In a business such as yours, how do you go about reporting income for tax purposes?

do you expect any other response?

A business is a business, the same way you do

GG - many providers also have other businesses or professional endeavors outside of the hobby.  Clearly that is what they use for tax purposes.

from those that don't file do you?

I've never seen a study, but I would suspect the percentage of tax paying escorts would be similar to the number of any other UTR, cash only enterprises. Probably a rather low number, especially amongst the younger providers.

I don't imagine this will be a popular answer, epecially among the provider that actually do file. Ladies, light your flamethrowers. I'm ready. lol

On a Schedule C, just like any other proprietorship, I would assume, so they can deduct legitimate business expenses and provide a record of income for credit purposes.  Some providers own their own homes, have investments, put money aside for retirement, and the like, just like the corner grocer.

I'm a "consultant" and am looking forward to doing my taxes this year (ok, well maybe "looking forward" is a little much, but I am quite proud to do them when it would be easier not to). It just means that I can start investing this year without having the IRS breathing down my neck. *Le Gasp! A provider who invests?! What is the world coming to?*  

(And yeah, I know there's some truth to your generalizations, GB and GG. Just remember that not all of us are like that, and while you can generalize, you can never assume that one of us individually is or isn't).

-- Modified on 1/11/2008 9:34:13 AM

So it was, LOL. Then you're right, of course.

-- Modified on 1/11/2008 11:03:43 AM

wise move.

-- Modified on 1/11/2008 6:29:50 PM

And you should edit yours when she does, so your not saying it either.

b-

Since this is up my alley, I thought I would throw my two cents into the ring.

All income earned from sources worldwide are taxable to US citizens, whether the income is earned under legal or other means.  Not suggesting by any means this thread is discussing illegal income.

Example, if you embezzle $100,000 you are required under tax laws to report that $100,000 as income.  Which is the nice frosting on the cake after you are found guilty of embezzlement you get that little examination notice from the IRS.

The nice thing is when you claim that income, you can just call it "other income" and not rat yourself out.

Two things to note:

1.  Even if one were to partake in an illegal venture there is substantial case law allowing for  the write-off of expenses.  So, do track all your expenses.  Even so, I would avoid issuing 1099s to your schedulers.

2.  Thoughts on the underground cash society.  The beauty of cash is as long as that money never gets deposited into some bank account it is virtually un-tracable.

However, the IRS does have one defense and that is the "lifestlye audit"  If they find someone in the $1,000,000 home, driving the Mercedes and look at their tax returns and see them reporting $75,000 a year, well the little Red Flag starts to wave.

So do consider reporting your income and remember the motto: Pigs get Fat, Hogs get Slaughtered.



The good news is you don't have

Here is how I do it....

I have a regular job that I have to claim taxes from so that there is no suspicion as to how I am raising my child and accumulating such high revenue in my various checking accounts.

 I send 15% of ALL my income to the church or other charities which is a tax deduction. In addition, I claim minimum wage from my total, provider income as an "additional support fee" from my ex husband.

Having a personal CPA who is a client does not hurt either!  I pay quarterly taxes as opposed to one big fee at the end of the year and my Accountant has a way of finding many deductions such as hotel and travel fees, that are a business expense.  I think there is even a way to add your condom, lotion, and douche as an expense.LOL!

When I paid cash for my car, I had my parents deposit various checks into their account and then write me out a check for the total of the car. It just appeared as if Daddy bought his little girl a Benz.  

Bottom line, if you are giving Uncle Sam more than enough and you can account for your income, they are satisfied.

Private dancer entertainer. The tax people aren't suppose to ask details and if they do my reply is that I Would rather not discuss that with them or anyone.

I have bills to be accounted for like a mortgage, auto loan, credit cards, etc.
My money doesn't go to drugs or other useless things nor do I commit tax evasion. This is a business I treat it as such. So that the next piece of property I want to buy I'll be able to.

-- Modified on 1/11/2008 12:01:43 PM

I am a student and pay my taxes, but I always get a nice refund back every year because I'm in school. I use this for Spring Break. I file early- January 1st my taxes are done and sent to the IRS. It helps to be on top of the ball.

Katie

Are you on drugs??? This is exactly the attitude the responsible providers here are trying to dispel.

If, and I repeat IF you are going to be part of society, by which I mean, buy a house, invest for your future, start an IRA. You'd better learn that whether you'd "like" to discuss your finances with the IRS or not, you're in for a rude surprise.

you are not the irs..

LOL haha im joking im joking.
i report every single dime i swear and may lightning strike my ass if im lying.

i also keep all my reciepts, especially the ones for titanium panties cuz they very expensive.

and taken.

All share a common factor: it's none of your f'in business. I've seen these threads before and they without exception always devolve into comments like, "Even if they're not paying, they won't tell you that." Mind your own P's and Q's and we'll mind ours. Mrfisher, as usual, put it most succintly. What are we? Collective idiots? -e

Best answer I've heard so far. lol

I too, have never taken a questionable deduction either, I'll give the lightning bolt thrower another ass to aim at.

I might question your use of titanium panties if you're going to use your ass as a target for lightning bolts however. ROFL

All interesting answers and views. The correct answer is of course Schedule C subject to SE tax. The IRS on an audit could care less as to the business activity provided it does not violate Federal tax law or a limited number of other specific laws such as money laundering.  Most expenses ordinary and necessary for the business are deductible but a word of caution as to deducting clothing as there are very specific requirements for it to be a deduction.

Of greater interest is the State tax returns that require a copy of the US Schedule C to be attached. A disclosure as to the product or service could present an admission as to a State crime and be referred for investigation.

Another issue of course is the filings and payments under State sales tax laws.  Some states have a sales tax law that imposes an alternative sales tax of up to 100% on criminal activities.