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Thread: I'm a little confused.

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    God/dess VenusGoddess's Avatar
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    Default I'm a little confused.

    I just got a W-2 AND a 1099 from my club for the time that I danced last year. What? I didn't think that I could be BOTH an employee AND an IC at the same time. Now, if I am an IC, then aren't I going to have MAJOR penalties for not filing quarterly? I never knew I was an IC as I only filled out a form for a W-2... So, what the hell do I do with this now?

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    Default Re: I'm a little confused.

    Did you dance, I won't use the term "full time" but at least on and off the whole year? Did you only dance, and never get a paycheck or possibly get paid in cash for something other than "your share" of dancer drinks, bottles of Champage or lap dances? most commonly this is if you worked some nights as a waitress or bartender. If the answer is yes, then I don't know what you got a W-2 for. How much is it for compared to the 1099? if you did work as a waitress or whatever off and on through the year you might, I repeat might skate by with not having made estimated payments. However start making them, Jan. 15 has come and gone and it might may be to late to make that one, if it is oh well, nothing can be done about that now as far as I know, make sure you make the next one in APR.

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    God/dess VenusGoddess's Avatar
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    Default Re: I'm a little confused.

    I worked for 6 months dancing part time at this club. I got a paycheck every two weeks. When I was hired I filled out the form for the W-2...but no one ever said that I was going to get a 1099 (and I didn't think I would since I got a paycheck). So...if I get a paycheck from the same company that issues me a 1099...how am I supposed to file quarterly? And, why would I be expected to if I'm supposed to be an "employee" and everything that they say to me is that I am an "employee" of the company?

    Does this mean that all of my "house fees" are deductible? Can I still deduct everything that I originally couldn't as a W-2'ed employee...or is there some really strange thing going on here? Monty? Melonie?

  4. #4
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    Default Re: I'm a little confused.

    There a lot of things at play here. I didn't handle these in the business, but.

    If you filled out a W2 to be an employee, then you started as an employee. If you then went to a part-time status they would continue to pay you as an employee.

    There are definite rules relative to the difference between being an employee and independent contractor as defined by the IRS for payroll deposits, state workmans compensation, unemployment taxes, etc.

    Unless laws have changed, it is hard to define someone as an employee one day and a contractor as the next. ..especially without some type of notification. How did your paycheck stubs look? Did you see Soc.Sec. and other taxes suddenly stop being withheld? That should have been the red flag.

    Filing Quarterly really has to do with withholding adequately not necessarily IC status.

    I hope I am correct, but go look at your paystubs.

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    Banned Melonie's Avatar
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    Default Re: I'm a little confused.

    I just got a W-2 AND a 1099 from my club for the time that I danced last year. What? I didn't think that I could be BOTH an employee AND an IC at the same time
    Well, when clubs aren't following the correct IRS procedures anything is possible. My guess is that the club is treating you as if you are working two different jobs. Your first job was as a club employee, during which time you received a paycheck from the club, the club declared a certain amount of income and withheld and sent to the IRS on your behalf a certain amount of tax money. I would say that during this time period, since the club was withholding taxes from your paycheck and sending that money to the IRS that you don't need to worry about non-payment of estimated taxes.

    Of course this situation is subject to the huge catch 22 of the IRS code requiring tipped employees to report their tips to their 'employer', who is in turn required to report that tip income to the IRS, to withhold taxes and pay unemployment and comp premiums to the state on the employee's behalf etc. I'll bet that the club would only allow you to report a small amount of tip income rather than your actual income, which effectively places you in the position of only claiming the amount of income shown on your W2 for this time period or risk triggering an audit due to a major discrepancy in the amounts reported by the club in your name versus the amounts you report.

    I'm guessing that at some point in the year the club figured out that it was skating on thin ice by treating dancers as employees but not allowing them to report their actual incomes (so the club could avoid having to pay the matching Social Security tax, unemployment & comp premiums etc. which go along with a higher reported employee income). There was probably a point where the club re-organized, where from an official standpoint your old job as an 'employee' dancer ceased to exist and was replaced by a new job as an independent contractor dancer. From that point forward all independent contractor rules would apply, including the responsibility of the independent contractor dancer to report and pay estimated taxes herself.

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    Veteran Member DJ_WuLf's Avatar
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    Default Re: I'm a little confused.

    The W-2 was for your income reported on a paycheck. The 1099 was for tip income (reported or estimated). 1099's are not just for reporting IC Earnings. Any business payment (in excess of a certian amount) is supposed to be reported by 1099. This situation is the Correct and legal way of reporting employee earnings when those earnings include reported wages and (reported or estimated) tips.

    They caught you hiding that tip income didn't they. tsk tsk tsk....... shame on you for cheating on your taxes.
    14 years working in Strip Clubs. "What a long strange trip it's been"

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    God/dess VenusGoddess's Avatar
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    Default Re: I'm a little confused.

    Quote Originally Posted by DJ_WuLf
    The W-2 was for your income reported on a paycheck. The 1099 was for tip income (reported or estimated). 1099's are not just for reporting IC Earnings. Any business payment (in excess of a certian amount) is supposed to be reported by 1099. This situation is the Correct and legal way of reporting employee earnings when those earnings include reported wages and (reported or estimated) tips.
    I see...but, I NEVER told them how much I made. They didn't take our "tips" (unless they were by credit card) down at the end of the night...

    They caught you hiding that tip income didn't they. tsk tsk tsk....... shame on you for cheating on your taxes.
    Excuse me? A little out of line here, don't you think? You don't even know what is going on here.

    The big problem is, that, according to MY records...the 1099 is WRONG. Of course, they are only 1099'ing what I made on credit card tips and not on what I actually made. Can I go "above and beyond" that number when I file my taxes? Or is that the number I am going to have to claim (what is on the 1099)?

    With the amount that is claimed on my 1099...how does this affect my write-offs? My write-offs are MORE than the amount on the 1099. But, in reality, my tips were way more than what the club claimed on the 1099...
    Last edited by VenusGoddess; 02-06-2005 at 07:12 PM.

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    Veteran Member DJ_WuLf's Avatar
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    Default Re: I'm a little confused.

    Geeze I was kidding. Where is your sense of humor? I'm trying to help you.

    The 1099 reported tips are (in your case) an estimate (or maybe just total CC charges) and would be low. You are free to claim whatever you wish above that reported on the 1099 but ....uhhh why?

    You are probably an IC even though you are on payroll and recieve a W-2. Many realtors, Car Salesmen, Massage Therapists ect. are IC's that get a paycheck/W-2 for base employment/contract and a 1099 for commission/tips in excess of thier base paycheck. Check with an accountant to be sure but I think you should be deducting that Carlton Sheets course along with your 9" platforms and pasties.

    edit: Backdoor into Schedule C deductions. (W-2 + 1099) - 30K = expenses
    For half a year use 15K instead of 30K.
    14 years working in Strip Clubs. "What a long strange trip it's been"

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    Default Re: I'm a little confused.

    Vips has been operating this way for years. You are still an indipendent contractor. 5$ an hour doesnt make you a true employee when 98 % of your income is coming from tips. Your 1099 is what you made in funny money. If you want to claim more is up to you, though you really should. It depend how much you made while there. I still did my taxes as if I was self employed and claimed the 1099 as income as well. Just bring all your paperwork to your accountant and explain the situation. The only taxes you pay there at vip are what they take out of the shift pay they pay you. Also when you were casing in your funny money, you had a card right?

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    Default Re: I'm a little confused.

    Yah, what DJ and Michele said. Claim what you were going to claim, take deductions like an IC, and do the W2 too. My accountant can do it, I'm sure yours can too. :-)



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    Default Re: I'm a little confused.

    A had to go back and ask my accountant about this one. He tells me that based on IRS interpretations and settlement agreements reached with the Casino and TaxiCab industries, that a SERVICE employee is technically required to turn in their tip money to their employer, who must then report the income, withhold taxes, and 'pay it out' to the employee through the business's payroll system. Therefore if service employees (like dancers) receive both a W2 for base pay (with taxes withheld) and a 1099 for tip earnings (without taxes withheld), this is not in accordance with recent IRS rules and is likely to draw extra IRS attention. A service employee apparently cannot be considered to be both an 'employee' and an 'independent contractor' while doing the same job - they must be one or the other.

    The situation is apparently different when an employee is selling a PRODUCT i.e. a car salesman receiving a commission on each auto sale, versus when an employee is selling a service i.e. a private dance. My accountant was trying to explain that after a car is sold it has an enduring value, whereas after a private dance performance is over the customer has nothing of value to take home with him, but I'll admit I didn't absorb what he was trying to explain.

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    Default Re: I'm a little confused.

    Mellomie were venus works you are not considered a service employee. The club has been run like this for close to ten years so if they werent doing it correctly I think they would know by know. Basically I think it was law in illinois (certain parts) were they had to start paying the dancers minimum wage to make it worth their while( on bad nights) but I dont think it affects the fact that you are still to file taxes and act as if you were self employed or an indipendent cont. I just claimed what was on my 1099 and whatever earned income I made and attached the w2 and the 1099 and thats how it works.Well something like that my accountant took care of it. She need to take everything to her accountant figure out her earned income and go from there.

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    Default Re: I'm a little confused.

    So, me claiming MORE than what is on the 1099 is NOT going to hurt?

    Okie dokie. I'll just take everything to my accountant next week. Thanks!!

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    Featured Member scorpio's Avatar
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    Default Re: I'm a little confused.

    You are such a dipshit. Now, run along and play with the other little boys. You were schooled once for not knowing what you were talking about, do we have to do it again?


    Quote Originally Posted by DJ_WuLf
    Geeze I was kidding. Where is your sense of humor? I'm trying to help you.

    The 1099 reported tips are (in your case) an estimate (or maybe just total CC charges) and would be low. You are free to claim whatever you wish above that reported on the 1099 but ....uhhh why?

    You are probably an IC even though you are on payroll and recieve a W-2. Many realtors, Car Salesmen, Massage Therapists ect. are IC's that get a paycheck/W-2 for base employment/contract and a 1099 for commission/tips in excess of thier base paycheck. Check with an accountant to be sure but I think you should be deducting that Carlton Sheets course along with your 9" platforms and pasties.

    edit: Backdoor into Schedule C deductions. (W-2 + 1099) - 30K = expenses
    For half a year use 15K instead of 30K.

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    Default Re: I'm a little confused.

    Mellomie were venus works you are not considered a service employee. The club has been run like this for close to ten years so if they werent doing it correctly I think they would know by know. Basically I think it was law in illinois (certain parts) were they had to start paying the dancers minimum wage to make it worth their while( on bad nights) but I dont think it affects the fact that you are still to file taxes and act as if you were self employed or an indipendent cont. I just claimed what was on my 1099 and whatever earned income I made and attached the w2 and the 1099 and thats how it works.Well something like that my accountant took care of it
    No offense intended here, but Casino dealers and Taxicab drivers used to file their base pay and tips differently in the past, until the IRS came marching in last year and told thousands of them that they and their employers were doing it wrong by not running tip income through the employer's payroll system.

    Also a state statute can deem certain types of workers to be statutory employees, but this is supposed to apply uniformly to similar businesses across the state (i.e. if the state law says every dancer must be considered to be a statutory employee then every club in the state should be treating their dancers as employees). Now I know that California arguably has such a law, but it is not followed by the majority of clubs and not enforced. However, no state can override the federal IRS code, as recently proven by the Mass statute which allows gay marriage, but which cannot allow married gay couples to file joint tax returns. The bottom line here is that, no matter what reason a particular club decided in the past to start treating their dancers as employees, to the IRS a tipped employee is a tipped employee - certain rules apply to both the employer and employee - and people who don't follow those rules may attract extra IRS attention this year even though they are following the same tax filing protocol which wasn't questioned in previous years.

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    Default Re: I'm a little confused.

    Dip Shit? How crude and immature can you get. As for "Schooling", You have to do it until you get it right unlike Jr High, testosterone overdoses, or Carlton Sheets courses.

    OK, I do appologize for forgetting some of what I learned in Kindergarten but in the real adult world I believe my statements will be for the most part supported by the Experts here. (Monty, Jon, Mel) Comments and criticisim welcome by logical adults.

    Melonie has stated on several occasions that the new tax interpretations are fluid and will only be settled as fact after challenged in court. I agree with this 100%. I too understand that the split status applies to Car Dealers and Realtors but might be questioned in the future for Service employees as it has been in the Sales Tax arena where some States placed Sales Tax on lap dances until they were proven to be consumable rather then durable. Bottom line is that as long as all known income is in some manner reported to the iRS, The burden has been met and only the method remains to be questioned. Opinions? Experts? Yea or Nay
    14 years working in Strip Clubs. "What a long strange trip it's been"

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    Default Re: I'm a little confused.

    yes. Dipshit. First, you insult Venus by accusing her of cheating on her taxes, then you make your snide comments about her real estate knowledge. Now, run along and play somewhere.

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    Default Re: I'm a little confused.

    Melonie has stated on several occasions that the new tax interpretations are fluid and will only be settled as fact after challenged in court. I agree with this 100%
    Yup, this fact is the basis for the majority of my (and my accountant's) fears. The IRS has announced a change in priorities away from analyzing deductions and toward the underreporting of income by 'cash oriented' businesses and workers. The IRS has spent billions beefing up its computing power and its automatic reporting links to state real estate and motor vehicle title agencies, financial institutions, and any business accepting large dollar amount transactions. States have been busy passing all sorts of statutory employee laws in an attempt to collect more unemployment and disability money, plus strengthening their data sharing ties with the IRS in an effort to stem their budget deficits via increased tax receipts. Add to that the new 'Enron Accountability Laws' which apply to the owners of corporate clubs who are caught cooking the books or pocketing unreported income (i.e. the club's share of unreported private dance money). To top it all off, there is very little in the way of established precedent or consistency in regard to strip club and dancer tax filing procedures and/or typical reported earnings amounts. Put it all together and it adds up to a high risk situation.

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