Quote:
Originally Posted by zeejoe
JR, i say this with no malice (smart-assery, yes, malice, no), but if you go back and re-read the general tenor of the thread up until you 'departed' on your monologue, you will see that.....
you have confused:
with:
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You got it!
Both of those bastards (literally Obama is a BB) try to take our money; the pimp and Obama. I was afraid someone could not follow this.
No one has to pay a pimp. Everyone has to pay Obama (or the Government). No one wants to give the IRS everything, but they demand something. The big problems with making an earning in the hidden economy is that the better you are at your job, the more likely that one will get noticed. Just starting out, you can probably let a lot slip. When you buy a home, and start driving a nice car, get a bank account the time comes to explain to the IRS where you got the money.
The hobby is not organized as a business, in most cases it is cash that goes in someone's pocket. There are ways to make a certain amount of cash vanish into non-tracable assets. Sadly, when most people get ahead they want to brag about it and tell their friends about their success.
With cash in hand, there is always the problem of those who want to take it from you. By that, I mean both kinds of pimps.
Without records, no one knows if their business is truly profitable after expenses. (There is a thing called: two sets of books. Hush! )
Outside of yourself, your success is no one else's business. Why throw it away? Does one want to end up paying too much tax, penalties and possible prison because the elected to thumb their noses at the government and not file any taxes at all? Really: turn in something and pay some records with a set of records that can pass the IRS. With a cash business, they just don't know if you are making $5,000/year or $500,000 per year. But without a tax return and some type of documentation they will push for a high figure and hit you with the penalties for non payment.
File something! Keep two bank accounts. Deposit all earnings (and be careful if you elect to not to deposit everything - it may show up in how you live, because they have estimates - but they are only estimates) into the business account and have a payroll service issue payroll checks with the taxes withheld. The payroll checks are yours to spend. Business expenses: hotel bills, auto expense etc. can be paid as business expenses by check or a business credit card. (Legitimate people pay with credit cards.)
Not a corporation: OK report the income & expenses under schedule C. But show the cash flow in a business account.
For example:
This week, she earned $500 which was deposited to a business bank account, spent $100 for a room charged to a credit card & paid by the business account. She got a paycheck this week for $200 and deposited it to a personal account, that $150 went for groceries and house rent. $50 was sent to her lawyer from the business account as a retainer. $50 to the accountant from the business account.
Personal Account: + $50 (+ $200 payroll - $150 personal expense)
Business Account: +$100 (+ $500 - $200 payroll -$100 hotel -$50 -$50)
The $100 is still hers, but it should be kept for business expenses so they can be tracked. Does she need make-up and clothes for her job? Which is listed on her tax return as entertainer, personal consultant, etc. Well, be careful here but some will be acceptable.
The taxes will be figured on the $200, not the $500, as long as she keeps records and receipts.
Got it. She doesn't need a pimp. She is smart enough to handle her own money.
Surely, (and I am not calling you Shirley) there is someone else who understands basic accounting. These ladies are smart enough to handle their own money, she doesn't need a pimp that knocks her teeth out.
JR
Hey JR
My Bio Page - Colorado - Denver
