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Thread: Writing off Taxes

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    Default Writing off Taxes

    Hi,
    I'm planning on claiming what I make my first year of dancing for 2004. What receipts should I be saving? I was thinking nails, hair and gas because I drive 26miles both ways. Is there anything else? Also, do I need to hire an acountant to do my taxes?

    Thank You!
    Trisha

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    Veteran Member NVJosh's Avatar
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    Default Re:Writing off Taxes

    There have been a few threads about this. Hair and nails may be disallowed by the IRS because they are things that people get in the normal course of living. Yes, you need them more often, that just doesn't have to be a concern of the IRS.

    In addition to gas, keep records on repairs, car insurance, tolls (if any), car washes, etc. These are all deductible, or you can take the standard mileage deduction (whichever is more favorable). Also keep track of the cost of costumes, dry-cleaning, any other supplies you might buy (for instance, a video tape of lap dancing techniques), meals you eat during your shift, tips you pay, house fees you pay, hotel costs should you end up going out of town to work and the like.

    Working with an accountant is optional if you feel comfortable doing things yourself. However, a decent CPA will save you more in taxes than he charges you. Find one who specializes in working with self-employed individuals.

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    Featured Member NikkiD's Avatar
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    Default Re:Writing off Taxes

    From my understanding, the things that are acceptable to write off are ONLY things that you wouldnt walk around in public wearing or things that are required to do your job, like house. I save every house & clothing receipt and then I also keep a daily log of my income. I use MS money and just set up a cash account. That way, I dont need and a accountant, just a tax preparer who is up on the laws.


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    Veteran Member anais's Avatar
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    Default Re:Writing off Taxes

    NV Josh, meals you eat during your shift? How are those deductable? I did not know that?

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    God/dess montythegeek's Avatar
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    Default Re:Writing off Taxes

    Quote Originally Posted by anais link=board=6;threadid=6460;start=msg72665#msg72665 date=1076540536
    NV Josh, meals you eat during your shift? How are those deductable? I did not know that?
    I would await word from Josh since he is an accountant and knows these rules better than I. The circumstance under which a deduction for meals would be valid would be if you were an IC and were not allowed to leave the premises for dinner, i.e. were expected to be there from 5 to 2am come hell or high water. The comparable expense is an out of town business person not getting income from an employer reimbursing him for eating dinner on the road and putting it on an expense account. You can not deduct the bread and balogney you buy at the grocery store and take with you, but a constrained choice of buying takeout or starving would fit the reasonableness standard.

    Josh will no doubt clarify. There may be time constraint issues too if you can go out, but not long enough.

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    Veteran Member NVJosh's Avatar
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    Default Re:Writing off Taxes

    monty's essentially correct. If you are unable to leave the jobsite because of contractural restrictions, you'd be able to write off your meals. Its more or less equivalent to the "provided for the convenience of the employer" requirement for employees. They'd still be subject to the 50% limitation and could possibly be challenged. I just think you'd have a really good chance of defending the deduction.

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    Member parsifal's Avatar
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    Default Re:Writing off Taxes

    NVJosh posted: Hair and nails may be disallowed by the IRS because they are things that people get in the normal course of living. Yes, you need them more often, that just doesn't have to be a concern of the IRS.

    this really surprises me. i am in media/films/video/effects/etc and my friends and i write off every magazine, every movie, every cd or dvd. you get the idea. i believe some of my friends have been audited and no one has said these aren't deductible. my accountant agrees. so i can't imagine how hair and nails are not deductible. but NVJosh is the pro here.

    parsifal

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    Banned Melonie's Avatar
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    Default Re:Writing off Taxes

    Parsifal, in your line of business evaluating the competition via viewing DVD's, theatre tickets, movie mags would certainly be deductible. However, because I'm not in the same line of businesses I would get burned badly trying to take the same deductions. But along the same line of logic, I could deduct the cost of going to a club to watch a new feature perform even though I wasn't dancing myself, where you could not !

    The professional hair, nails, tanning salon, gym membership, normal sized breast implants etc. issue is of course in a different category altogether. The IRS uses a "housewife test" to help determine the eligibility of business deductions. If housewives would spend money on these things with absolutely no business reason to do so, then the IRS argues that they are beneficial on a personal basis and not strictly beneficial on a business basis, thus ineligible as business expenses. This will either result in these deductions being totally disallowed, or more often partially disallowed as part of a negotiated tax settlement.

  9. #9
    Pamela
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    Default Re:Writing off Taxes

    Meals i eat during shifts? All these years and i did not know this. What about working the phones, i am an IC and work 6 hour days at times, i log off the lines to eat, always. Is that do-able ?

    Pamela

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    Veteran Member NVJosh's Avatar
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    Default Re:Writing off Taxes

    I'm not sure if those would qualify because you are probably allowed to leave your work premises for your lunch breaks because you've logged off. In a club, if the dancer has to order in and may have to come out on the floor during lunch because a customer is there, they have much less freedom and have a much better case for making the meal deductible.

    Now, if you were incorporated, your employer (i.e., you) could say that you are required to eat lunch on company premises (i.e., your kitchen) during work hours because the company would lose too much production by having you off-site. That would make the meals deductible (subject to the 50% limitation) to the company. However, tax-deductible lunches are not reason enough to incorporate.

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    Veteran Member NVJosh's Avatar
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    Default Re:Writing off Taxes

    Regarding Melonie's post, I used to write off trips to SCs because I was attempting to acquire new clients. I felt I could legitimately write off cover charges and drinks for myself and dancers. As long as I actually picked up some new business from time to time (which I did), my trips clearly served a business purpose. Now, I thought writing off the cost of lap dances was going a little too far, so I didn't.

    OTOH, if Melonie went to another club and got a lap dance, she could probably argue that she was observing the techniques of other dancers in order to help improve her own dancing style and would have a pretty good case for making them deductible. A little aggressive, sure, however it could be a significant tax savings. I'm just not sure how I'd describe it on the "other deductions" line.

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    Veteran Member anais's Avatar
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    Default Re:Writing off Taxes

    What is the 50% limitation?

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    God/dess montythegeek's Avatar
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    Default Re:Writing off Taxes

    Quote Originally Posted by anais link=board=6;threadid=6460;start=msg74089#msg74089 date=1076878636
    What is the 50% limitation?
    Jimmy Carter fighting the 3 Martini lunch.

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    Default Re:Writing off Taxes

    I believe the 50% limitation refers to us only being able to deduct 50% of the meal cost, when we buy clients lunch etc.

    Up here (Canada) if I buy 2 or 3 or 4 clients lunch I still only get to write off 50% of the total bill. The rest I assume is meant to be the cost of the meal I would have to have eaten anyways.

    Things may be different down your way but esentially I think its the same.
    P.S. Im a realtor not an accountant so josh and others might know better.

    Canuck

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    God/dess montythegeek's Avatar
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    Default Re:Writing off Taxes

    Sorry for being flippant earlier, but Canuck is essentially right. Only half of it is deductible. The argument for only partial coverage of such expenses is to prevent extravagance by making the company pay part of its expense and therefore having an interest in cost control. They would have that anyway since the maximum tax rate is less than 100%.

    My comment is only partly a joke because in 1976 Jimmy Carter railled against the establishment's "3 martini lunch" in a populist appeal and got sufficient popular support that the limitation was put in.

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    Veteran Member NVJosh's Avatar
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    Default Re:Writing off Taxes

    It used to be 80%, and changed to 50% a while ago. Probably either the 1986 act or one of the acts from the beginning of the 90s.

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    Default Re:Writing off Taxes

    Josh can I write off my nails and wigs and clothes being that I sell lingerie in as a Melissa? What would the IRS say in my case. I already know i can write some of it off but does the 50% rule account here too or just to meals? I was told I could being that I am in the fashion industry
    Hugs and Love to all my ladies,
    Melissa

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    Veteran Member NVJosh's Avatar
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    Default Re:Writing off Taxes

    50% applies to meals and entertainment expenses, not everything. The rule for clothes is that if you could wear them in everyday life, they aren't deductible. For instance, if you are a limo driver and have to buy suits, you wouldn't get a deduction. However, if you were a doorman and had to buy your own doorman coat, you'd probably be able to deduct that just fine. My opinion is most dancer outfits are deductible as you wouldn't wear them in the real world on a practical basis. Nails are always going to be tricky. I think you have a better case on wigs, because your average housewife doesn't buy wigs, and they are part of an overall "uniform." There's no guarantee, of course, I just think you could probably defend that deduction.

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    Default Re:Writing off Taxes

    Thank you for the information Josh. WIsh I could get on the chat. I keep getting a trojan virus though everytime I try to go on it. Driving me nutz.
    Hugs and Love to all my ladies,
    Melissa

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    Default Re:Writing off Taxes

    Quote Originally Posted by NVJosh link=board=6;threadid=6460;start=msg73410#msg73410 date=1076686746
    Regarding Melonie's post, I used to write off trips to SCs because I was attempting to acquire new clients. I felt I could legitimately write off cover charges and drinks for myself and dancers. As long as I actually picked up some new business from time to time (which I did), my trips clearly served a business purpose. Now, I thought writing off the cost of lap dances was going a little too far, so I didn't.

    OTOH, if Melonie went to another club and got a lap dance, she could probably argue that she was observing the techniques of other dancers in order to help improve her own dancing style and would have a pretty good case for making them deductible. A little aggressive, sure, however it could be a significant tax savings. I'm just not sure how I'd describe it on the "other deductions" line.
    As it is popular for people to have a chat during a lap dance... couldn't Melonie also write it off as a way to study the club scene locally before deciding to do business in that city/town/county/club ??? Some dancers will just not share valuable information unless there is money involved.

    I know that I personally listen to a customer more when I am in a lap dance with them than on the floor. My mind is watching the room whilst also paying attention to whoever is in front of me... my attention on the floor will always be split and not focused unless it is obvious to me that I should... so I was thinking couldn't Melonie also put that lap dance under "research" and/or updating her knowledge about the business scene ???


    enter: E3167322D9 for your 10% discount

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    Default Re:Writing off Taxes

    I was also told by my accountant that in order to make an outfit (not costume or themed outfit.. they are obviously tax deductible) more tax-deductible that I should sew on my initials (or stripper name) in a visible part of the clothing. Hence have subsequently "branded" it... and now made it into a uniform.

    It is just like the "doorman's coat"... it is a normal coat with the establishment's "logo" on it (it is branded)... so it is a uniform.


    enter: E3167322D9 for your 10% discount

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    Default Re:Writing off Taxes

    so I was thinking couldn't Melonie also put that lap dance under "research" and/or updating her knowledge about the business scene
    theoretically yes I could - good idea. But practically speaking, writing off lap dances is a controversial area with the IRS because of abuse of the deduction by the 3 piece suit business crowd (plying potential clients by buying lap dances for them on company credit cards).

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    God/dess montythegeek's Avatar
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    Default Re:Writing off Taxes

    Quote Originally Posted by GoldCoastGirl link=board=6;threadid=6460;start=msg74293#msg74293 date=1076929262
    I was also told by my accountant that in order to make an outfit (not costume or themed outfit.. they are obviously tax deductible) more tax-deductible that I should sew on my initials (or stripper name) in a visible part of the clothing. Hence have subsequently "branded" it... and now made it into a uniform.

    It is just like the "doorman's coat"... it is a normal coat with the establishment's "logo" on it (it is branded)... so it is a uniform.
    I love this idea VEE! For some reason I had this vision of Super Heroes getting audited by the IRS. Clark Kent is facing the tax man and saying "But the red, white, and blue tights have a Big red S on the chest--- I can't wear those on the street. I'd be laughed at." Probably would not work well for undergarments though. LOL

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    Veteran Member NVJosh's Avatar
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    Default Re:Writing off Taxes

    Quote Originally Posted by Melonie link=board=6;threadid=6460;start=msg74309#msg74309 date=1076935365
    so I was thinking couldn't Melonie also put that lap dance under "research" and/or updating her knowledge about the business scene
    theoretically yes I could - good idea. But practically speaking, writing off lap dances is a controversial area with the IRS because of abuse of the deduction by the 3 piece suit business crowd (plying potential clients by buying lap dances for them on company credit cards).
    The aggressive way would be to put it under research, although even then the cost of drinks would be subject to the 50% limitation. To be less aggressive it would go under Entertainment. Honestly, it depends on what IRS agent is doing the audit and how knowledgeable he/she is. I think I'd probably go the aggressive route with the knowledge that I stood a chance of having it knocked down to a 50% deduction.

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    God/dess montythegeek's Avatar
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    Default Re:Writing off Taxes

    And here I thought Josh was going to say his accounting clothes had a big red J-logo in the front for "SuperJosh". LOL

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