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Thread: Do i have to declare right now?

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    Veteran Member Emiliana's Avatar
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    Default Do i have to declare right now?

    So ive been dancing since 04 and i have not gotten anything from the irs...My mom said that since im still a dependent on her taxes i don't need to file anything more than a ez40 or whatever(worked at my school for like 15 hrs a week) also my club says they dont send info to the irs but they do have my social...im confused and i really dont want a bill cause i havent saved jack shit
    Thanks guys
    Emiliana



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    Veteran Member Emiliana's Avatar
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    Default Re: Do i have to declare right now?

    should also say that my mom doesnt know i dance(well she thinks i quit) she pays my school, apartment, gas, etc. The money in my checking account she deposits and i don't put any in there. So basically the only thing i spend my money on is work clothes, food and minor expenses..i also only dance on fri. and sat. and really never make more than 300-400? I have 2 more years til im out of college and i move away at which time i will of course start paying...but the question is...am i safe till then?
    Emiliana



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    God/dess Emily's Avatar
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    Default Re: Do i have to declare right now?

    The IRS will not send you anything....and if they do, you definitely don't want to see it
    (because it's an audit or a bill for past taxes plus penalties and interest....or worse.) You are probably thinking of a regular job, where at the end of the year they send you a W2 with all the information that your employer sent on your behalf. But....this is no regular job! You are expected to take care of that when taxes are due.

    I hate to say it, but you are in a bit of a mess. You have earned income that has not been reported to the IRS, therefore, you owe them money. If you plan on skipping out on paying the taxes you owe, you shouldn't be broadcasting exactly what you're not reporting!

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    Default Re: Do i have to declare right now?

    I don't want to delve into this too deeply, but technically speaking you'll have an earned income of something like $20,000 in dancing income for 2005. Technically speaking you should have been sending in estimated tax payments every three months which was/is due on this dancing income. Technically speaking, you'll probably owe something on the order of $4,000 in income taxes plus another $500+ in interest and penalties on this dancing income by next April 15th.

    Technically speaking, if you have received any educational grant money, student aid money etc., your eligibility for these grants is dependent on household income i.e. your own income plus your mother's income. The application forms for this grant money must list all household income sources. If your application forms were/will be submitted without including your dancing income, then the person(s) that signs the application form is/will be technically guilty of committing fraud against a government agency.

    In reality, if the club does not issue an IRS form 1099 with your SS# on it, the odds of the IRS discovering the existance of your unreported income is pretty miniscule. But the odds are not zero. There is something like 1 in 100 chance that your own or your mother's tax return will be picked for a random audit. There is probably a greater possibility that the club you work at will be investigated, either for taxes or for some unrelated reason, where the fact that a person with your social security number appears on the club schedule as a dancer could find its way into the hands of the IRS. By not declaring your dancing income, by not paying taxes on that income, and particularly by not listing your dancing income on student aid application forms, you are indeed taking a gamble.

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    Default Re: Do i have to declare right now?

    From what you said I assume you are an I/C

    To follow what Melonie is saying just because your club doesn't/didn't do 1099's for 2004 doesn't mean they won't start in 2005, if they do you will get that in Jan/Feb 2006.

    More an more clubs are going this way, some because the states (california) don't really give them a choice, a lot others because club owners are more in the way of corporate investors and even though they still deal in a lot of cash that they might choose not to report they are getting more and more via credit/debit card which they can not avoid reporting, there is to much of a paper trail. They are starting to realize that if they start 1099ing the girls they can drastically reduce this income by showing it as a payment to the dancers.

    An example: A club takes takes in a million via plastic in a year, rights off 500K to expenses drinks, utilities, rent ETC then sends out 1099's to 40 dancers for 10K each that leaves them paying taxes on 100K instead of 500K even if the rate they have is only 10% they have saved themselves 40K.

    The dancers can't really bitch because the club "in theory" is following the law even if the numbers, 10K per girl are totally pulled out of the air. it becomes a "well how much did you really make" situation.

    The student loan thing is dicey too

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    Banned Melonie's Avatar
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    Default Re: Do i have to declare right now?

    Agreed that clubs are definitely being advised to issue 1099's to dancers for the dancer's 'share' of private dance/VIP room sales, which allows the club to write this off as a business expense and to shift the tax burden from the club to the dancer. Having a 1099 show up in your mailbox in Jan/Feb can be a very nasty surprise if the dancer has not made estimated tax payments throughout the previous year to match the 1099 amount of reported income.

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