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IRS Sex workers taxes

Here’s What Happens If You Don’t Do Your Taxes

You, yes you, can do your taxes this year. Many of you are done, most of you haven’t started, and a few of you are freaking out. Some of you are thinking: what if I just don’t file? What will happen if I don’t pay? What if I didn’t file last year or the year before that? What will they do to me and will I be in prison with Wesley Snipes?

I have some answers to those questions! You should note that I am not a tax professional, that this is definitely not professional advice and that every situation is unique. Also you should be doing your taxes right now probably, not reading the Internet. But here’s some experience, offered person-to-person, that is not professional counsel.

It is better to do a cruddy job and file than to not file.
When I say “cruddy job,” I don’t mean “making wild guesstimations” or being dishonest. I mean: If you can’t nail some stuff down, forget about it and move on. For instance: Do you not have receipts for some expenses? Big deal: cut them out and forget about it. (These small expense-deductions don’t generally have too much effect on your tax burden anyway.) Err on the side of “hurting” yourself and just plow through it. It’s just not worth making yourself crazy over fifteen bucks!

You can fix your return!
It is easy to amend a return. It’s also easy for the IRS to amend your return: “You do not need to file an amended return due to math errors. The IRS will automatically make that correction.” Intense, right?

It is better to file and not pay than to not file and not pay.
What happened, you spend all your money? That’s okay, pal! Do your taxes, send ’em in, if you have absolutely no money. You will incur not-totally-crazy penalties over time due to not paying, and they will want to talk to you about when you can pay. (Yup, it’s always the broke people that have to pay more in this world.) That’s not ideal, sure! But it’s a lot more ideal than not having filed.

Okay, but should I be scared of the IRS?
The IRS only wants to hear from you. The answer, surprisingly, is a very firm “no”! Not at all! The IRS has some of the nicest, most understanding people I have ever spoken with in my life. True fact.

There’s a lot of TV- and movie-propagated terror about the IRS. (As well, the whole idea of the government and money is anxiety-producing on its own, sure.) And the truth is… well, they kind of used to be a little mean? But that’s actually ancient history. The people at the IRS are some of the funnest people ever! I have had long hilarious conversations with them on the phone. (For real, there are some hilarious ladies down in Atlanta.) IRS employees are like most civil servants; they deal with confused, freaked out and sometimes very dingbatty people (not you, friend!) every day — the kind of people who do not follow directions, particularly. So if you are not a jerk, they will be delighted to speak to you, at length. They will sometimes be like, “Girl, how did you get into this trouble?” and you’ll be like “Oh, haha, I’m a mess! Mistakes happen!” and they’ll be like, “I hear you! I get it!” Do not be afraid. What they want is to hear from you.

Should I be scared of my state tax department?
Actually… well, maybe just a little. The same rules apply as above — they do want to hear from you! — but, for instance, the New York State Department of Taxation and Finance seems to be a little cranky. They want their money, they want it now, and if you don’t give it to them, they will take it. I’m sure there are some wonderful, caring people working in all of America’s fine state tax departments!

What happens if you don’t file?
Have I mentioned that the IRS only wants to hear from you?

No really, what happens if you don’t file and don’t pay?
Great news! Eventually the IRS will do your taxes for you. This is called a substitute return. Doesn’t that sound nice? Well it’s not particularly. For an agency that’s devoted to taxes, they don’t do a very good job at it. (Kidding.) So the good news is that your taxes will be done! The bad news is that they will take your reported income, slot it into the appropriate tax bracket, and say you owe that percentage. So if you made $85,000, bam, you owe 28%.

Also? Lots of people can’t deal with taxes when they’re even going to get money back! People are funny. But you should know that your refund disappears in three years if you don’t file.

What happens if, like, I ignore the IRS?
Well, you’ll get a ton of mail. And the problem with being “in trouble” is that your sense of being in trouble fades really fast. That’s how people are built. Most people pay taxes because they’re scared of the consequences. So, you don’t file one year, and then… nothing that terrible happens! So you’re off to the races. And then you get a scary piece of mail from the IRS, and you ignore it, and… nothing terrible happens again! It’s very easy for the human mind to acclimate to this.

And then, they will make it so that you can’t ignore them. (For instance, your debit card will stop working! Heh.) You should head that off at the pass. The moral being: even if you aren’t scared of the consequences now, you will be later.

Ugh, they sent a letter to everyone I’ve ever worked for! How humiliating!
Nah, it’s not. Years ago, the IRS sent out a letter to people who’d paid me money, informing them they had an interest in having that money for themselves. And half the people who got these letters — caring, decent, professional, adult-type people! — were like “Ha, I got one of these letters last year!” It was a moment of bonding. To be fair, one person was a little judgmental, but you are by no means alone in these issues.

So how do I work out paying if I haven’t paid?
You know how GE and Bank of America don’t pay any taxes? That happens because they’re well-advised. You too should be well-advised. Down the road, if you end up in debt with the IRS, you will likely have a couple of options — usually Offer in Compromise or Payment Plan. These are actually not terribly straightforward. For instance, you can work out a payment plan with the IRS, after filling out quite a lot of paperwork, and having your financial life pretty well-surveilled by them, but the IRS is actually required to ensure that you have enough money and income to meet the payment plan. (They can’t agree to a payment plan that’s onerous.) But that doesn’t mean that, even if you are on an installment plan, that penalties don’t continue to accrue! So, many people find that they’re often better off getting a bank loan. And Offer in Compromise is extremely complicated. With those, for instance, you cannot miss a yearly tax payment for at least the next five years, or the deal is off. So you are going to need to become an expert — but more importantly, you’re also going to need to consult with a real expert.

Ugh, I don’t know what to do!
Guess what? The IRS only wants to hear from you. Also? These things are never as bad as you think. Now go off to your quiet place and do your taxes. I can promise you’ll be happy you did.

HELP I’M PANICKING!
Lots of online tax products are free to use to file an extension. If you can’t do ANYTHING else at all, do that.

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IRS Sex workers taxes

Five Reasons Sex Workers File Their Damn Taxes

1) Tax returns are the only proof of income you have if you’re self-employed and paid mostly, if not entirely, in cash.

2) It’s far better for the IRS to have your numbers to start with than to let them come up with their own.

3) If you get caught after not paying taxes for a number of years and get hit with a five-figure bill, it really sucks.

4) You become another person contradicting the stereotype of sex workers as tax cheats who don’t contribute to society.

5) It makes you (even more) morally superior to GE.

Things you need to file if you are an independent contractor stripper/model/performer/camgirl, an escort, sensual touch provider, etc:

Form 1040
Schedule C for income from a business (you are a business)
Form 8829 for home office deduction (you have a computer in your home where you’re doing business, yes?)
Your receipts for work-related supplies, travel, and other expenses
Records of your income

Even if you lack accurate records, give it your best shot and file. Even if you can’t pay right now, file. Even if what you do is illegal, file (you don’t have to write down what you do. We are all “entertainers”). Read this piece over at the Awl for some good reasons why you should file no matter what. It’s so, so much better to have YOUR realistic numbers than to have the IRS say, “Hey, we have this 1099 from your club, where you sold $1500 in VIP rooms, so we’re assuming that was a normal night for you, so we’re calculating your tax debt based on that,” or “Well, we saw on this 20/20 special about escorts that $2000/hour is a rate people pay in New York, so let’s start there.”

I don’t care if you’re gonna fudge it! Don’t tell me about it. Don’t tell anyone about it, for that matter. I’m not telling you to file because I think we owe it to the country or because I’m a bleeding-heart liberal or because I think the Tea Party is supremely misguided because they aren’t storming the gates of GE and Bank of America to demand they bear their burden of the tax load. I’m telling you to do this because it COVERS YOUR PRETTY PROFESSIONALLY SEXY ASS. Having personally fucked up with taxes before and knowing several dancers and escorts who’ve been in deep shit with the revenuers, I speak from experience when I say it’s to your advantage to stay on top of your taxes.

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IRS Sex workers taxes

Finances and Sex Work

Starting out or working in the sex industry can be daunting in terms of the financial aspects. Money is coming in, sometimes more than you’ve ever made or even seen before. It can be a bit overwhelming to plan and handle your money. I am not at all a tax professional, financial planner, or really anything but a whore with some experience. This is just advice from me to you, not intended to substitute for professional (well, that kind) advice. It was also not intended to help you avoid the system. Pay your taxes!

First and foremost, you need to plan your budget. How much money do you need to pay rent, utilities, credit card payments, loans, car payments, food bills, and so on? How much money do you need each week or month in order to cover the necessities? Figure this out first. Everything else after this amount is disposable income.

Based on your budget, some market research, and the guidance of other sex workers, calculate your rate. I’m not an expert on this. There are others who can help you, like the book The Internet Escort’s Handbook by Amanda Brooks. Similar principles apply, no matter what type of sex work you do.

Set up a book-keeping system. Having no way to track how much money is coming in and going out will end up hurting you. You’ll have no way to know what you’re averaging and how much you’re spending. This can be as simple as a writing down everything you make in a notebook or as complex as a color-coded spreadsheet or financial software. A good, basic system is the date, the number of or type of appointment or job, and the amount made.

Figure out how to handle your cash. If you are working for a club, dungeon, or company that issues you a paycheck instead of you dealing with cash, skip this.

Decide what you want to do with your cash. Keep in mind that anything you deposit in a bank account, pay bills with, or buy large items with leaves a paper trail. If you want to keep your cash handy, one thing you should invest in is a good fire-proof safe. Keeping a lot of cash on hand is risky as a sex worker. If others find out, you can be at risk of robbery. A safe can help. Don’t hide cash in obvious places, like your mattress, the freezer, your toilet tank, and so on. If you’ve seen it in a movie, other people have, too. Consider having a dummy safe. This is a safe you hide in a more obvious place (under your bed, for example) and keep a small amount of cash in. Then, get a good, sturdy, floor-bolted safe or wall safe to keep more in. If a thief breaks in, the thief will quickly discover your dummy safe and leave your main safe alone.

Depositing cash is a good idea. Consider either a safety deposit box or a bank account. It’s a good idea to have three bank accounts: a personal checking, a savings, and a “business” checking. This can just be a personal account you filter all of your money through before it goes into your personal account. Keeping your money separate can demonstrate that you are organized in your business book-keeping.

Now that you have a budget and are handling your money, start some basic financial planning. What are your long term goals? Are you doing sex work to pay for something, pay off something? A really good rule of thumb is to have three months’ of expenses in savings. That way, if you want to take a break, you get fired, transition, the market turns around, you are hurt and can’t work, you’ll have a cushion. You’ll also have money in case of an emergency, like a car breaking down or a medical bill.

If you can afford it, consider basic health insurance, catastrophic only. If you are young and have no major health problems, you can usually get this cheaply. It will have a high deductable (sometimes $5,000 to $10,000), so it’s not for your annual exam or going into the doctor when you have a cold. It’s just in case you have a major event happen. If you get hit by a car or something equally terrible, the medical bills can wipe you out. Having insurance can protect you.

Once you have met your savings goal of three months’ expenses, start a savings plan for other things. If it’s for school, for a car or a house, or something else, think about your investments. This is my weakest area because, to be honest, having enough money to invest has never really happened to me before. But consider seeing a financial planner for this service, or someone like the Financial Madam. You can make low risk investments, like a savings account with interest, savings bonds, or certificates of deposit. You can also make higher risk investments, like stocks. Having a long-term retirement plan is an awesome idea.

In general, try to be smart with your money.  If something is a business investment (like a computer to check your email on, a car, or sometimes clothes), talk to your tax preparer about what is deductible. Otherwise, try to avoid the impulse to spend all of your money just because it’s there. I went through a period like that when I first started working. I had an awesome time and got some lovely shoes, but when I needed to get out like right now, I had absolutely nothing to fall back on.

On the issue of things to do with your money, consider reinvesting in your business. Again, some of these things are tax deductible. Setting up a business model is a good idea. Decide what your long-term goals with your type of sex work are. Use some of your income to place ads in the right places to tap your target market. Get professional photographs. Set up a website. Make little investments to set yourself up for long-term success.

When things get more complicated, there are many more issues to consider, like becoming incorporated or becoming an LLC. These are things I know nothing about at all, hence, talk to a financial planner, an attorney, and definitely your fellow sex workers. Being smart with your money is the best way to gain your independence.

janebrazen.wordpress. com/2009/07/08/finances-and-sex-work

Categories
IRS Sex workers taxes

Should People Who Sell Sex Report Their Earnings To The IRS?

Over Thanksgiving weekend, social media blew up over an internet subculture of women who trade pictures and videos of themselves performing lewd acts for money. Online activists took to social media to slow this shameful trade. It resulted in a viral hashtag, #ThotAudit, in which thousands of people reported these profiles to the Internal Revenue Service of suspected tax fraud.

Thot is internet slang for “that ho over there.” The word is meant to denigrate a female. In the context of the #ThotAudit, it’s being used to describe a subculture of online prostitutes of various types. Such women set up “premium” accounts, in which they deliver varying levels of pornography, often accompanied with promises of social interaction ranging from private messengers to monthly video calls via Skype, some charging up to $3,000 a month for their interactions.

As one woman stated on her Patreon account: “I will do some other miscellaneous worthless craft that takes no skill to make you feel like I care about you [sic].” While this may raise some red flags in a reader’s mind about its legality, the technical definition of what these women do is creating pornography, so it’s legal.

This internet sex subculture bothered a young bodybuilder by the name of David Wu. His first online mention of the problem came early Thanksgiving morning, when he reposted a question on his Facebook profile: “Why do sex workers demand respect when they don’t even respect themselves?”

He escalated the question later in the day by posting a poll asking “Is ‘sex work’ real work?” The poll was swarmed in comments, apparently by sex sellers and their followers. The overwhelming response inspired Wu to push further against the pervasive online porn culture.

These people who sell sex for money have online “tip jars,” but many don’t report their earnings. Wu made a post that has, as of this writing, been shared nearly 19,000 times. It took a screenshot of an Internet pornography seller who posed the question: “Who reported my premium Snapchat to the IRS? I’m being f***ing audited,” followed by a call to report more of the sex traffickers.

He posted a handy link to the IRS. This site not only gives the information on how to report but offers a form where an informant can collect a percentage of the unpaid taxes from the IRS as a bounty if their information turns out to be correct.

Once Wu’s post went viral, it spurred a storm of panic among pornographers. Hundreds of these profiles were reported over the weekend. One posted in response, turning it into a feminist talking point: “A bunch of men on Twitter are mad because they believe they’re entitled to free nudes, so they’re reporting sex workers’ Snapchat incomes to the IRS for audits… …Just say you hate women & leave.”

Australian reporter Frank Chung spun the concern for tax fraud into politics, stating, “Right-wing trolls report online sex workers to tax authorities in #ThotAudit,” also calling the people reporting on the potentially illegal behavior of sex workers “incels.” The incel charge has been repeated frequently in conjunction with the hashtag. The term refers to people who are not sexually active and will likely never be, despite wishing to be. It’s most used derogatorily toward men who are perceived as unable to obtain sex.

PJ Media’s Megan Fox responded by saying “Imagine having so low of an opinion of your writing that you have to increase sales by auctioning off nudes of yourself at 40.” Fox published an article titled “Fed-Up Gamers Report Intrusive Sex Workers to the IRS for Tax Evasion,” concluding, “As a mother of daughters, this campaign strikes me as morally good. If this can dissuade young girls from using their genitals to make money off men who are betraying their wives, I’m all for it.”

People who sell sex and sexual images, as well as some feminists, try to normalize porn and prostitution. However, it is important to note this weekend’s outrage was directed not at the morality of their actions, but whether they’re paying taxes.

The argument feminists have made on repeat is “Sex work is real work.” If this is the case, shouldn’t such workers be subject to the same tax laws as the rest of us? Provocateur and pick-up artist Roosh made several snide comments about the pushback, stating, “I’m finding it hard to believe that women are not reporting income that is direct deposited into a bank account linked to their social security number, but their anger at the #ThotAudit shows that’s exactly the case. It’s like they think laws don’t apply to them or something.”

There’s one positive aspect about those angered by the call to ensure these “jobs” are properly taxed: these young women are coming to understand the conservative and libertarian stances on taxation and how it affects normal people. Taxation does feel like the theft of money into the endless pit of government, and when you’re not used to having it taken from you, it can be a real eye-opener.

As such, it’s best to have sympathy on these poor women who are at risk of losing their incomes and let them know that if they really want to stop this online persecution by tax, they must vote for Republicans for Congress in 2020.

reposted with permission — Thanks Jon

Jon Del Arroz is an award winning author of the bestselling novel, For Steam And Country. He is currently writing several space opera and steampunk books, as well as a graphic novel set to come out later this year. He can be found at: http://delarroz.com. Twitter: @jondelarroz