NECPA in NEBRASKA Posted January 18, 2014 Report Share Posted January 18, 2014 This is a real question, so please don't flame me. I am trying to help a family friend figure out how to file her tax return. I won't touch it, because I know that she doesn't have records. She only works for tips and the bar does not issue 1099s or W2s. I don't understand it, because it is an international business. She does have to pay the club $50 per day that she works and $5 per dance. The other dancers told her that she can write off her spray tan, hair and makeup. I told her that was not correct, because even though she says it's just for the job, it's not. She wanted to take off mileage, but I told her that was commuting, no matter what the other girls say. I'm assuming that her costumes should be deductible, because I would hope that it's not customary to wear them. I really can't think of anything that she can deduct, besides her costumes and what she pays to work there. If anyone knows of any legitimate deductions that I should tell her about, please let me know. Thanks! Quote Link to comment Share on other sites More sharing options...
Catherine Posted January 18, 2014 Report Share Posted January 18, 2014 Wigs or hairpieces, if solely for the job? Theatrical grade makeup (nothing that can be purchased in a non-theatrical store)? Business cards? Dance lessons? 1 Quote Link to comment Share on other sites More sharing options...
jshtax Posted January 18, 2014 Report Share Posted January 18, 2014 Breast implants Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted January 18, 2014 Report Share Posted January 18, 2014 I would give her the makeup, spray Tan and other things to look the "part" as a dancer. She is in business. Treat it as such, she isn't any worse than the construction guy whose CGS is always 5k below his "sales". The problem is, there is no money left over, right? So, if she made $50k, and the tax due is $12k, there is no $$ to pay it... And none of the other girls are paying taxes... That is the real problem. Also, what is the part about "International Business?" and no 1099's, W-2's? Many of them do SOMETHING. Not always everything, but enough to keep the local and state officials out of there bank accounts... Rich 1 Quote Link to comment Share on other sites More sharing options...
michaelmars Posted January 18, 2014 Report Share Posted January 18, 2014 I once had an audit on an escort that deducted birth control and the agent accepted it.... That aside, I too do a few strippers since my old office shared a parking lot with a club and they would come in from my sign. [ah the benefits of having a store front office]. You aren't doing an audit so you don't need records other than what they tell you, get it in writing and educate them how the irs will do a lifestyle audit; what is their rent, their car payments, their child care, food, clothes etc. Most of mine would show a 20k-50k profit, especially the ones that were thinking of buying a condo etc. ps: I no longer am in the store front but its available if any one is interested, the good part is I never had to give a guy directions to my office. me "hey its across from the ******Trap" them "ok I know where that is" 4 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted January 18, 2014 Report Share Posted January 18, 2014 I might have to do a little more research, what's the address. And I agree with Michael Mars on the life style audit, you'll be very surprised the amount of money they rack up, no pun intended. 1 Quote Link to comment Share on other sites More sharing options...
michaelmars Posted January 18, 2014 Report Share Posted January 18, 2014 Of course I am on long island, where everything costs more. the clubs have 2 ways to go, you pay to dance like in the o/p. or you do a split with the house where the house gets 1/3. In eithercase I wouldn't report that as an expense, just use what the girls take home. Also around here a dancer can make 100-150k without "extras" just from lap dances. Quote Link to comment Share on other sites More sharing options...
Mr. Pencil Posted January 18, 2014 Report Share Posted January 18, 2014 I won't touch it, because I know that she doesn't have records. I would do the return for any client who wants to file correctly.. If she will in good faith complete the organizer and supplement it with something similar to a P&L, I can promise a return that can be defended in audit. I would explain she can reconstruct records the same way the IRS does, using bank statements and monthly expenses like rent. If her numbers are reasonable and consistent, I would not question them. I wouldn't expect her to have many kinds of expenses, but costume would be a big one. I would explain that tanning is probably what Tax Court calls "inherently personal," but generally her show makeup is part of the costume. Vehicle expenses are one thing I am required to investigate further, and commute would not be allowable. I would also say that she sounds like a common law employee, and explain the implications of that. I would not make that decision for her, but would file that way (including SS-8) if she wanted. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted January 18, 2014 Report Share Posted January 18, 2014 I love that Mike specializes in clergy and strippers! 1 Quote Link to comment Share on other sites More sharing options...
michaelmars Posted January 18, 2014 Report Share Posted January 18, 2014 not me, no clergy just strippers, I have my standards. Of course I had to stop doing returns for barter once I got married. 9 Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 18, 2014 Report Share Posted January 18, 2014 Do her return and send a 1099 to the owner of the establishment. Chances are she doesn't work in the same place for more than one year anyways. Quote Link to comment Share on other sites More sharing options...
michaelmars Posted January 18, 2014 Report Share Posted January 18, 2014 Do her return and send a 1099 to the owner of the establishment. Chances are she doesn't work in the same place for more than one year anyways. I would never send the 1099 for a big reason, if they fight it you have absolutely no records to back up what you are reporting to the irs and since most clubs are owned by people that perhaps play a bit rough you don't want to start with them and good luck getting their ein's or even the real corporate name. YOu might have a rational to think you can 1099 them for the door fee but for the dances, they might take the position that they charge the customer 40 and pay you the $35 net so in fact they should 1099 you. YOU really don't want to start with all these problems. Take the amount she reports to you as income, maybe write off some costumes and that's it. And no one here has yet to address the fact they make lots of tips over the dance fees. You truly want to file a return based on what you were told, keep it under the radar and keep it simple or you should pass on it. BTW the profession should be listed as entertainer or actress not STRIPPER, or all the local irs guys will want to audit just to see her <s> 2 Quote Link to comment Share on other sites More sharing options...
NECPA in NEBRASKA Posted January 18, 2014 Author Report Share Posted January 18, 2014 Thanks for all of the help.I can't do the return for personal reasons. This is just a favor.I am protecting her, since she does not want her daughter's father or his friends to find out what she is doing. The job is legal, but he would have a fit and try to take her daughter. I don't care what she does as long as the child is fed and has a place to live. She is a good Mom and is trying to find a better job, but this pays pretty well and there aren't a lot of jobs around here that pay that well if you have no skills. Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted January 20, 2014 Report Share Posted January 20, 2014 Thanks for all of the help.I can't do the return for personal reasons. This is just a favor.I am protecting her, since she does not want her daughter's father or his friends to find out what she is doing. The job is legal, but he would have a fit and try to take her daughter. I don't care what she does as long as the child is fed and has a place to live. She is a good Mom and is trying to find a better job, but this pays pretty well and there aren't a lot of jobs around here that pay that well if you have no skills. All the more reason for her TO report properly..... By hiding it, it can just be exploited further by the Baby Daddy when or if it gets back into court. Have your client/friend/favor document what she does. Who takes care of the child when she is working, what she does when she is with the child, living circumstances, and other seemingly boring info that can become very important when the lid gets peeled back and opposing counsel wishes to make her look bad. Tell her not to demand and increase/change in child support, because that generates a response to look closer at HER, or a counter-claim. JMHO. And there was a reason that the baby daddy wanted to date her.... Rich Quote Link to comment Share on other sites More sharing options...
NECPA in NEBRASKA Posted January 21, 2014 Author Report Share Posted January 21, 2014 Thank you, Rich. I will tell her. She didn't dance when she was with the father. She lost her job and has not been able to find anything else that paid enough to support her. I am going to help her with a resume to see if we can get her back in a day job and still be able to support the two of them. 1 Quote Link to comment Share on other sites More sharing options...
bertrans Posted January 27, 2014 Report Share Posted January 27, 2014 Breast implants Tax Court has problems with breast implants; the only case I can remember where thet were allowed involved an 'extreme' club which required extraordinarily large implants, which the court ruled could only have a business purpose. Quote Link to comment Share on other sites More sharing options...
The Kidd Posted January 27, 2014 Report Share Posted January 27, 2014 Pole lessons is something that comes to mind. Because it is "training". As for clothes, since she can wear it offside of work, then it's not a write off. (assuming lingerie) - but you said costume. But did they mean lingerie? I always look at if they can wear it outside of work. If yes, then i don't do it. (unless it's a safety thing, like steel toe boots) Also, is she a pole dancer? Or a women you higher? - just wondering because you said mileage. Quote Link to comment Share on other sites More sharing options...
NECPA in NEBRASKA Posted January 27, 2014 Author Report Share Posted January 27, 2014 I am going to have to ask her if she took any training. She wanted to write off Victoria's Secret and I told her that is out, but that her "stripper heels" should be OK. She won't be able to take mileage, because it is all commuting to the club. Thanks! 1 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.