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Thread: Employee or Independent?

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    Senior Member shesupsidedown's Avatar
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    Default Employee or Independent?

    I am preparing to do my taxes myself this year and I am quite confused about one thing....
    Am I a independent contractor or an employee?
    I have read documents about what it takes to be classified as an employee in this business and it certainly sounds like I am one.
    I am not free to make my own schedule, I can not come and go as I please, and I pay no house fees except for 10% tip out to the bar...so why should I file as self-employed, which increases my tax burden?
    I hardly have any deductions based on the housewife test and simply because I keep my expenses very low....so isnt the main benefit of filing a schedule C for the deductions?
    If I was going to deduct anything it would be my tip-out...and I wouldnt even know how to go about doing that!
    Someone help!
    How do you file as an employee without a W-2??
    Or did I just ask the dumbest question in the world!?!!
    I have often thought that if a rational Fascist dictatorship were to exist, then it would choose the American system.
    -Noam Chomsky

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    Default Re: Employee or Independent?

    see the form I filed under IRS... Fill that out and you will get your anwser,,,

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    God/dess Emily's Avatar
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    Default Re: Employee or Independent?

    you've touched on the juxtaposition of being a stripper

    you are classified as an IC for the IRS, but you are treated like an employee by your club.

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    Default Re: Employee or Independent?

    Yup, that's the thing; you could try to file as an employee, but the club certainly hasn't paid your taxes because a) they don't pay you and b) they aren't withholding for taxes from your tips.

    Soooo if you tried to do so and someone at the IRS got interested enough, it could lead to a whole new batch of consequences I don't really want to think about right now. At this time I would rather pay my SE taxes than have the club keep more of my money, which they would definitely do if we became employees officially.

    This is a huge complicated issue and frankly, I'm thoroughly amazed that the IRS hasn't become more involved. Though I guess they aren't exactly breathing down the necks of fine dining waiters, sommeliers, concierges, chauffers and the like, all of whom derive a significant portion of their income from tips. Certainly when I had my last waitressing job I don't remember there being a completely honest accounting of tips.

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    Senior Member shesupsidedown's Avatar
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    Default Re: Employee or Independent?

    Trainfinder 22...I did look over the form...
    Now do I fill that out and send it to the IRS and then they would decide whether I was an employee thus getting my place of employment involved?
    ugh.
    I love where I work...and I love the people I work for...so if that is the case maybe I should just stick to the schedule C....

    Yes, Emily...this sucks. We are, in many cases, employees. Of course without the benefits and the stable pay. Yet, we are expected to file and pay taxes as self-employed....which means technically filing quarterly and paying more taxes than an employee.
    yuck.
    I have often thought that if a rational Fascist dictatorship were to exist, then it would choose the American system.
    -Noam Chomsky

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    God/dess Emily's Avatar
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    Default Re: Employee or Independent?

    it does suck, because we pay taxes, but I imagine the majority of strippers like it this way

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    Default Re: Employee or Independent?

    Quote Originally Posted by shesupsidedown
    I love where I work...and I love the people I work for...so if that is the case maybe I should just stick to the schedule C....
    You work at Mary's, right? Definitely don't get them involved as a test case--I don't think they would make it, and a landmark like that is one of the reasons I love Portland so much!

    Now, if you worked at a big chain club or one you hated, it might be different.

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    Banned Melonie's Avatar
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    Default Re: Employee or Independent?

    this is actually some 'serious s#!t" for any club involved in an IRS investigation. If a club is alleged to treat dancers as employees, not only does this mean accounting of individual dancer incomes with tax withholding and W2 reporting, plus paying 7.6% employer's share of SSI / medicaid taxes at the federal level, but it also means paying workmen's comp and unemploment insurance premiums based on individual dancer incomes at the state level.

    So far to the best of my knowledge there hasn't been any concerted effort yet by the IRS aimed at the exotic dancing industry. However there is certainly a great deal of attention being paid to 'corporate club chains' DejaVu and SCORES individually. Trying to formulate an idea of what 'might' happen ...

    two years ago the IRS did make a concerted effort in the casino industry, where it was alleged that dealers and waitstaff were essentially independent contractors. The IRS managed to leverage their way into the casino industry by offering a settlement to the casino owners ... in exchange for the IRS not auditing the casinos' finances, the casino owners agreed to begin treating dealers and waitstaff as 'tipped' employees. As a result, all tips received by casino dealers and waitstaff must now be pooled and paid out in equal shares, with total income (shared tips plus hourly base pay) reported and taxes withheld.

    On the plus side, casinos were required to pay the states for unemployment and workmen's comp for their dealers and waitstaff, as well as required to follow state labor laws regarding employees. However, this latter requirement can run counter to the well-being of the industry, such that the Bellagio set the precedent of taking pictures of their waitstaff and dealers and making an employment contract which allows for firing if an employee's appearance and/or weight deviates from the initial picture and weight at time of hiring.

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    Senior Member shesupsidedown's Avatar
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    Default Re: Employee or Independent?

    Wow.
    So either way you look at it...there is a negative or a positive.
    I think I will remain happy as a independent contractor.
    Simply because I would NEVER dream of involving my club!!! I love, LOVE Marys...hands down the best club I have ever worked at...we get christmas gifts for christs sake! I was ignorant to the fact that in order to detrimine employee status, the workplace would be investigated.
    And, well, there is a plus to being the only one accountable for your own finances....no tip sharing , contracts, sick days, scheduled vacations...etc.
    my question is answered.
    As naive as it was.
    I have often thought that if a rational Fascist dictatorship were to exist, then it would choose the American system.
    -Noam Chomsky

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