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Thread: new dancer and tax questions?

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    Member KahleighStar's Avatar
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    Default new dancer and tax questions?

    hi everyone, i would like to start dancing relatively soon and i had some questions about taxes and dancers that are in school and the like (i know little about doing taxes even after reading many of the threads on here! )
    ok, here's the situation. i am in school, my parents pay my rent & cell phone (even though my name is on the lease/bill--i have to pay them back after i graduate though), they also currently declare me on their taxes (and i do NOT want them knowing that i dance, which i think they would be if i made enough that i had to declare myself--they're very religious and would be extremely upset). how do i deal with this? will a club send a report of my money earned to the irs? i have no other bills other than living & school expenses (no credit cards, car payments, etc) but would like to dance b/c i've always wanted to and it should help with the costs of books, etc.
    i know this was probably really hard to follow but i dont even know where to begin with the money management aspect of dancing (besides save, save, save of course!). what are the basics i need to stay out of trouble with the irs and keeping my parents semi-clueless to the fact that their baby girl takes her clothes off for strangers ? i'd also prefer not to have a trail saying that i danced in college because of future chances of employment...but that's another board altogether.
    thanks so much for any help you can give,
    ~kahleigh~

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    Senior Member DanMorris95156's Avatar
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    Default Re: new dancer and tax questions?

    Hi Kahleigh -

    Well first of all congrats to thinking about these items before simply stepping onto the dance floor. I'll put in my 2 bits worth and I know that several others will help too.

    From a tax perspective and your parents - assuming you are a full-time student and under the age of 24 at the end of the tax year - regardless of your gross income your parents can claim your exemption. You will be required to file a tax return once your gross self-employment earnings exceed $400 (call that the first night or 2nd night) - you will be taxed on your net taxable income (many good tax pro's are out there to help and depending upon your location I can probably help you find one - my email is below).

    To increase your chances of retaining privacy - make sure that your mail is properly controlled,either get a PO Box since in college you might move and you won't want mail going "home". Also, you may have other taxable income that you currently receive from investments, etc. that you will need to track at tax time.

    From a tax perspective there are many good theads already but in essence you are able to deduct your costs associated with dancing from your gross earnings. So keep track of your dance outfits, supplies, make up, music, shoes, props, training, travel, business related meals/entertainment, etc. And plan on paying 1/3 or your earnings into the tax coffers - and you will need summarize your expenses and income so you can easily prepare your taxes. Plus you want to know how much you are making.

    Most likely, you will receive a form 1099 from the club(s) you are dancing. This doesn't leave a trail per se but is reported to the IRS. Your social security earnings will be reported from your tax return and these items are essentially secure and private.

    Estimated taxes are due quarterly (but the IRS idea of Quarterly means April, June, September and January {go figure}) so depending upon when you start dancing you will need to be prepared to pay some estimated taxes. Most likely not until January - BTW get a business or separate checking account for your dance money and keep your business receipts.

    This is just a start and I hope it helps.

    Kindest regards,

    Dan
    Daniel D. Morris, CPA
    [email protected]

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    Banned Melonie's Avatar
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    Default Re: new dancer and tax questions?

    Kahleign, there are also two other issues for student dancers to consider. #1 is student aid/grant applications, which must be filed based on 'household' income. This means that if you start dancing this fall, when you go to fill out student aid forms for the spring semester they must include dollar figures for both your parents' income plus your own income. Since the college's financial office is tied into the IRS data network to report the amount of tuition every student pays, as is TAP and other governmental student aid, there's no way you can 'forget' to add in your dancing income on the aid applications without eventually running afoul of the IRS when you file your own tax return next April. But adding in your own income to your parents income on the student aid form will undoubtedly prompt your parents to ask you where all of that income came from !

    #2 is filing status. Dan is correct that you can legally choose to allow your parents to continue to claim you as a dependent as long as you still meet the IRS qualifications for being a dependent. One of those requirements is that your parents must be providing more than half of your financial 'support'. If your parents' income is $100k a year and if you earn $20k a year dancing part time this is no big deal. However if your parents' income is $60k a year and if you earn $30k a year dancing, things can get dicey.

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