One of the most challenging clients that I have had to sit in front of me to prepare tax returns was a very attractive twenty-two year old young lady. Now that in itself is not strange, but when she started telling me about herself, that’s when the conversation took a turn.
This client was a “professional exotic dancer”, as she called herself. Her first question was, “do I have to report the money I receive while dancing?” In other words, the money that is “tucked” in her costume while dancing. She did not like the answer I gave which was obvious. She laughed and said that they were not paying her to dance, they were showing their appreciation for her talent. She felt that the money was more of a gift.
At that point, we began discussing deductions. She pulled out a list of items that she had purchased during the year. The list of items that she wanted to deduct read like catalog items from Victoria Secret and Fredrick’s of Hollywood. But the one that made me laugh was her $12,000 breast augmentation. Her exact words to me were, “this procedure has made me a more marketable employee”. She and I both had a laugh. And of course, all of the men in the office had their ears pointed our way.
After further discussion, I found out that she was working her way through college by dancing. Rather than being paid by W-2, she received a 1099-MISC for $75,000. I inquired about her “appreciation money” aka tips, and she estimated that she had received in approximately $500 per week.
We proceeded with the preparation of her return. She filed a Schedule C since she received the 1099-MISC and was hesitant but willing to include the tip monies. We claimed 75% of her costumes expenses (I figured that some of those purchases were personal). We also took a deduction for mileage driving to and from work since she was considered an independent contractor. But the breast augmentation could not be deducted as this was considered cosmetic surgery, she wasn’t happy with that.
Wonder if any of those onlookers claimed the “appreciation money” as tips or a business expense….huh!
This client was a “professional exotic dancer”, as she called herself. Her first question was, “do I have to report the money I receive while dancing?” In other words, the money that is “tucked” in her costume while dancing. She did not like the answer I gave which was obvious. She laughed and said that they were not paying her to dance, they were showing their appreciation for her talent. She felt that the money was more of a gift.
At that point, we began discussing deductions. She pulled out a list of items that she had purchased during the year. The list of items that she wanted to deduct read like catalog items from Victoria Secret and Fredrick’s of Hollywood. But the one that made me laugh was her $12,000 breast augmentation. Her exact words to me were, “this procedure has made me a more marketable employee”. She and I both had a laugh. And of course, all of the men in the office had their ears pointed our way.
After further discussion, I found out that she was working her way through college by dancing. Rather than being paid by W-2, she received a 1099-MISC for $75,000. I inquired about her “appreciation money” aka tips, and she estimated that she had received in approximately $500 per week.
We proceeded with the preparation of her return. She filed a Schedule C since she received the 1099-MISC and was hesitant but willing to include the tip monies. We claimed 75% of her costumes expenses (I figured that some of those purchases were personal). We also took a deduction for mileage driving to and from work since she was considered an independent contractor. But the breast augmentation could not be deducted as this was considered cosmetic surgery, she wasn’t happy with that.
Wonder if any of those onlookers claimed the “appreciation money” as tips or a business expense….huh!
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