California clubs myself until the issue of all California dancers being considered "employees" is resolved, since this could have far reaching effects in regard to "business tax deductions" resulting from work in California clubs no longer being allowed. If the California "employee" interpretation sticks, then all "business expense deductions" such as travel and accomodation expenses, tanning sessions, web site advertising etc. would no longer be allowed, with only "employee deductions" such as costumes and 6" heel shoes still being acceptable.

    As far as TurboTax goes, it is an excellent computer program for preparing your taxes. However, in order for it to work correctly, YOU have to know whether you're classified as an "employee" or "independent contractor" or both (both gets extremely messy!), YOU have to receive correct 1099 and W2 info from your employers, YOU have to create entries for other "non-1099" income which you receive but which nobody else will be reporting for you, and YOU have to correctly enter your "business deductions" and "employee business deductions". If you're unsure of these things, this is where a CPA comes in extremely handy as he will already know or will at least know where to find out.

  6. #6
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: filing taxes early next year

    However, by the wording of that law, all California clubs are supposedly obligated to report dancers' 2003 incomes via W2 or 1099 (with statutory employee box checked) by the end of January 2004.
    There is no box on a 1099 for "statutory employee". If you are an employee, you get a W-2. Non-employee compensation is reported on a 1099. Let's not make the situation appear worse than it is.

    However, Melonie is right that there is a substantial risk that clubs will send out 1099s in January 2004 for their independent contractors who worked during 2003. I suspect that the clubs will do this as California steps up club audits and questions expenses that have no corresponding 1099s. The auditors will also be questioning clubs on how they can operate with few or no employees and no independent contractors. This is an issue that is fraught with danger!

    All is not lost. Even though you missed two reporting deadlines, you still have two more. Get a CPA now and get straight with her. Look for someone who is an enrolled agent. They are the best for dealing with the IRS in this situation.

    HTH
    Z

  7. #7
    Veteran Member anklefrog's Avatar
    Joined
    Aug 2002
    Posts
    247
    Thanks
    0
    Thanked 39 Times in 4 Posts

    Default Re: filing taxes early next year

    What's a good way to organize and save receipts? I often forget when I'm getting my nails done for example and I never save any receipt, work related or not.
    It's better to be looked over, than overlooked.

  8. #8
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: filing taxes early next year

    What's a good way to organize and save receipts? I often forget when I'm getting my nails done for example and I never save any receipt, work related or not.
    To survive an audit, you need receipts. Start saving them.

    The way I do it is with a large accordian file folder with many slots. You can buy them at just about any office supply store. Get one with the tabbed dividers. I lable the dividers with the various expense categories on the tax return. I put the receipts in the appropriate section of the folder. At the end of the year, I copy all my checking account statements for the business account and put them in front of their own tab. My buisness credit card statements go in their own section in the folder. I have one business credit card that I use for most of my stripping business expenses so I usually have a double check.

    Get an account book, or if you like, buy one of the various computer book keeping programs. They both work, it's mainly your preference. Write down each expense in the account book, under the appropriate category. That way you have a running account during the year and the documentation to back it up if there is a question. Record your income the same way. I always put my money in the credit union after work so I have a deposit slip for almost everything I made during the year. Deposit slips have their own tab in the accodian folder. That allows you to balance your books as well. Even banks and credit unions make mistakes.

    At the end of the year, you can take your folder, printouts from your book keeping system, or just copies of the ledger to your accountant, and she can prepare your tax return. You will also need to do quarterly estimates. Again, you can take the books and accordian folder to your accountant, or once you have things well under control you might use turbotax to prepare your own returns and estimates.

    If you are planning on deducting costumes, shoes, makeup and other items that are sure to draw questions, take pictures of them. Also, it helps if the receipt says "costume" or "six inch platform heel" or something like that. G-string, high heel women's shoes, mini-dress will not cut it at an audit. These are clothes that are not deductible. Somewhere down the line is a long list of things that are not deductible. Or you can go to irs.gov and they have lots of publications in pdf form to help you.

    Get a TPIN!!!!!! This is especially true in California if you want to preserve your independent contractor status and the deductions that go with it! Even if you city does not require a dancers license, go somewhere that does and get one! A license is one of the items of evidence that California is going to look at in making a determination of your status.

    In the alternative, file a request with the IRS to determine that you are an employee. I don't recommend this to anyone as the first few people who do it are likely to get fired, or worse. But, if there is a brave soul out there who would like to try, it would be fascinating to watch the outcome. (I suggest that if you take this action you have a great tax lawyer and at least two mafiosi who owe you huge favors. Independent wealth, like say 10,000 shares of IBM class A common stock, would help as well.)

  9. #9
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: filing taxes early next year

    Zofia you are right that according to the IRS website there is not a specific box for statutory employee on the new 2003 1099-misc form. What they now have is a box 15 where the "payer" fills in statutory employee or anything else required. "Payers" are required to use the 1099 form and not the W2 form for workers who would be considered independent contractors under general IRS rules but who have instead been deemed to be employees via state statutes! The entire arena of how the IRS will actually treat workers whom a state has deemed to be a statutory employee is very much up for controversy according to my accountant, with a change from present policy of giving benefit of the doubt to independent contractor status being entirely possible in this new era of budget deficits (obviously states and the IRS can collect more tax money on a given gross income from regular or statutory employees, since they are allowed way fewer deductions from gross income).

    Besides the long "unofficial" list, my own accountant uses the "housewife test" to determine whether or not I should try to deduct certain items as business expenses. Basically, if a housewife would never spend money on something (i.e. 6" heel shoes, silver spandex dresses, her own home tanning bed, theatrical makeup) it should pass muster as an acceptable independent contractor business expense deduction. However, if a housewife would spend money on something (hair salon, retail makeup, bikini, tanning sessions) there's a pretty good chance that the IRS will disallow the deduction. The IRS criteria is that something must ONLY be used/beneficial for business purposes in order to qualify as an independent contractor business expense deduction. Employee business deductions have a much shorter list of eligible deductions, basically only costumes and shoes. Statutory employee allowable deductions are technically undefined, meaning you won't find out whether or not an independent contractor business expense deduction is eligible or not for someone classified as a statutory employee until you try to claim it and the IRS and/or state tax dep't shoots it down.

    I would also expand on your comment about requesting an IRS specific ruling as to whether you're considered an independent contractor or an employee. Considering that a large share of eastern club ownership is in the 'Omerta' camp, I would definitely like to see how many of the first 10 dancers who try this actually live past April 15th 2004 before seriously considering it myself!

  10. #10
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: filing taxes early next year

    Zofia you are right that according to the IRS website there is not a specific box for statutory employee on the new 2003 1099-misc form. What they now have is a box 15 where the "payer" fills in statutory employee or anything else required. "Payers" are required to use the 1099 form and not the W2 form for workers who would be considered independent contractors under general IRS rules but who have instead been deemed to be employees via state statutes! The entire arena of how the IRS will actually treat workers whom a state has deemed to be a statutory employee is very much up for controversy according to my accountant, with a change from present policy of giving benefit of the doubt to independent contractor status being entirely possible in this new era of budget deficits (obviously states and the IRS can collect more tax money on a given gross income from regular or statutory employees, since they are allowed way fewer deductions from gross income).
    Well, there is no controversy on how the IRS treats statutory employees. They report their income on line 1 of the Schedule C or C-EZ and are entitled to all the deducitons for ordinary and necessary business expenses. Further, IRS rules do NOT [emphasis added] limit the statutory employee business expenses to 2% of AGI.

    However, any club daring to designate an employee a "statutory employee" is foolhardy at best. Such a designation subjects the club to the payment of all employment taxes. Such a designation prohibits the club from using the relief provisions as the club knows it has misclassified the employee.

    Being a "statutory employee" is not a bad thing from the taxpayers point of view! You get the club to pay their share of social security, medicare and FUTA, while the employee gets all the Schedule C deductions. The only down side is the "statutory employee" is responsible for filing and paying her estimated taxes, not only on social security and medicare but also income taxes. Additionally, California covers "statutory employees" under their Workers Compensation system and "statutory employees" have all the protections of California employment laws. Of course, the clubs have to pay Unemployment Insurance and Workers Compensation insurance for the "statutory employee". Unfortunately this only applies to California. If the clubs follow the rules, I like the "statutory employee" approach.

    My concern is the clubs will not follow the rules, i.e. pay their share of social security, medicaid and FUTA, California unemployment and workers compensation. The filing dancer will then be stuck with the possiblity of underpaying her social security and medicaid taxes on her estimates. The non-filer is still going to be in a world of hurt come next April 15 because the IRS may very well have a paper trail to catch her.

    From the admittedly sparse sample of responses I got from my reporting question earlier, I think that many clubs did not issue 1099s for 2002. I suspect that they may not have collected sufficient information to do that. I would be very interested in finding out if the clubs are collecting information for 1099s for 2003. A word to the wise, if the club has your TPIN or SSN and your real name, they definitely have enough information to file a 1099 or W-2!

  11. #11
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: filing taxes early next year


    However, any club daring to designate an employee a "statutory employee" is foolhardy at best. Such a designation subjects the club to the payment of all employment taxes. Such a designation prohibits the club from using the relief provisions as the club knows it has misclassified the employee.
    Well, California clubs supposedly no longer have the option of designating dancers as independent contractors under the Employee Dancer law, leaving them 2 choices. #1 they can either treat their dancers as full employees with full benefits, funnel every single dollar that customers spend in clubs through the cash register and into dancer paychecks, and report 100% of their incomes via W2. #2 they can attempt to preserve some dancer independence and can attempt to provide less than full benefits by treating their dancers as statutory employees.

    Being a "statutory employee" is not a bad thing from the taxpayers point of view! You get the club to pay their share of social security, medicare and FUTA, while the employee gets all the Schedule C deductions. The only down side is the "statutory employee" is responsible for filing and paying her estimated taxes, not only on social security and medicare but also income taxes. Additionally, California covers "statutory employees" under their Workers Compensation system and "statutory employees" have all the protections of California employment laws. Of course, the clubs have to pay Unemployment Insurance and Workers Compensation insurance for the "statutory employee". Unfortunately this only applies to California. If the clubs follow the rules, I like the "statutory employee" approach.
    I agree entirely IF the club actually lives up to its end of the statutory employee deal and IF the dancer only works at clubs that classify her as a statutory employee. The potential risk comes in when that dancer also travels and works in clubs outside the state of California, which can potentially lead to questioning of her independent contractor status in other clubs.

    My concern is the clubs will not follow the rules, i.e. pay their share of social security, medicaid and FUTA, California unemployment and workers compensation. The filing dancer will then be stuck with the possiblity of underpaying her social security and medicaid taxes on her estimates. The non-filer is still going to be in a world of hurt come next April 15 because the IRS may very well have a paper trail to catch her.
    This is my main concern also. I really hope that the other areas of discussion don't detract from this very important point. Girls need to understand that the California Dancer law effectively requires that clubs MUST contribute on behalf of every dancer to SSI, comp, state medical etc. These are new costs to the club, and can add up to several thousand dollars per year per dancer.

    The only way that the clubs can "recover" any of these new costs are to "deduct" new expenses. The obvious new expense for the clubs to deduct is the money which they pay out to dancers for private dances, funny money cash-in's etc. This is going to be a HUGE motivation for California clubs to report every dollar of 2003 dancer's incomes that they possibly can next January, since the clubs can't take the deduction unless they can show that the expense existed via 1099's or W2's issued to dancers!

    All of the other aspects are certainly secondary to the dancer income reporting by California clubs which is very likely to occur for the first time next January. This creates a huge risk that next February the IRS and Cal state tax dept are going to be combing through these new 1099's and W2's, checking tons of previous tax returns to correlate the SSI numbers reported on these 1099's and/or W2's with tax returns filed by these dancers in previous years, and checking for estimated tax payments made by these dancers in 2003.

    Next April the IRS and Cal state tax dept are going to be combing through dancers' current year tax returns. Given the huge budget deficits in California and in Washington, DC, By June of 2004 this situation has the potential of siccing an auditor on every California dance club and on most California dancers. Since the past three years of income and taxes can be investigated during these audits, dancers who have not reported previous year's earnings but who are shown in Club records to have been working as dancers could conceiveably be looking at some truly astounding tax bills and penalties.

    How astounding ? Well, let's assume a hypothetical dancer who earns $1000 a week and who is single. Fed and state tax bracket is perhaps a combined 33%. If the club reports a $50,000 annual income via 1099 or W2, the 2003 taxes due would be like $16,500. But if it is discovered in club records that this dancer was also working there in 2001 and 2002, the IRS could forecast that the dancer earned the same amount in those years on which no taxes were paid, adding $33,000 in back taxes. Then the IRS could tack on interest and penalties of another $10,000 if they're so inclined. Total tax bill which could arise for California dancers who have not reported their incomes might be $16,500 + $33,000 + $10,000 = $59,500 !

  12. #12
    Senior Member DenverD's Avatar
    Joined
    Jun 2003
    Location
    Denver
    Posts
    147
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: filing taxes early next year

    Here is my 2 cents. It depends if you are an independent contractor or an employee, and each situation will be a little different . If you are an employee, you report your tips on your time card and the business accountant figures it out and reports all tips on form 8027 at the end of the year for the club side. Be careful if you are an employee at a club! They may withhold from paychecks FICA, state, city and local taxes( which MUST be done), but only withhold to federal for the tip base pay per hour (usually 2.13 i) and not withhold tips you have reported. It's because of tips reported that dancers will get a stub that reads "This is not a check" because the reported tips are taxed on the other taxes , until the paycheck is depleted ( that's how a lot of Denver clubs do it anyway).So at the end of the year, Federal says "you haven't witheld enough, give us more, thank you."

    I am an independant contractor. All through the year I keep receipts for costumes and performance related accersories, I keep a journal of tip outs and house fees, odometer readings and milage, I pay an estimated tax quarterly, and come April tax time, I take this stuff to my tax lady, we do the 1040, itemize, and she whips out the "beloved" schedule C. You enter your revenue (be careful! It's gotta jive with whats shown going into your checking and saving account, Uncle Sam see all, KNOWS all)write off the expenses from the journals and receipts, and you get a net figure, it gets added to 1040, you get a credit for the taxes you have pre paid, blah blah blah, and you are done with Federal. Now for the carnage!! Because I am independant I am liable to pay the full amount of FICA.. OASDI 12.4, HI 2.9. THIS ALWAYS EATS MY LUNCH! Now that I have a house, spouse and kid, it gets better,( we actually get refunds ! ) but before that I used to pay out the ying yang. You know what else? The IRS is VERY helpful in organizing payment plans...

    I go through all that trouble because I want'ed my dreams to come true. I wanted to do good things with the money I made, so I got advise from my tax preparer to do it that way , I needed to PROVE income over the years to buy a house (aka The Paper Trail). I still work for my money, but in return my money is also working for me now. And it's not all REALLY that troublesome, once you get used to it and develop a system for it. Adjusting to customers' different personalities just to keep a conversation with them I find much more difficult than book keeeping. But the key is to find a good tax preparer, not turbo tax, not h&r block (the McDonald's of tax preparers), and use them year after year. He/she is your finaniacl doctor, and can give you great advice about how to organize your taxes and obtain your goals.
    **Live Long And Prosper**

  13. #13
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: filing taxes early next year


    Well, California clubs supposedly no longer have the option of designating dancers as independent contractors
    Actually, they do have the option. Read the statute, I posted it over on Tre's site. The statute only creats a presumption, nothing more. I'll preview my business review article. The statute only codifies existing common law and adds one new twist, it looks at the remedy for termination of a dancer's services, or any employee, to help determine the status.

  14. #14
    God/dess Zofia's Avatar
    Joined
    Apr 2002
    Location
    Durham, North Carolina
    Posts
    2,417
    Thanks
    2,964
    Thanked 2,370 Times in 934 Posts

    Default Re: filing taxes early next year

    Here is my 2 cents. It depends if you are an independent contractor or an employee,
    Sigh...DenverD, Melonie and I have been hashing this California issue for almost a year now. Here's the Readers Digest version: California passed a statute that purports to codify the common law that defines an independent contractor. The statute, following more recent court decisions, creates a presumption that anyone who works for someone else is an employee, unless certain conditions are met. The big concern Melonie and I both share is that California clubs will elect to treat a dancer as an employee or statutory employee rather than an independent contractor, without the club paying their tax obligations. Most clubs claim that dancers are independent contractors and many clubs do not even follow the law by sending the IC a Form 1099 at the end of the year reporting their payments to her. That leaves the dancer in the position of reporting to the IRS and state tax authorities on her own. The other big concern we share is that clubs will find themselves being the subject of increased scruitny by the Franchise Tax Board and then decide to send out a bunch of 1099s.

    Where we disagree is just how the clubs will designate the dancers. I do not think the clubs will be foolish enough to declare their dancers are "statutory employees" because that would mean the clubs will be admitting that they evaded their FUTA, Social Security, Medicare, State UI and Workers Comp tax obligations. Melonie disagrees with me.

    My personal take is that the dancers are better off being "statutory employees" rather than employees or ICs. "Statutory employees" still report their income on a Schedule C and they get all the deductions for ordinary and necessary business expenses, while the clubs pay half of the Social Security and Medicare taxes and all the FUTA, State UI and Workers Compensation. My concern is that the clubs are not now paying any of the employment taxes. We shall see how this plays out.

  15. #15
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: filing taxes early next year

    Yup, Zofia and I may be projecting different possible outcome of details, but I think that we both totally agree on the following in regard to California dance clubs and dancers

    - The IRS and Cal State Tax Dep't will have their noses poked much deeper into club and dancer income reporting and finances than they ever have before

    - clubs everywhere have been getting away with "having their cake and eating it too" for years by actually treating dancers as independent contractors in those areas that suited them (like no benefits for the dancers and no payments to the gov't for comp, SSI etc.). At the same time clubs would try and treat dancers as employees in other areas where it suited them (like requiring that girls work specific shifts on specific days, establishing club rules which the dancers must follow, setting prices for private dances etc.). The new law and the new attention it brings is definitely going to make clubowners unhappy since it will either cost them big money or force them to loosen their rules and shift requirements, or both.

    - the only way that clubs can partially escape these new extra costs is to lay the problem off on the club's dancers instead of themselves by reporting everything under the sun as dancer's income which the club can then deduct as a business expense from their own tax bill. Of course this is a huge departure from past club practice of reporting partial dancer's earnings via 1099 (like private dance payouts but not stage tips) or of not reporting dancer incomes at all. The California law also has provisions which supposedly discourage direct payments of cash in any form between club customers and dancers, which has led to the creation of funny money club bucks tipping, sales of private dances through the club's cash register etc. The club bucks cash-ins and private dance split payments from the club to dancers are now totally accounted for by the club and totally reportable as dancer income.

    - California dancers who have taken advantage of the partial or non-existant club income reporting in the past to report and pay taxes on less than the entire actual amount of their earnings are very likely to be in for a rude awakening as clubs begin to report 2003 dancer incomes in January 2004 to save the clubs own ass tax wise. Unfortunately for these dancers, this time there is very likely to be lots of documentation supplied or subpoena'd on the part of the clubs which can be used by the IRS and/or Cal State Tax Dep't to audit dancer's tax returns for 2003, and also for 2002 and 2001 if club records even mention the dancer's name for previous years.

    - the only way we are going to know how this all actually will shake out is AFTER the IRS and Cal State Tax Dep't decide to make an example of a few California club chains and the dancers that work for them. This will undoubtedly lead to tax court cases and judge's decisions which will then serve as legal precedent. Once legal precedents are in place, it is virtually assured that other California clubs and dancers will receive vast amounts of tax attention. There is also a risk that these legal precedents will affect Federal tax thinking and will proliferate to clubs and dancers in other states eventually.

Similar Threads

  1. Filing taxes in Canada
    By Smurfette in forum Other Work
    Replies: 8
    Last Post: 04-04-2016, 05:22 PM
  2. Filing Taxes
    By MsChaos in forum Stripping (was Stripping General)
    Replies: 3
    Last Post: 01-29-2011, 04:49 AM
  3. Benefits of filing/not filing taxes?
    By Autumn Lily in forum Dollar Den
    Replies: 37
    Last Post: 01-25-2010, 11:48 AM
  4. Benefits of filing/not filing taxes?
    By Autumn Lily in forum Newbie Board
    Replies: 5
    Last Post: 12-30-2009, 05:35 PM
  5. Filing Taxes in Canada
    By katerina29 in forum Club Chat
    Replies: 0
    Last Post: 09-28-2007, 04:18 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •