Tax Question

[+ Avalon]

I know an escort has to pay taxes. What do you put down as your occupation? How do you provide proof of income?

[Bearofdistinction]

I know an escort has to pay taxes. What do you put down as your occupation? How do you provide proof of income?

 

Communist Party Organizer

[Good Grief]

Nosey, are we?

 

[+ freecahill1965]

Nosey, are we?

 

Good grief, what will you think of next!

[Kevin Slater]

I know an escort has to pay taxes. What do you put down as your occupation?

 

I would just call myself escort on my tax returns but that would just raise a wrinkle next time I apply for a mortgage, so I use consultant.

 

How do you provide proof of income?

 

Proof to whom? If you mean the IRS, you don't have to prove your income, you just claim it like any other cash business would.

 

Kevin Slater

[KennF]

I posted this elsewhere, but here again is a list.

 

Here are some occupations that may assist you:

13-1011 Agents and Business Managers of Artists, Performers, and Athletes

21-1093 Assistants, Human Service

27-1019 Artists, All Other

27-2031 Dance Artists

27-2099 Entertainers and Performers, All Other

39-9000 Other Personal Care and Service Workers

39-9021 Companions, Elderly

39-9021 Aides, Personal Care

39-9031 Fitness Trainers and Aerobics Instructors

39-9090 Miscellaneous Personal Care and Service Workers

39-9099 Personal Care and Service Workers, All Other

41-3099 Business Services Sales Representatives

41-9011 Demonstrators and Product Promoters

41-9012 Models

 

And the way the system works, it isn't likely that you'd ever have to prove your income was as high as you list.

 

The government is perfectly happy to accept overreporting of income and underreporting of deductions.

[LoveNDino]

It's called the Schedule C ( Profit or Loss From Business ) form and honestly you can put whatever occupation you want. Last year I put "Mustang Wrangler" & "Extraterrestrial Life Examiner & Inseminator" for a couple of my appearance gigs where I made just over the reporting amount. The IRS doesn't really give two shits as long as they get their cut.

Hi. I don't think we've met. I'm from the planet Mars.

[adannyboy]

I posted this elsewhere, but here again is a list.

 

Here are some occupations that may assist you:

13-1011 Agents and Business Managers of Artists, Performers, and Athletes

21-1093 Assistants, Human Service

27-1019 Artists, All Other

27-2031 Dance Artists

27-2099 Entertainers and Performers, All Other

39-9000 Other Personal Care and Service Workers

39-9021 Companions, Elderly

39-9021 Aides, Personal Care

39-9031 Fitness Trainers and Aerobics Instructors

39-9090 Miscellaneous Personal Care and Service Workers

39-9099 Personal Care and Service Workers, All Other

41-3099 Business Services Sales Representatives

41-9011 Demonstrators and Product Promoters

41-9012 Models

 

And the way the system works, it isn't likely that you'd ever have to prove your income was as high as you list.

 

The government is perfectly happy to accept overreporting of income and underreporting of deductions.

 

I typed Escort into TurboTax and it recommended the 39-9000 other personal care and services code

[+ VictorPowers]

Just a clarifying question:

Condoms and lube are tax deductible as a business expense?

[Rudynate]

Just a clarifying question:

Condoms and lube are tax deductible as a business expense?

 

 

Why wouldn't they be?

[Islesguy]

Just a clarifying question:

Condoms and lube are tax deductible as a business expense?

The key phrase for deducting business expenses is "ordinary, necessary, and reasonable." Of course that is open to wide interpretation.

[KennF]

Just a clarifying question:

Condoms and lube are tax deductible as a business expense?

 

If you're audited then only the condoms and lube that were used in your business practice would be considered. Supplies you used for your personal use, such as lube for jacking off while not with a client or condoms used while fucking around with a boyfriend/date/hookup wouldn't be deductible.

 

I would probably suggest you should lump them together under "Supplies".

[rossthebosssf]

Actually, income earned through questionable businesses does not have entitlement to the usual deductions from what I understand. Stick with consultant and deduct non-eye brow raising deductions such as regular travel, second residence, etc.. Condoms and lube would be a very bad idea to try and deduct. I would even question trying to deduct your advertising. In the event of getting audited, you don't want them to dig too deep. Just my 2 cents.

[+ VictorPowers]

I was being facetious with that comment. I keep it simple with airfare and hotel expenses. Those two expenses are the biggest anyway. Why get picky over expenses, when the income far exceeds them?

[Kevin Slater]

Actually, income earned through questionable businesses does not have entitlement to the usual deductions from what I understand. Stick with consultant and deduct non-eye brow raising deductions such as regular travel, second residence, etc.. Condoms and lube would be a very bad idea to try and deduct. I would even question trying to deduct your advertising. In the event of getting audited, you don't want them to dig too deep. Just my 2 cents.

 

I believe I've read that a drug dealer cannot deduct the cost of goods sold (i.e. what he paid for the drugs), but other than that I'm not aware of any other limitations on deductions for "questionable" businesses. And I'm not sure I'd characterize an escort who pays his taxes as a questionable business to begin with.

 

I think condoms and lube would be perfectly fine, especially as they would most likely be bundled under "supplies".

 

In the event I get audited, I tell the auditor for the get-go that I'm a sex worker and we go on from there to confirm that all my expenses are appropriate.

 

Kevin Slater

[+ quoththeraven]

Also there are limits on the IRS that prevent them from ratting you out to other law enforcement if your tax filing is legit. Thank Richard Nixon, whose misuse of tax information led to passage of a statute criminalizing most disclosure of taxpayer information.

 

They can respond to a request from law enforcement for financial information needed for an investigation (need a court order, though) but that presupposes you already being a person of interest.

 

https://www.irs.gov/government-entities/federal-state-local-governments/disclosure-laws

 

In other words, @Kevin Slater knows what he's talking about.

[Kevin Slater]

I believe I've read that a drug dealer cannot deduct the cost of goods sold (i.e. what he paid for the drugs), but other than that I'm not aware of any other limitations on deductions for "questionable" businesses.

 

Turns out I'm exactly wrong. § 280E of the Internal Revenue Code stipulates that cost of good sold is deductible for illegal drug dealers, but all other business expenses (rent, depreciation, professional services, etc.) are not.

 

Kevin Slater

[Beancounter]

I hope an escort never has to go through a “lifestyle “ audit with the IRS. And a lifestyle audit has nothing to with being an escort. A lifestyle audit can be performed on anyone and is usually performed on individuals who haven’t filed taxes over a period of years and there is no formal documentation of income from the usual sources. Basically the IRS looks at your lifestyle and tells you how much income is needed to support the way you live. The individual being audited is then assessed taxes on this perceived income. I had a friend go through this and it wasn’t a pretty picture.

[rmike]

§ 280E of the Internal Revenue Code

 

Not exactly expecting an IRS Code citation in an escorting forum!

[+ quoththeraven]

I hope an escort never has to go through a “lifestyle “ audit with the IRS. And a lifestyle audit has nothing to with being an escort. A lifestyle audit can be performed on anyone and is usually performed on individuals who haven’t filed taxes over a period of years and there is no formal documentation of income from the usual sources. Basically the IRS looks at your lifestyle and tells you how much income is needed to support the way you live. The individual being audited is then assessed taxes on this perceived income. I had a friend go through this and it wasn’t a pretty picture.

It's more complicated than that. There are a couple of ways to document income indirectly when a taxpayer is in a cash business or is self-employed.

[Beancounter]

It's more complicated than that. There are a couple of ways to document income indirectly when a taxpayer is in a cash business or is self-employed.

I’m well of the intricacies of documenting income in a cash business...trust me. The point I was trying to make is that the IRS has the authority and power to determine your income and assess taxes based on the lifestyle you’re living should you fail to provide that information to them.

[KennF]

Actually, income earned through questionable businesses does not have entitlement to the usual deductions from what I understand. Stick with consultant and deduct non-eye brow raising deductions such as regular travel, second residence, etc.. Condoms and lube would be a very bad idea to try and deduct. I would even question trying to deduct your advertising. In the event of getting audited, you don't want them to dig too deep. Just my 2 cents.

 

It is one of the great ironies here. The IRS has the power to request information, true. But the IRS is not part of the Justice Department and the information is restricted to tax related issues only. For example, an assassin who reports his income cannot be referred to the Justice Department for criminal indictment/prosecution. However, the Justice Department CAN refer matters to the IRS for review.

 

Some of the most potent criminals have been convicted on TAX related issues when regular law enforcement couldn't succeed.

 

For this industry, if you report your income then the IRS can't do anything about it. If the Justice Department comes after you, even if you stop business, they can get the IRS to prosecute you on tax evasion.

[+ quoththeraven]

The IRS doesn't care about the source of your income, just whether you are reporting it properly.

[sincitymix]

It's called the Schedule C ( Profit or Loss From Business ) form and honestly you can put whatever occupation you want. Last year I put "Mustang Wrangler" & "Extraterrestrial Life Examiner & Inseminator" for a couple of my appearance gigs where I made just over the reporting amount. The IRS doesn't really give two shits as long as they get their cut.

youd better believe it. one year i owed the irs .75 cents. i had to mail them a check

[+ quoththeraven]

youd better believe it. one year i owed the irs .75 cents. i had to mail them a check

A year later and I'm still tussling with them about a failure to file penalty for 2015. I filed on extension and the return didn't arrive until a week after the extension expired. Their response to my sending them a copy of the certified mail receipt showing it was mailed on time has been another bill. Grrr.

 

We're talking about $79 but since I'm not billing myself for my time, so far it's only involved the cost of stamps and paper on which to print and copy correspondence. Still worth it to me.