Taxes?
theDirkDiggler
Illinois
I understand that almost all dancers are independent contractors, so they're almost certainly reporting and getting reported on 1099s. Which also includes self-employment taxes. And i know clubs (and strippers) try as hard as they can to hide cash from the IRS reporting minimum as possible. But all the credit card transactions (and i'm not sure what percentage of drink sales and VIPs are done with credit cards) and ATM transactions and fees are probably mostly reported on both ends, as the clubs (and strippers to a smaller degree) need to also claim some and certain revenues if they're also going to claim the maximum expenses.
What percentage of the average stripper income do you think is reported, and what percentage of strippers do you think even report their income or file taxes? I know it's a difficult question to answer with all the range and various tax laws across the states, and it's just really speculation at this point. Please don't turn this into a political discussion although that request is probably pissing in the wind.
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Of course, depending on how payment is structured, this may vary between clubs. Also, some clubs have gone to W-2 instead of 1099. From what I have heard in those cases, the club takes all the money and pays the dancer at the end of the night, or she is cut a check that meets minimum wage requirements if she didn't sell enough dances to make minimum wage. At the W-2 clubs, it's likely that everything except tips is reported.
Two clubs have a system that requires the patron to buy tokens or put bills into a machine in a booth, and those tokens and machines are mappable to the girls. So they know every dollar spent for every lapdance and VIP dance
The rest of the clubs track every dance by hand via a dance counter (basically, one of the bouncers keeps track), and all customer payments are put into a little locked purse that each girl carries around. Only the club can open the purse at the end of the night, ensure payment of the tracked dances are there and give the girl her cut.
Any extra tips, the clubs don't know about, and I assume the girls don't claim on their taxes.
Your first paragraph was confusing. First it sounded like anything the dancer makes (her cut after she, or the customer really, pays the club for private dances and VIPs is reported, just the club's cut isn't reported. Then afterwards, you say that anything the customer gives to the dancer (which i assume is her cut after she, or again the customer, pays the club) isn't reported, the dancer's cut. So they sound contradictory.
I would imagine since there were so many cash sales, and no receipts or proof involved, besides just a simple manual counter (and the clubs could easily manufacture two books), and sometimes no surveillance as well, that the clubs could very easily hide a majority of dance sales and not report them. And this could pass on to the dancers. Hypothetically speaking, as i have no idea if the freaking internal revenue service reads these discussions.
Take my CF Jenna. She has stripped since she was 18, and I estimate she brings in
$100K a year. ( She does not know the amount since she does not keep records.) Until last year she never filed taxes at all. Then other strippers told her how they got money from filing taxes because they had kids. Jenna went to a tax preparer used by a lot of dancers, and he told her how to file as an independent contractor. He had her fill out dollar amounts on a calendar and explained how much to include so she would qualify for the earned income credit and child tax credit. She got a refund without ever paying anything in. Being a stripper has its privileges.
It goes to show why dancers are always excited when you have cash vs a credit card. I wonder if those sky high credit card fees are to discourage customers from using them for the same reason?
I have sometimes been drafted into the role of tax advisor for dancers at our local clubs.
SJG
She was asking what triggers the IRS to go after people. I explained that its when you lifestyle is clearly beyond your reported income. And they especially take not of things which are hard to hide, real estate, vehicles, securities.
The girl was trying to be honest. She was also working a supermarket checker.
SJG
You would think so, but the only ones doing it are likely the clubs that have been sued by the dancers to be removed from IC status. I don't think they realized what they were getting themselves into.
SJG
The only thing the dancers are likely to get out of it is guaranteed minimum wage pay on the nights they do work. This probably means the clubs will have fewer dancers on shift on traditionally slow days, so there will be less opportunity for us PLs to leverage internal competition and desperation to maximize our outcomes.
The dancers do not receive any benefits common to employees. No health insurance, no unemployment insurance, no employer social security payments, no workers comp.
The job does have some perks. Dancers have the potential to earn much more money than their education or skills would command in the ordinary job market. They can avoid paying taxes. They can drink on the job and take drugs. They can party and act irresponsibly. They can take advantage of government programs intended to help the poor. They can convince PLs to pay their bills and support their children and boyfriends.
She had a number of safe deposit boxes full of cash. The new truck she bought when I was with her was paid in cash. She said she would never qualify for a loan. Also, she worked in two different clubs.
A few years after she quit dancing, I saw her a few times. She asked me where I invested. She also owned a condo on the beach and tooled around in her Porsche!
BTW, for a couple of years while dancing she lived with some guy, so I am sure she was "saving" even more cash.
damn, you make them sound just like politicians