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Thread: taxes and savings

  1. #1
    Veteran Member rain's Avatar
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    Default taxes and savings

    When I first started dancing, I didn't think I would do it for long. Now I like it, and I'm considering doing it for the next 4-5 years. I want my finances to be completely straight to avoid any complications in the future.

    This is what I think I need to do:
    - keep a journal of income for each day/night
    - keep and organize receipts for things I spend on dancing (outfits, makeup, etc.) Are these all deductible? I'm sure there's another thread on this...thanks for your patience with a newbie, ladies.
    - find a stripper-friendly accountant to help me file taxes four times a year as an independent contractor. Anyone know one in Portland?

    Before I go see an accountant for the first time, I want to print out all my bank records from the time I was dancing this summer.

    Is it OK if I start all this now even though I didn't do any of this four months ago? Should I try to estimate my income that I've already made in those four months and pay taxes on it, even though I have no "nightly records?"

    Is there anything else I'm not thinking of?

    Thank you.

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    Banned Melonie's Avatar
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    Default Re: taxes and savings

    Well, by the IRS code, you are supposed to be accounting for and reporting your income from when you first started earning money, and paying estimated taxes quarterly. To do this properly, you'll obviously need to keep a 'set of books' recording your nightly earnings and legitimate business expenses.

    As to getting 'set up', it's probably a very worthwhile effort to hook up with an accountant who specializes in independent contractor businesses to help you understand the right/best way to structure things given your own personal financial situation. However, this is not absolutely necessary, since programs like TurboTax for Home and Business do include everything you need to do it all yourself.

    As to the deductibility of particular items, there are a great many threads in Dollar Den discussing these issues. You'll find the SEARCH function quite helpful in bringing these threads back up.

  3. #3
    God/dess montythegeek's Avatar
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    Default Re: taxes and savings

    You need an accountant to get you organized and file your first year return----abd explain it to you. As for filing estimated taxes you do not have to have an accountant. the form is not complicated. Other than knowing the right stuff to claim, the accountant is not doing a lot more than collecting a fee for you not being organized.

    Apologies to Dan, but a lot of what accountants do is get paid for folks not doing it themselves because they are lazy and/or their time is worth more to them than their money. This could be true for some dancers but not more than a fith of them. I might add that the vey high-value service accountant do is know all the rules and keep you on track. Have the pro do it the first or first two times so it is done right, then learn it yourself and use the pro for the tricky stuff. By all means use the pro to get started on the right foot, and maybe once a year for the yearend filing. Learn from them how to do it yourself and ask questions. The accountant will enjoy working for you more than "Here is my shoebox, make sense of it".

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    Senior Member DanMorris95156's Avatar
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    Default Re: taxes and savings

    Monty -

    No apologies necessarry. I look at my role as an that of an advisor - assisting my customers achieve success - both financial and non-financial. Taxes are part of that - and I have frequently suggested people prepare their own returns and have me review them if requested and/or compare their returns to say a tax projection previously prepared.

    From a value perspective, you are absolutely correct. People hire accountants and almost anyother type of advisor because the exchange for adivce/sleep/convenience is greater then the value of the money. Same with customers of dancers. The value received exceeds the money provided.

    The clerical aspect of preparing a tax return is fairly straight forward - kind of like driving on an interestate freeway. Leave the main road - and the value of experience combined with judgement increases - in the world of tax avoidance there is the world of the squeaky clean on one extreme and "go to jail" on the other with vast amounts of "grey" in-between. As taxpayer's move from the conservative to the agressive, the value of leveraging an advisor increases.

    I look at servicing customers in a holistic manner - helping them clarify their goals and objectives. Mere tax returns aren't very exciting - but helping people improve their lives, removing fear and pain, seeing them smile and helping them sleep at night - those are my motivating factors.

    Regarding Turbo Tax - it is a great product - but it has its weaknesses (I use to review it for a very popular PC magazine and one of my divisions uses its professional product - training is advised for a novice user) I also like Quicken (great for dancers in that it is easy, inexpensive and tracks revenes and expenses with customized categories)

    Hope this helps -

    Regards,

    Dan
    Daniel D. Morris, CPA
    [email protected]

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