OK I need help...... How do I do my taxes if I'm a provider and obviously dont have a paystub? I need major help lol
I'm not an accountant and I don't have the forms in front of me so don't take this LITERALLY but..
Its easy.... if all you want to do is pay taxes on a certain amount of cash income, there is a block on the 1040 for 'Other Income' (something like that) Put down your cash income there and it will be included in your Gross Income. This is the same place waiters etc are SUPPOSED to list their tips etc.
You COULD fill out a whole Schedule C for your 'business' as an 'entertainer' listing all your income then also list all the business expenses you can deduct from that income. For instance, you fly to Vegas to work during a convention, your air travel, hotel, rental car, meals are all deductable business expenses and listed under Business Travel. Back home, if you are keeping a separate apartment/hotel for incall, the rent, utilities, insurance etc on that would be legitimate deductions under Schedule C. Items such as clothing, makeup, salons, etc might not qualify as deductions but you could get different opinions on that. HAVE RECEIPTS for anything you deduct. You end up paying taxes on the net profit from this 'business'.
Just remember to keep your return reasonable to avoid an audit. Also if you ever did come up on the IRS 'radar' and they started looking at your lifestyle and assets compared to the $12,000 a year you are paying taxes on, you COULD get in trouble - thats how they got Al Capone essentially. Its not likely though and filing a return and volunteering to pay the taxes on cash income that could be hidden should be rewarded, not questioned by the IRS (opinion thrown in).
MVR
Don't forget that you will owe ALL tax on whatever you do report and will have to write a check to the IRS for what is due. Also, come to think of it, if you start doing Schedule C stuff, you will be obliged to pay taxes quarterly each year and may well pay a penalty for not having done so for the tax year (2008) you are filing.
Unfortunately, I have to disagree with some of vonrichtofen's advice.
Putting all of your self-employment income on the "other income" line of Form 1040 sounds easy, and if you really pay ALL of your tax liability by doing that way you probably won't get in any trouble. But using the "other income" line fails to call to your attention your likely liability for Self-Employment Tax, that is, Social Security Tax on your income from self-employment.
The right way to do it, I think, is to put your self-employment income on Schedule C or, if your deductible expenses are $5000 or less, on the simplified version called Schedule C-EZ. The bottom line on Schedule C or Schedule C-EZ will tell you how much you have to put on Schedule SE in order to meet your obligation to pay Self-Employment Tax.
What vonrichtofen said about deductible expenses was basically right, I think. There is also a thread about half way down this page (TaylerLakeFL was the OP) with some additional info about deductions.
Good luck on your taxes.
(not a tax lawyer and not a CPA)
Good advise so far... Before you start, think of some name to give like "Entertainer", "Event Coordinator".
Once you have a name for your occupation, I'd suggest going to a tax professional who will know what you can deduct & what you can not. Just keep a straight face & not let him/her read between the lines.
Besides INCOME, there's self employment, SS, TDI?? lots a taxes.
if you do not want to incur the expense and annoying questions from a tax professional is to use Turbo Tax Home and Business with Schedule C.
You are self employed and therefore must pay both estimated tax and self employment tax which typically is more than your income tax because you can only offset business deductions and you presumably would not have many of those in this business. And you need to do this now bc the first estimated tax for 2009 will be due April 15 and you will be penalized if you do not pay.
Turbo Tax will walk you thru the process painlessly and even file your return for you.
I'm amazed at how often gents underestimate the expense of running this business. Every penny paid for advertising, if you have a fixed incall rent and utilities, hotels, flights, mileage, snacks for the guests... etc.
She needs to get a tax adviser. They do not ask annoying questions, (and if they do, find another!) they ask the questions needed to determine what your best tax strategy is.
Since it is very near tax deadline time, they can also file an extension for this young lady.
It really is very very simple to do yourself unless you have major fixed asset expenses etc. However, for someone used to a 1040-EZ it's good to have a professional help you out the first year or two until you get the swing of things.
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-- Modified on 4/7/2009 8:16:21 PM
Don't you have to have a tax exempt number to be considered a business though?
RE: Tax number
No you do not need an Federal ID number if you do not have employees just your social security number is all that is needed including on Sch C
The penalty for not making estimate payments is quite low - 6% as I recall on the underpayment so some folks just pay up at the end of the year.
If income after expenses is relatively low or you have high intimized deductions you may wind up paying more in Self Employment Tax (same as social security) than in income tax.
That is why "other income" doesn't work as someone else pointed out. That is a red flag to look for SE tax not paid.
I feel weird about going to a tax advisor, do I tell him I'm an adult entertainer off the books? I'm so sorry for all the questions, 1st time + clueless
All you need is a business license to get going. I sent you more info in my PM. Choose your license by what makes the most sense for you. (Consider privately asking other ladies that you know what classification they use, it might give you some good ideas!) Then simply tell the accountant what your title is. (Ex. "I'm an adult entertainer." "I'm a meditation and relaxation specialist." "I'm a sex educator." Etc.)
Your deductions will need to be in line with the work you are doing. Unless you have an adult entertainer license you will not likely be writing off lingerie, covers, lube and toys. (Please note: many ladies refuse to get this specific license for good reason.)
Check out the link I sent you, look up the information for your own state, county and city... feel free to pm me again if you'd like... and then consult with an accountant! If you don't do this within the next week try to use the IRS link I sent to file a tax extension so that you are not subject to penalties and fees for late filing.
: )
In addition to all the federal tax stuff, don't forget that in most places you have to file a state tax return, too. And, like the feds, most states require you to pay quarterly estimated taxes if your income is not subject to withholding.
I live in the Hartford area and work at H&R Block. Next year I could do your taxes for $20 at the special friends and family rate.
I have done taxes for a woman who did lingerie and sex toy parties. She had a lot of deductions for batteries. I agree with the others that told you to use a schedule C, keep your deductions minimal to avoid IRS scrutiny and declare an income that reasonably reflects your lifestyle and assets
You can declare your occupation as entertainer.
This is not a stupid question at all.
I have a Favorite lady who has a ligit business... works from an attached "home office" & does business by appointment. She's low volume & client traffic blends easily with her other business. I imagine she could get away with "other income" designation.
If providing is your primary source of income, you need to get a tax plan set up. I expect the hardest part is just getting the plan & the first tax cycle.
You can't have money appear from nowhere...
Some good information on these posts, but let's try to sort things out:
1. You must definitely file a federal and state return and report your income.
2. You should report the business income on Schedule C, as has been stated.
3. The name of your business or occupation is up to you. It can be "personal assistant" "trainer" "therapist" or whatever you choose (within reason).
4. All expenses related to your work can be deducted, hotels, mileage, advertising, batteries, etc.
5. You better report all income that has run through a bank account. The deposits is a way to calculate income.
6. If your monthly living expenses are 5,000 and you report annual income of $10,000 before deductions, then you are at risk of the so-called "lifestyle audit". This is when the IRS basically asks how can you afford your living expenses if you have no money coming in. A porn star went to jail last month due to this kind of audit.
Finally, the quarterly payments can be a blessing in disguise, since you pay the taxes along the way rather than all at once!
I am a tax attorney and am happy to answer questions. Good luck and I can't wait until April 16th!
so what if i have no idea how much i make???? im freaking out lolol
The same way other people who do not have records.
They use some estimation procedure.
You come up with some estimate of the number of appointments you have. Then you estimate the average cost paid and this will give you your gross income. For example, someone saw about 5 people a week and charged $200, then the estimate would be $1000 per week. $50,000 per year.
I'm not sure keeping written records is a good idea in case you were ever busted, but come up with some system like putting a penny in a jar where each penny represents $100. In addition to having some record of your income for taxes, you will have a better idea of your financial situation.