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Thread: HELP!!! Taxes, deductions, house fees...

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    Default HELP!!! Taxes, deductions, house fees...

    So here I am, 24 hours before the deadline, getting started on my taxes....

    I've searched the forums up and down, but wasn't able to find the answer, so I thought I'd ask:

    WHERE do you write off the house fees?

    I mean, yeah, I know, schedule C, but under what? "Commissions and Fees" (that's what i did last year)? "Taxes and Licenses"? "Legal and Professional Services"? "Rent or Lease/other"? "Office Expense"? Or specify them separately under Part V - Other Expenses? Also, the tipouts to the house moms/make-up artists/DJs are mandatory, do I lump them in with house fees or put them under "Professional Services" or something?

    Also, another question. The clubs I've worked at report all funny money on the 1099's. Technically, my provable expenses are more than what I've got reported. Would those knowledgeable about such things recommend:

    a) Not deducting all of my provable expenses, but just enough to bring my tax burden down close to $0 (or a couple of hundred and pay that to appease the IRS) - this is what I did last year;

    or

    b) deduct everything I can and report making money above what was reported on the 1099's? How would I go about doing that? What form(s) would I use? I've seen people mention they use TurboTax, I have TT Deluxe at my disposal, if anyone's got any TT-spesific tips

    I understand that with plan B I'm showing that I make more money, which can be good for loans and stuff. On the other hand, I live a fairly modest lifestyle which can be supported by income under plan A, and I'm kinda apprehensive about actually _admitting_ to the IRS that I made more than reported. I seems that kind of thing would have implications beyond this last tax year, and would cast doubt on all previous returns.

    Any ideas? Suggestions?

    Please help!

    TIA

    -Vera

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    God/dess VenusGoddess's Avatar
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    Default Re: HELP!!! Taxes, deductions, house fees...

    I would strongly suggest you find a competent tax preparer (not at HR Block or the like) and file a request for an extension, and then get the deductions that you can...and have your butt covered.

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    Default Re: HELP!!! Taxes, deductions, house fees...

    legally speaking, house fees paid to the club are considered to be Commissions and Fees.

    legally speaking, tipouts to DJ, bouncers, house mom etc. depend on the employee or independent contractor status of these people. If they are club employees, then tipouts also fall under Commissions and Fees. If they are independent contractors, then tipouts fall under Professional Services.

    However, if they are independent contractors, and if the amount of individual tipout payments exceeded $600 in 2004, legally speaking you need to issue a 1099-misc form to each DJ, bouncer, house mom etc. in order to take the deduction. Typically this does not happen. Therefore when you attempt to take the deduction the IRS may challenge it on the basis that if you didn't issue 1099's then any money you 'voluntarily' handed to DJ's, bouncers, housemoms etc. is a NON-deductible gift on your part rather than a legitimate business expense.

    As far as you having received a 1099 from your club which only covers credit card based payouts, the IRS is going to assume that you also had cash tip income not reported on the 1099 which was at least equal to the 1099 amount. Cash tip income gets reported under Receipts on Schedule C the same as the 1099 income. But you are correct that you're caught between a 'rock and a hard place' in regard to previous year's tax reporting.

    PS I see that you are from NYC. Hopefully you were not working at one of the 60/40 clubs !
    Last edited by Melonie; 04-14-2005 at 06:53 AM.

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    Default Re: HELP!!! Taxes, deductions, house fees...

    Thank you for your responses. Got'em done *fingers crossed* !

    Yes, I am in fact in one of the 60/40 clubs... we're taking the latest ruling in stride, for us it's only one in a series of steps that we (the nyc industry as a whole) have been working on in the past 8 years... there're always appeals, it's not over yet, we'll see what happens in the end (if the end ever comes)

    -Vera

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