How do I handle my taxes as a stripper/independent contractor?

Question

I want to do it legally and so that I can start building good credit and be accpeted for a home loan. Please send me a link to a site or something that will help! Thanks.

Answer 1

You're on the right track. Most women I've encountered in the adult entertainment industry work as independant contractors, which permits them a wide range of deductions.

Assuming a range of income like I normally see, and no personal deductions yet, your net earnings will be subject to effective rates of 20% income tax, 15.3% self employment tax, and 5% California income tax. This is only on your net earnings, after expenses incurred in the ordinary course of business.

Valid expenses include uniforms and costumes, makeup and hair supplies, props, vehicle expenses for travel, educational materials, business meals, health insurance, and licenses.

Additionally, forming a corporation with an S election is generally a good way to reduce the self employment taxes by electing to take a portion and pay payroll taxes.

There are literally dozens of techniques to reduce the bulk of the liability and still look good on paper for credit and mortgage companies.

As far as making estimated payments go, if you are just starting out, you most likely do not have a requirement to make estimated tax payments yet. It still may be a good idea though. Next year you will be required to make payments every quarter.

In my practice, I have the opportunity to work with alot of residential loan officers. After you have worked a couple of years, a CPA can review your returns and prepare a letter stating that you make income from self-employment, which has been very useful for stated income loans.

Areas of audit risk you should be aware of:

Your industry is rife with under reporting tip income, and the IRS has recently been persuing them. You should establish a written record of your real total income for every day worked, regardless of what is reported on the 1099-MISC you get. What has been happening is that the IRS has been determining an estimated rate on-site, and charging the dancers the tax even if they didn't actually make that much. A written record has been the best approach to counter that.

Uniforms and make up can be deducted, but they should be limited to items that are, in their nature, unlikely to be worn or used when off the job.

My cousin actually wrote off movies she purchased as education aids. I though that was on shaky ground, but the agent accepted it. Rock on Bill and Ted.

Contact me if you have more questions.

Good luck!

Answer 2

The best advise that you will get here is to contact a professional tax preparer. Other than that you need to give some thought to those aspects of your business that may be a business expense. Any thing that you could verify as such an expense is deductible and therefore reduce your tax. You have the interesting situation of wanting your return to show a large income for the house loan but on the other hand you should not pay more tax than necessary. You can get a few credit cards and charge every month but pay them off each month. Be careful with that those cards can get out of hand real easy. As for a site to learn about income tax the most available information can be found on the IRS site at IRS.gov

Answer 3

Better yet go to the phone book and look in accountants,
I assume youll be getting a 1099 byt the company you work for, be very careful and make sure you put money back to cover taxes on your earnings. Id say 25% would be a general rule. Wondering if you have to claim all your tips?

Answer 4

You would have to report your income, and fill out a w2 that shows you are self employed....my inital reaction was to say to report waaaay less than you actually make, so you don't pay taxes on it, but since you want to establish a credit history, report the money, and open a bank account....get a few credit cards, and pay them off every month to build up your credit history.

Answer 5

Check with a tax accountant.

Answer 6

your so hot