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Thread: tax stupid: need help

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    Veteran Member pipermarau's Avatar
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    Sad tax stupid: need help

    i have a bit of a problem goin on right now and i really would like some advice if any one has been through this or knows what to do.

    my problem is when i started dancing (it will be two years on the 8th of july) i asked the club owner how i pay taxes since i get paid on tips and i was told that i don't. they said the club claims us and we don't worry about it. i thought that was a little too easy, but he kept insisting that dancers just don't pay taxes. i was new and just let it slip out of my memory, and then about a year later while working at the penthouse club in dallas i asked the manager there how i payed taxes (thinking they did things differently) he too told me i don't pay taxes. at this point i'm tired of the run-around i've been getting and after reading some of this i've decided i've been mislead and i would love to buy a house in the next couple of years and i need to fix this. i don't want to do any jail time but i'm afraid i might for negleting my taxes for two years. i admit i probably could have done more to solve this but after being reassured by two different clubs about taxes i didn't worry about it. i need to know who i would contact for this and what i am going to have to go through to pay up on my last two years of taxes. i have not had any phone calls or anything but i've been paying everything through money orders and cash, i don't have a bank account any more, and most of my banking info (actaully all of it) was lost due to an unfortunate situation.

    i have to solve this problem and i don't even know where to start. i appreciate your time reading this and any advice you can give. i'm just scared and feeling so dumb for not looking into this sooner. i have never received any tax forms from any clubs i've worked in before, and i have no way to prove what i've purchased before july 2005 (all of that was lost with my banking information, a very long story) again thank you for your time, every one.

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    Banned Melonie's Avatar
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    Default Re: tax stupid: need help

    A ton of past discussions can be called up by using the 'search function' with search keywords taxes , IRS etc. A good beginning point might be ...



    from a procedural standpoint, the first thing you'll have to do - even before you can file anything in regard to taxes - is to account for how much money you actually earned in past years. If you didn't keep any personal financial records, one method available is to 'reconstruct' your income based on your spending. If you go back to your bank statements, you can see how much money you deposited every month. You can also estimate how much money you spent on rent, food, car payments etc. every month. This 'reconstruction' method is exactly what the IRS would do if it were to ever audit you and find that you had no tax returns on file.

    Once you have 'reconstructed' your monthly income over the past couple of years, you'll then need to move forward to filling out tax returns. You'll need to use form 1040 plus Schedule C 'profit or loss from a business'. You'll also need to figure penalties for failure to pay estimated taxes on time etc.

    I would highly recommend going to an accountant if are this far 'behind' on taxes. While it's not impossible for you to do this yourself, the issue is made more complicated because 'past years' tax software is no longer actively being sold as a 'new' product. Also be aware that by the time penalties and interest are added, between a say 20% fed income tax plus a 15% self-employment (= Social security + medicare) tax plus penalties and interest, you're probably going to owe some 45% of your income from the past two years to the IRS in the form of back taxes. If you typically earned $1000 a week for example, we're talking about cutting the IRS a check for $40,000 to square up two years of back taxes. If there's any bright spot it's that Texas does not have any state or local income taxes !

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    Veteran Member pipermarau's Avatar
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    Default Re: tax stupid: need help

    thanks for your advice. i'm kinda scared now..for a while i was only making $500 a week, and i have lost all my information that came before june of last year. the year before is lost to a place i can't get to again. i'll start checking the area for accountants that can help me with this and again, thank you. i've been pretty lost on all of this.

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