Proposed tax law's impact on strip clubs

11/4/2017 5:28:31 AM

"Take: Elimination of Deductions for Entertainment Expense

If you're the kind of MAN'S MAN whose idea of a kick-ass client meeting is a round of golf followed by a visit to the strip club, there are changes afoot for your business. The House bill would deny all deductions for entertainment, amusement, or recreation activities. As a result, from this point on, when I choose to spend my lunch hour at the Diamond Cabaret, instead of calling it "entertainment," I'll characterize it as "research into employee versus independent contractor issues.""

https://www.forbes.com/sites/anthonynitt…

15 comments

Latest

warhawks

•

7 years ago

Most of the deductions businesses and individuals could take for “entertainment” purposes were eliminated or pared way back in the last 90’s early 00’s. I know it hurt the Strip Club businesses in Michigan pretty hard back then because sales and ad guys couldn’t take clients out and write off the expenses as much anymore.

But, I have to wonder... how will this effect Russian prostitutes who pee on guys in hotel rooms and play golf all the time on the clubs they own?

Cashman1234

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7 years ago

It will hit small businesses most. However, I doubt it will have a significant impact.

mark94

•

7 years ago

If the economy grows at 4% as a result of lower business taxes, strip clubs will do just fine. I go to clubs when I have cash in my pocket, not when the tax law is favorable.

Tiredtraveler

•

7 years ago

This type of deduction has been gone for years for us little guys.
In 40 years of meeting with clients and customers I have actually gone clubbing only twice. I would never suggest going to a strip club to a client.
Besides the only way to deduct the expenses is to get a receipt (the IRS is Draconian about entertainment receipts) and the only way you are getting a receipt from a strip club is by using a credit card which breaks rule #1 which is:
(repeat after me) Cash Only !

shadowcat

•

7 years ago

Even with the donations I make to single moms, I still don't have enough deductions to itemize my tax returns. I don't think this tax cut is going to be any wind fall for me.

mark94

•

7 years ago

The way the tax bill is structured, itemized deductions won’t make sense for 95% of us. That’s mostly because the standard deduction is doubled.

That 95% is probably higher in lower tax states while some wealthier people in NY, NJ, Illinois, and California will still benefit by itemizing.

The biggest loser in this is H&R Block and Turbo Tax.

mark94

•

7 years ago

For most strippers, this tax reform should also mean it’s to their advantage to file income tax and declare much of their income. The tax on income of $50,000 would be about $3,000-$4,000. Paying that frees them from the need to hide income and eliminates the risk of tax legal problems. They could establish credit, borrow money, get credit cards, and so on.

mark94

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7 years ago

Oops, I forgot about the self employment ( Social Security ) tax that would apply to strippers. Never mind.

Mate27

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7 years ago

True Mark, but strippers that I've met rarely think ahead. It's a "I'll get what's mine" attitude and the fact that they don't have to claim anything from their cash business is why I'm thinking this will be status quo in stripper world.

Lurker_X

•

7 years ago

I hope the alternative minimum tax stays out of the final bill. I always hated the way I would be forced to fill out side schedules just to answer the question whether the AMT applied to me or not.
I finally gave in for 2016 and started using Turbo Tax. I had OID on some bonds, short and long term gains, some units of a limited partnership, depreciation schedules on rental properties. Just could not manage it all by hand anymore.

Jascoi

•

7 years ago

i was never in a postion to claim strip clubs and golf as business deductions. definitely i was in the wrong business.

i've been using turbo tax ever since my tax guy made a sizable mistake. besides it is actually cheaper and easier for me to enter the information myself then to carry that info to his office and sort thru things and hand it to him just to have him enter the same information into his computer.

Rick999

•

7 years ago

So if I have a potential large itemized loss, better to report it this tax year rather than wait I guess?

mark94

•

7 years ago

There is some talk of making this retroactive to 1/1/2017. We won’t know for a while.

mark94

•

7 years ago

Hate to tell you, but the current draft eliminates deduction of medical expenses.

BurlingtonHoFactory

•

7 years ago

We shouldn't be able to deduct anything. It's just social engineering. They should clear away all of this crap and start from scratch.

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