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Thread: What % should I put aside for taxes

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    Member LatinaDancerNJ's Avatar
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    Default What % should I put aside for taxes

    Hello all:



    This is my first year dancing and I understand that as a independent contractor I must pay taxes quarterly, my question to you girls is: What percentage of my taxable income should I put aside for federal and state taxes? I would rather get a refund than having to pay. Please advice.



    LD
    Marilu

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    Featured Member exotica17's Avatar
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    Default Re: What % should I put aside for taxes

    I don't know what the tax brackets are in NJ, but I would put aside about 30% each night.

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    God/dess montythegeek's Avatar
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    Default Re: What % should I put aside for taxes

    You have 4 taxes to worry about covering

    Fed income
    State income
    self-employed FICA/HC
    Any taxes where you work if you work in a different state than you reside.

    The income taxes are going to go up the higher your income and go down the lower it is- so there is no single answer. the first time I would overestimate and use a number like 30-33.3%, then adjust--unless you know something to bias the number down or are a BIG income generator. Then adjust and give you "set aside" fund a little cushion--just in case.

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    God/dess Emily's Avatar
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    Default Re: What % should I put aside for taxes

    Just a though about you wanting a refund....

    If you send in your last tax payment on Jan 15th, and provided you are owed a refund, then I'm assuming you'd file early. So let's say you file Feb 1st. Then you essentially get some of what you just paid them two weeks prior. Essentially you're giving them a 2 week loan, which doesn't really help you save any and doesn't provide any real windfall.

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    Member LatinaDancerNJ's Avatar
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    Default Re: What % should I put aside for taxes

    Thank you guys for the info, I think I would put aside 35% of my net income every night just to be safe.



    Emily, I didn't quite understand your massage. I just started dancing January 1st of 2005 so my first quarterly payment is not until April 15 [am I right on this?] so the main question was; what percentage of my net should I put aside for taxes.



    I think exotca17 and montythegeek have answered my question; ball park it should be between 30% and 34%

    LD
    Marilu

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    Default Re: What % should I put aside for taxes

    Yes the April 15th 2005 estimated tax payment is for income earned between January 1 and March 31 2005.

    As far as the effective tax rate, you've got a 14% self-employment tax (equivalent to Social Security tax) no matter what, plus a federal income tax percentage somewhere between 10 and 33% depending on the amount of income you actually earned and your personal situation (15% is pretty typical for a single dancer earning $1000 a week or so), plus probably 4% in New Jersey state income tax. Hopefully you're not dancing across the river in NYC, because if you are you'll owe NYC a city income tax of about 3% too even though you don't live in New York !

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    God/dess Emily's Avatar
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    Default Re: What % should I put aside for taxes

    You said you'd rather get a refund than pay taxes. I'm saying the refund you'll get at the end of this year will be right after you make your final quarterly payment, so why do you want a refund?

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    Veteran Member DJ_WuLf's Avatar
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    Default Re: What % should I put aside for taxes

    Refunds are stupid. Send ME your money and I'll HOLD it for you until your taxes are due. I Gaurantee you I am a better financial risk then our Government. You should always owe $100-200 when you file your 1040.

    Also why does everyone forget that taxes are only owed/paid on NET income? Any dancer should have schedule C expenses of $30,000 if not more. Just a $50 a night house fee equals $13,000 a year. If you're not spending $15,000 on costumes and shoes .... GO FREEKIN SHOPPING!!!! Dance 2 nights on that week in Florida and write the vacation off dammit!!

    Melonie, Jon and Monty .... Get real. Tell the ladies the whole story. Businesses expense, deduct and depreciate thier ASS(ets). Dancing is a freekin business.
    Nobody in business pays 35% of Gross in taxes.
    14 years working in Strip Clubs. "What a long strange trip it's been"

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    Default Re: What % should I put aside for taxes

    Quote Originally Posted by DJ_WuLf
    Also why does everyone forget that taxes are only owed/paid on NET income? Any dancer should have schedule C expenses of $30,000 if not more. Just a $50 a night house fee equals $13,000 a year. If you're not spending $15,000 on costumes and shoes .... GO FREEKIN SHOPPING!!!! Dance 2 nights on that week in Florida and write the vacation off dammit!!

    Melonie, Jon and Monty .... Get real. Tell the ladies the whole story. Businesses expense, deduct and depreciate thier ASS(ets). Dancing is a freekin business.
    Nobody in business pays 35% of Gross in taxes.
    You are giving "incorrect" advice here, DJ. You CANNOT take a vacation, work 2 days and write the whole trip off. You can only write off the days that you worked...if someone gets audited and they ask for proof of this person working the whole week, then they'll be responsible for paying back what was written off while not working.

    What is the sense of spending $15,000 in costumes? That's insane. Especially in GOWN clubs where there is such a limited "costume" choice.

    Sorry...you tend to give REALLY bad advice. But, what do you expect? You're no accountant, CPA, or Tax Lawyer. Maybe you should really stick to what you do best (whatever that is) and leave this stuff to the people who actually know what they are talking about (Monty, Jon, Mel).

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    Default Re: What % should I put aside for taxes

    Your also not really alloud to write off costumes either. Though the irs doesnt always catch it. Its still not aloud.

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    God/dess Emily's Avatar
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    Default Re: What % should I put aside for taxes

    I don't see the point of buying something just because you can write it off.

    I'd rather pay tax on it and save it.

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    Default Re: What % should I put aside for taxes

    It's not that you buy something just so you can write it off, I have seen people that did do that, it is more the case that you bought somethihg, normally expenseive and are now trying to figure out how to write it off. An example, lets say I go out and buy an expensive lawn mower to cut my 2 acre lawn and I decide I would like to write it off. I could "claim" to be an I/C in the lawncare business, all records as far people I worked for are of my own creation, I will claim that I worked for all cash, I could just pick names out of the phonebook if I wanted, "Well MR. IRS agent I bought this John Deere tractor for 10K and I made 10100 cutting grass. yes if the IRS REALLY investigates I am screwed but I would probably survive most audits. The numbers are not quite reality but you get he idea.

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    Veteran Member DJ_WuLf's Avatar
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    Default Re: What % should I put aside for taxes

    Wow, Somebody really took that Carlton Sheets comment wa too seriously. I Like the way some people sepak for (Monty, Jon and Mel). I think if I was that out of line those people would speak for themselves. I (as opposed to some zodiac signs) can take being told I am wrong but I Agree that the acknowledged experts should do that job.

    As for the Florida trip, IF you are only scheduled to work 2 days the expenses of the trip are deductible. Certain expenditures of course are not like most non business meals since you wuld have had to eat at home, and any recreational activities, but the trip itself IS A business expense. Exxperts? Yea or Nay?

    Michele1: Costumes that are purchased and apply strictly to/for the Job of dancing are certainly a viable business expense, either depreciable or in some cases direct deductions from Schedule C income. Experts? Yea or Nay?

    Lena:While I don't advocate buying $15,000 in costumes or shoes you don't NEED, I do advocate deducting those items you WANT when applicable. Schedule C Deductions are not limited to business related dancer only clothes (Read that as UNIFORMS for other business's) or business related travel. Read over a Schedule C and see for yourself the long list of areas that being an IC makes available.

    I stand firmly by my opinion that most dancers filing a Schedule C should have 50% of thier income sheltered by deductions/depreciation. Experts? Yea or nay
    14 years working in Strip Clubs. "What a long strange trip it's been"

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    Default Re: What % should I put aside for taxes

    Thank you to all who posted and answered my question. I think I am better prepared and know how much to put aside for my 2005 taxes. 35% to be safe.

    Thanks!
    Marilu

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    Default Re: What % should I put aside for taxes

    Quote Originally Posted by DJ_WuLf
    Wow, Somebody really took that Carlton Sheets comment wa too seriously. I Like the way some people sepak for (Monty, Jon and Mel). I think if I was that out of line those people would speak for themselves. I (as opposed to some zodiac signs) can take being told I am wrong but I Agree that the acknowledged experts should do that job.

    As for the Florida trip, IF you are only scheduled to work 2 days the expenses of the trip are deductible. Certain expenditures of course are not like most non business meals since you wuld have had to eat at home, and any recreational activities, but the trip itself IS A business expense. Exxperts? Yea or Nay?

    Michele1: Costumes that are purchased and apply strictly to/for the Job of dancing are certainly a viable business expense, either depreciable or in some cases direct deductions from Schedule C income. Experts? Yea or Nay?

    Lena:While I don't advocate buying $15,000 in costumes or shoes you don't NEED, I do advocate deducting those items you WANT when applicable. Schedule C Deductions are not limited to business related dancer only clothes (Read that as UNIFORMS for other business's) or business related travel. Read over a Schedule C and see for yourself the long list of areas that being an IC makes available.

    I stand firmly by my opinion that most dancers filing a Schedule C should have 50% of thier income sheltered by deductions/depreciation. Experts? Yea or nay
    Bottom line- Experts say........... As long as it is a legal deduction . We all must use common sense when using deductions. For instance someone may be legally allowed to use a mortgage/rent deduction for a home business. However it raises a flag and may have this person audited by the IRS. Yes it can be used if done completely legal but some people choose not to because of the red tape that comes along with using such a deduction. If you have all your I 's dotted and T'S crossed you could, but is the risk of an audit worth it?

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    Default Re: What % should I put aside for taxes

    In re: the costumes, here in Australia, it all depends on where you purchase the costume. If you have a dressmaker create your costumes then it is deductible. If you purchase your costumes from an "adult store" it is deductible. Where it becomes harder to deduct something as a costume is when it is bought from stores that the 'average' person would buy from ie Bra n Things in re: lingere (it's a retail store).

    As a general rule of thumb, 35% is a good 'benchmark' to use - I even advocate that for exotic dancers here in Australia.

    As for the deductibility of travel - I've covered that in the "For Australians" post in this section. Certain expenses are deductible in re: travelling for work but not all. A "Travel Diary" is a must ... this is where MYOB comes in handy.


    enter: E3167322D9 for your 10% discount

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    Default Re: What % should I put aside for taxes

    can u reccommend a tax professional for me i live in fort lee nj

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    Default Re: What % should I put aside for taxes

    So can you write off all house fees or does it depend on ic/employee status from state to state?

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    Default Re: What % should I put aside for taxes

    ^^^ it depends on whether the charging of house fees by the club is legal in your state and working status. If you are an 'independent contractor', then being required to pay house fees to a club is a deductible business expense. However, if you are an 'employee', then any money you pay to your employer for charges / fees that are not legal for them to impose under state law are I suppose considered to be a non-tax deductible voluntary gift on the part of the 'employee' dancer.

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    Veteran Member Scout's Avatar
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    Default Re: What % should I put aside for taxes

    Here's a nifty tax calculator:

    http://finance.yahoo.com/taxes/calculators

    It's gives a rough estimate of what you might pay with a specified income. Be sure to include the self-employment tax too.

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    Default Re: What % should I put aside for taxes

    ^ thanks for posting the link scout.
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