I'm independant now.... Now what?

I've been an escort for about 5 years and i've always been with a legally reputable agency and always recieved a w2 and had my taxes done. I've had a way to prove my income for loans and leasing purposes.

Do I need an accountant?
How do I file?

I'm terrible when it comes to math and money.
Can someone please point me in the right direction?

thanx

hey grl.....yes i just filed my taxes two weeks ago.... at H&R block and it's legal.....just file under independent contractor and it's all legit

I do as well only I file as an Entertainer.

I try to do it quarterly by keeping up with receipts and expenses.

I've been an escort for about 5 years and i've always been with a legally reputable agency and always recieved a w2 and had my taxes done. I've had a way to prove my income for loans and leasing purposes.

Do I need an accountant?
How do I file?

I'm terrible when it comes to math and money.
Can someone please point me in the right direction?

thanx Originally Posted by Angel_Grace

I'm not doubting you - I just find it amazing that you were considered an employee (hence the W2) and had withholding taken out, etc., as this would place liability for your actions on the Agency you worked for and not on you as an independent contractor . . . I've never heard or seen such an arrangement where an Agency would shoulder the burden of that liability. Not to mention that it implies you were covered by worker's comp, etc., subject to the Family and Medical Leave Act (depending on the size of the company / Agency) and protected by other provisions of both state and federal law as a true employee . . . are you sure (certain) your weren't issued a 1099-MISC?

If you'd like to know how some of us ladies accomplish this (filing legally) - you may want to consider asking it in the Ladies' Comfort Zone (however, until you've attained "Registered Provider" status you won't be able to access that forum) . . . many would be hesitant to publish a reply here in a national forum viewed by everyone or publish a reply at all in any circumstance regardless of where the question was asked . . . you see, there are inherent legal difficulties in reporting the income.

In the United States, all persons subject to the Internal Revenue Code (which is a whole other thread - see: this link if interested) who earn income by illegal means (prostitution, illegal gambling, theft, drug trafficking, etc.) are required to report such unlawful gains as income on their tax returns (James v. United States 366 U.S. 213 [1961], overruling Commissioner v. Wilcox, 327 U.S. 404 [1946]), but they often do not even though the United States Supreme Court has ruled that requiring the reporting of said income from illegal enterprises or activities does not violate an individual's right to remain silent and the IRS may not "report" (by statute) your filing of said income to another federal agency for prosecution in most cases . . . and so tax evasion remains a popular method for stacking charges and may be responsible for the trend to lead a prosecution to consider RICO charges depending on the individual circumstance. Other times, tax evasion can be used as a "one more nail in the coffin" strategy by prosecutors in their stating that if a person earns illegal income, he or she may also be suspected of (charged with) tax evasion.

However, keep in mind that those who attempt to report illegal income as coming from a legitimate source can be charged with money laundering. So, those of you that file those monies as income as an "entertainer" and don't define precisely the type of entertainment (the return allows you to add a specific descriptor) when entering the business classification code, can be charged with money laundering (theoretically - UNLIKELY - but theoretically possible). Generally, with the correct descriptor, you can file as a self-employed person using the NAICS (business) Code 711510, "Entertainers, independent" (which is also the IRS Business Activity Code for "Entertainers, independent").

So, you're in a bit of a damned if you do, damned if you don't situation - and you need a tax attorney or a very good, creative accountant - especially if you're planning on reporting substantial income to balance a lifestyle (loans, mortgages, credit, etc.).

You really need to seek qualified counsel. There are ways to report the income without a hassle, but in some jurisdictions I can be cited for giving you the advice I already have without being licensed to do so . . .

By the way, your advertising in another thread for a "hobby friendly" CPA or other professional and bartering service for services is an open (illegal) enticement and most any professional competent of preparing your taxes likely won't reply for fear of losing his or her license . . . plus, you want / need a professional distance IMHO.

Some things are just better being paid for . . . do you really want a CPA or any other person holding "we've got more ___ to work off" over your head when your FREEDOM (you're the one ultimately liable - YOU sign the return) is at stake???? And, if you don't "do" EXACTLY what he wants you to "do", it will undoubtedly cause friction . . . is that the person you want to prepare your taxes (again, your FREEDOM [you're the one ultimately liable - YOU sign the return] is at stake)???? Personally, I wouldn't enter into a "barter" arrangement for anything related to this endeavor - keeping it "business" is cleaner, safer and easier in my experience. Why encourage ANY entanglement other than cash for services?

Better to pay a professional than $%#@ them, and possibly get $%#@ed in return, IMHO.

Kisses,

- Jackie

Being an escort or entertainer or a personal companion or assistant isn't an "illegal" trade under federal law or Texas law. As a self-employed person you'd need to file Schedule C. When you fill it out you're asked to choose a numeric descriptor from a list in the IRS's instructions to best describe your occupation. It's better to enter something than to leave it blank. It's also better to fit yourself, if you can, within the range of occupations we commonly think of as fee-for-services - e.g., modeling, plumbing, lawyering - as distinguished from those we commonly think of as being compensated on commission or tips (sales, auto body work, bartending/waiting tables). Just one fewer red flag when the computer "scores" your return. You get the idea.

A self-employed person also files Sched SE, which is the self-employment tax for Social Security and Medicare.

When you finally sign and file your return, you're affirming under penalty of perjury all entries that are material to determination of your tax. The most important of these, however, would be your gross receipts from trade or business. The tax law is clear that this means compensation received for which no 1099 form was issued to the IRS and the taxpayer (by the payor) as well as compensation for which there is a 1099. Deductions are often the subject of legitimate differences of opinion between taxpayers and the IRS, but it's never a good idea to fudge about gross receipts. Good luck.

Grace...that sounds strange to me as well. I've never heard of an agency being an "employer." They usually consider you a contractor and you're responsible for your own taxes. I would go back and make sure you filed correctly...so you don't get screwed in the end.

Jackie, the Queen Mayor of Sintropolis advises:

By the way, your advertising in another thread for a "hobby friendly" CPA or other professional and bartering service for services is an open (illegal) enticement and most any professional competent of preparing your taxes likely won't reply for fear of losing his or her license . . . plus, you want / need a professional distance IMHO.

Better to pay a professional than $%#@ them, and possibly get $%#@ed in return, IMHO.

First, let me say that Jackie's analysis of the topic is one of the most impressive things I've ever read on Eccie. And does she really look like that avatar? Then count me IN LOVE. (Or at least lust that is both physical and intellectual -- that's love, right?)

It's true -- a variety of laws are written in a way that can create a real philosopher's knot for providers. If you don't file returns or pay taxes, you're opening yourself to prosecution for tax evasion. If you provide false information on a tax return, you can be prosecuted for perjury. If you provide correct financial information but mischaracterize it as coming from another source, you can be prosecuted for money laundering. And if you're given "income verification" of any kind from an agency, you might even be subject to investigation and prosecution for violation of the anti-Mafia statutes known as the Racketeering Influenced Corrupt Organizations Act (or RICO, without the Puerto part).

So, it would be a good idea to get some competent professional help to work around these conundrums. But it would be a HORRIBLE idea to "entangle" yourself with either a tax adviser or a lawyer who is willing to trade for services. Just entering into that arrangement exposes BOTH you and the adviser to all the bad stuff, plus it compromises the adviser's ability to do the job correctly. JUST DON'T DO IT.

Jackie, the Queen Mayor of Sintropolis . . . Originally Posted by Stag

Oh, I got a good laugh out of that one . . . and, yes, I do look like my avatar, my Website has updated and accurate pictures. "Queen Mayor" . . . if only I were the Queen over all I survey . . . if so, what use would I have to be also Mayor? I'd delegate! Thank you for the compliment regarding my post . . . a lot of times I feel my advice "falls on deaf ears" (or "eyes" in this instance).

Kisses,

- Jackie

Stag- I too have been totally impressed by Jackie. Like her sig line says- never a disappointment.

There are number of ways I can see it being legal. Take a look at the porn industry manages to do it. It is all in how it is labelled. Personally I don't see the difference in getting paid to have sex on film or not on film. It doesn't take a stage to make an actor it takes an actor to make a stage.

So as at least one other person mentioned filling as an entertainer or independent contractor would probably be good enough. You have people who mow lawns for a living they do the same and countless other people.

Frankly the IRS isn't concerned as much how you got the money as much as they are concerned they get their part of it from what I seen.

If you want to make it look more legit you could start a DBA or LLC of some kind. I doubt it is needed and not sure if it will better you or make it harder. I would probably talk to a tax attorney or a financial advisor who specialises in the field.

very well put jackie and I will ad that as a provider in dallas we must look after each other if wewant to make this industry remain available to the well served gentlemen of our area

it is legal if we provide erotic sessions and tha is always what our clients agree to and I have never seen any one who requested sex or my time sex is illegal and my time is and i will never agree to see any one for sex that is why we have the boulavard in dallas because those girls are not worth mens time and we are this is why we are well respected in our communities and so on lol lololololol

^^^^Please get punctuation and grammar lessons. TY

I'm not a tax lawyer, but I do have a few providers as legal clients -- and no, I haven't heard of a W-2 from an agency before, either, but anything's possible. However, as long as you pay taxes, the IRS really doesn't care what you call your job. I've had clients who've reported that they were dancers, masseuses, independent contractors, and "consultants". None has ever been challenged, the IRS just doesn't care. They just want all your money. One of my provider legal clients has a hobbyist client who's an accountant, and he's been kind enough to confirm that to us.

Here is another tip, always mail-in your tax return instead of electronic filing. The IRS is far far less likely to audit a mailed-in return. I guess they are too lazy to dig through all the paperwork Just make sure to fill out your forms correctly and not have any red flags that would jump out. I'd very much recommend having them professionally prepared (i.e. H&R Block).