These questions may have been posted before so I appologize ahead of time if I skipped over them:

1) In Minnesota if a bank account has deposits of $10,000 or more a YEAR isn't someone called or notified? I forgot the name of the agency.

2) Taxes-How do I tax this? I could say I'm an independent stripper or massage therapist, but how do I file this? Also, I'm 18 and listed as a dependent on my parents tax forms. If I decide to put down stripper, wouldn't they find out or do I switch to dependent?

I need to deposit money in my bank account to pay off my credit card that's mainly used to book hotels and buy school things.


Any help would be great!!

Thank you,
Anya

Edited by mod to protect the naive.

-- Modified on 8/2/2009 6:30:15 PM

1) The IRS

2) You are classified as an independent contractor. If you want to play by the rules, you should make quarterly estimate tax payments
Web site designer always works or party planner.

3) Establishing income will help you down the road if you want to purchase a car or buy a house. I have a fav who pays taxes and has both.

4) If you have a provider friend ask her if she uses an accountant.

5) I am not a CPA

1) In Minnesota if a bank account has deposits of $10,000 or more a YEAR isn't someone called or notified? I forgot the name of the agency.

I believe it is single deposits of more than 10,000 not the yearly total but I could be wrong.  I also have heard that, post 911, large cash deposits of any amount are sometimes reported as well.

2) Taxes-How do I tax this? I could say I'm an independent stripper or massage therapist, but how do I file this? Also, I'm 18 and listed as a dependent on my parents tax forms. If I decide to put down stripper, wouldn't they find out or do I switch to dependent?

List yourself as an entertainer if you want to use the exotic dancer cover. Almost any consulting title will do. I would avoid massage therapist as in most cases you need to be licensed.

You should probably consider getting advice from an accountant or from other ladies in your position. In any event, dancing, for example, is a perfectly legal and legitimate cash business.  If you are filling tax returns and doing things on the up and up you really don't need to worry about the cash deposits to your bank account.

I will contact a provider and look into an accountant to help me.

My parents think I work for a catering buisness and nanny.

One thing to be careful of - listing yourself as a consultant of any kind greatly increases your chance of being audited, so you may want to avoid that. Entertainer works perfectly fine.

That way your parents won't wonder why you didn't put that down.

My nanny gets lots of cash, and pays taxes.

I think most people deposit more than $10,000 a year.  It probably is true if you deposit it at one time.  But you are doing the right thing by reporting something to the IRS.  Less headaches in the long run.

1.) Most banks have pamphlets or signs placed inside the bank listing the federal and state laws regarding maximum deposits and withdrawals without special procedures. If the info isn't posted, it'll be in the documents you were provided when you opened an account and most likely on their website if they have one.

BE CAREFUL WHEN DEPOSITING CASH. If you deposit a disproportionate number of small or large bills (all 100's or all 1's & 5's), a large number of old bills (pre big-head design), large and similar amounts on a regular basis, or a lot of consecutively numbered bills you will raise questions. Also, banks are regularly audited by state and federal bean counters. If someone sees a pattern, they're likely to report it to one agency or another, whether it be the IRS, Homeland Security, the DEA, or any other combination of alphabet soup. I'm not just being paranoid; I make my living buying and selling collectibles and bullion, a mostly cash business; I've run into all of the people I mentioned and others. One thing that helps is to be friendly with your bank tellers and managers. Sitting at a desk all day can be boring; don't be the person that lets them make a phonecall or send an e-mail to an authority for some excitement (yes, some people ARE that petty).

2.) I'm not an expert on taxes by any means, but I will add one thing you need to avoid:  listing anything that sounds like you should be collecting sales tax. Depending on where you live, you could have local, county, and sales tax and/or excise taxes depending on what you sell. You don't want to avoid vice and the IRS only to be pinched for failing to collect and report sales tax.

3.) As the youngest of eight, never assume you're parents don't know (as brought up earlier). You are the puzzle and they the puzzlers; it's their job and biological drive to make sure all the pieces fit together properly. When you lead a double life, you're painting a different picture on the back of the puzzle. Eventually, there will be too many pieces that don't fit and someone will flip them all over and figure it out.

Tread lightly.

that has the ring of truth to it.  It could be food service, computer work, book keeping...  any legit work from home employment.  One Fav has such a legit business...  by appointment only...  from her home office.  Now she lives simply, is pretty UTR, provides as a supplement...  and has done so for several years.  
I park in the client space.  When I enter, I lock the door (as previously instructed) & we ajourn into her private space.

I suggest you do think up an "occupation" since you really should begin paying some taxes.  Any tax service should be able to do the forms but you want one that you'll be comfortable with & not get the third degree.  Advise on what to write off & what not could be a help.  
If you have accounts in your name, it will show up if you get ANY finicial aid for school.  They expect that 100% of your assets are available to pay for your school costs.  (They use the name & SS# listed first on the account.)  Yes, they will find them!
There is great risk in having another person listed first.  I sold some of my stuff during my divorce to raise cash...  when my best buddy was hospitalized, they siezed the account for the bill he could not pay.  I lost several thousand.  
You should take over some of your own bill paying.  Taking money to your parents to go through their checking account only raises questions.  Certainly, if you habitually put X amount through them, you might want to continue, or have your Dad help ytou set up your own account & then you keep it private!
Federal Banking law requires cash transactions over a $10,000 get reported to the IRS...  not only a single transaction but "related transactions" (like paying cash for a car in a series of transactions which add up to more than $10,000).  But any SINGLE $10,000+ transaction will trigger this automatically & bank software will spot it.  
If you have a cash reciepts business, just don't let the cash accumulate to large sums.    

The banks, just like car dealers have to report transactions over $10,000.  You can deposit whatever you want in your account when it is less than that.  However, if you have no visible means of support and start earning interest on income that doesn't make sense you are a target of the IRS.  I say keep a nominal amount in your account and also get a safety deposit box at the same bank.  Keep your stash there and pay your bills via money orders.  It's just like having a hobby phone.  No record anywhere if it's prepaid with cash.

A good idea if amounts reasonable.  I had a legit business & a customer with a cash business used to ALWAYS pay their bill with money orders, each one on a different convenience store or gas station.  
skb

I don't have either...so that's not a problem.

I've had a bank account at the same town bank for 12 years. Either way they'd be suspicious of me dropping a few thousand in there.

I will contact a local accountant and claim I'm a nanny...which is partially true. I nanny 2-3 days a week and since I'm 18 my family agrees I should start taxing some of that.

Thank you for all your help, I really appreciate it!

I hope you caught on to that, if not...think about it

1. Take a look a your Form 1040 right above where you sign. Did you see that statement about “I affirm under penalties of perjury that the statements are true to the best of my information and belief?”

    Now look at your website where you describe yourself as a “companion” and re-ask your question as to how you should designate your occupation on your 1040 form. There is nothing illegal about being an adult companion so long as you do not violate the law by engaging in illegal conduct.

      But it is a felony if you lie about your occupation to the IRS.


       2. Under the Bank Secrecy Act, every non-casino financial institution must, subject to certain exceptions, file a report with the Treasury Dept. of each deposit, withdrawal, exchange of currency or other payment or transfer, which involves a transaction in currency of more than $10,000.

     But that’s just the beginning. Your bank also must, subject to certain exceptions,  file a report of any suspicious transaction if it involves or aggregates at least $5,000 in funds or other assets, and the bank knows, suspects, or has reason to suspect that the transaction involves funds derived from illegal activities.

    A young lady who continually makes cash deposits of $1000 to $5000 at a time just might make the bank suspicious. This is one reason why you must carefully report ALL cash income to the IRS. So the posters who focus on the $10,000 reporting requirement are not being very helpful.

      I think the Patriot Act imposes additional reporting requirements but I’m not familiar with those.

Don’t trade a misdemeanor for a felony. Don’t mess with the IRS.

But, if I nanny...it would be legit.

marikod speaks the truth.

First, I think providers need to educate themselves on bank reporting requirements.  I would wikipedia the following (some of these may not show up, but if you wikipedia all of them you and read what does show up you will get a feel for the rules/laws):

Structuring

Smurfing

Bank Secrecy Act

Currency Transaction Report

Suspicious Activity Report

Monetary Instrument Log - (for those who get clever and utilize cashiers checks, money orders, travellers checks etc.)

Anti-money laundering software - (tellers ight suspect nothing and not file a SAR - but the software is looking at everything too, and no dazzling smile fools it)

Anti-money laundering

Know Your Customer - more automated ways to check on customes and file SARs.

Money Laundering

Patriot Act

Money Laundering Control Act

Cliff notes: banks are on the watch for cash deposits (cash nad/or cash equivalents) as low as $3,000.  Banks are on the watch for deposits under $3,000 that aggregate over $3,000.

it is fine to book hotels with a credit card but you may want to pay cash at checkout.

I don't recall the exact amount, but businesses have to report you if you pay cash AND the total payments from you in a year-long period exceed a certain amount (probably $10,000).

You should certainly acquire a safety deposit box.  You should also consider storing a small amount of cash elsewhere, not in your residence, not in your car, not in your safety deposit box, and maybe not in a local area storage facility, should you ever be busted.  Safety deposit boxes have SSN's associated with them and could possibly be seized, and you could find yourself with no money for lawyers.  I advise that you keep this small amount of cash in a mix so that it is not predominantly 100's - some or many lawyers may decline representation if you are accused of obtaining money through an illegal activity and then want to pay them in all 100's.

Not reporting your income (yes, even illegal income) is a crime.  Underreporting your illegal income are multiple crimes.  Underreporting your illegal income and making further false representations as to your occupation, etc., constitutes even more crimes.

really should have some basis in fact.  NO, I'd not recommend "Provider"!  But, entertainer, hostess...  something that could be stretched to include these activities.  

I used to do hand work at home as a side line...  several skilled trades...  the modest income was lumped together by my accountant as "craft work".
skb

Not a felony to embellish up your occupation.  Irs doesnt care about your Occ.  I mean for christ sake its like putting the wrong date on the return.  Theyre not going to put you in the slammer for a minor misrepresentation.
Just dont under report income.  Thats the felony part and usually you have to have a substantial misrepresentation (threshold amount anyone)to be charged with felony tax evasion.  
Not only will you be on the up and up with the Irs if you file returns.  You will also begin funding soc security (somebodys gotta pay my retirement benenfits) and be eligible for disability benefits if youre hurt and cant work.

Another thing, you can call yourself an escort and or massage therapist.  Nothing wrong with that. Youll probably be the highest paid--and hottest-- nanny in the state. Love your website.

I have been in practice in the tax area for more than 15 years.  Shoot me a PM and I would be more than happy to answer any of your questions and give you some advice on how to best report your income on your return.

-AC

i concur with achagall,(not a cpa), as many financial institutions report transactions of. 3000.00. in my,( unqualified0, opinion it's nonsensical to deposit any liquid,(curency, mo etc.), into a public financial institution through which a paper trail can be followed.

You really are a great Nanny!

Big mistake, unless you are actually certified as a massage therapist.  I can't believe someone actually said that.

Swim

Just as a precaution do not make any single deposits of $5000 or more.  

Also make sure you do keep your taxes in order.
You will need to make quarterly payments on your earnings to the government.

Its good advice to call the bank to find out their policy.  Its not a crime to call and ask questions, and you should not have to give your name.

You are not required to list your occupation on your 1040.  

You do have to claim any income no matter what the source.

fitness consultant and personal trainer - the IRS does not really care for the details if you report all your income.  

The comments on bank accounts are correct, make many smaller deposits. You web site indicates that you tour, so just open an account with a national or large regional bank with widespread branches, make you deposits while touring so the hometown locals don't notice anything (or do deposits via the ATM after hours).

You can pay your credit card bill via  a money order - sold for cash at the Post office.

Independent contractors ARE required to list their industry on their Schedule C, which she will be filing.

You are a full time college student.  Your services are ancillary to your main occupation which is student.

-- Modified on 8/5/2009 2:12:14 PM

Occupation is asked on the 1040 form.  Schedule C asks for your principal business or profession.  Whereas, she can answer any number of ways - Independent artist, Personal Service, etc....

I would list my income on a schedule C as either a consultant (professional activity code)812990 or an entertainer code (p.a.c.)711510. Be very careful of your deductions, you don't want to raise red flags. Your parents can no longer claim you as a dependant if you are depositing $ in a bank (unless you deposit less than the standard deduction for single which is $5450 the entire tax year and you are a full-time student) If you keep everything cash, no prob with the deduction/parents claiming you as dependant. Otherwise, pay your taxes quarterly based on your deposits to the bank less reasonable expenses (not including nails, hair, spa, wardrobe, etc) Travel may be deductible, hotel stays more than 50 miles from domicile, and food but see the link for specifics...Realistically, though, SE tax is unavoidable...

If you would like to contact me privately, I can help you individually...free consultation..why not? Anyway, my email is [email protected]

You can put down that you are a personal assistant.  That way, if your parents ask a nanny would seem to fit in that category and for whatever else you do or dont do I think it very clearly is personal assisting.  I havent seemed to have had any problems with it.

Anya,

Be very honest.  I don't want you to end up like Tricia Oaks.