Serious questions about tax filing for SP's!

[OriannaXO]

So I was encouraged to speak to one sp in particular by another lovely sp on here when I had a question about filling taxes. This is my first thread started but its questions that I would gratefully accept any answers too.

I am coming up on my first year filing taxes for my job here, and with receipts in hand I'm wondering what job description to even file under if not the position of sp? I am also not sure about what qualifies as a write off exactly besides some of the obvious like hair, nails, etc. however I have wondered about maybe a specific person that usually helps sp's file who is discreet and knows all the answers for deductions or how much is deducted and what I pay in the end for my taxes. Or if anyone has any information at all even, I might not even know some of the questions I should ask!

Thanks in advance

Orianna, xo

P.S I'm also hoping to keep the comments here rather then being pm'd so that any other escorts can access any info provided

 

[ReluctantPooner]

Damnit, I had a big reply for you, but then hit the wrong button. Anyways, as for an accountant - find someone who is experienced with self employment, whether its home based or otherwise. As for someone who is understanding of your job or industry, I cannot help you.
There are many things you can write off. Do you have a cell phone that is just for this job? Then it should be a write off. If you have a phone that is partly personal and partly for the job - then a certain percentage is a write off.
Do you have a seperate incall that you use just for the business? Then the entire rent and any other expenses related to it is a write off! If you work out of your own home, then you need to determine what percentage of your home is used for business ( I think the max is 30%). Do you spend money on laundry to clean all of those sheets/towels/work clothes? Write offs, if you have receipts. Do you buy clothes and or lingerie just for the job? - write offs. Hell, I would say any condoms and lube you buy for the job are a write off - cost of doing business. Do you have a website for your business? That would be a write off!! Hopefully you have kept any and all receipts, or printed off the ones you get online. If you are a paid advertiser here under some other name - it would be a write off.

I hope that helps!

 

[dunnochit]

Over the years my friends in the biz have used entertainer, actress, massage therapist, spiritualist, body care specialist etc... as job titles. If you treat what you do as a business, you are eligible for the same tax deductions as any self employed person. You could actually go as far as to setup a DBA company, get an HST number, setup a bank account, pay yourself a salary, pay into CPP and UI. There are quite a few bean counters in Van that would be very happy to set this up.
JMHO
D

 

[FunSugarDaddy]

All pretty much correct except the salary part.

You'd have to be incorporated to pay yourself a salary.

Major issue to consider is what's your 3-5 year goal?

If it's to perhaps buy a condo then you should have sufficient income to support the debt ratio you desire. Essentially the banks usually allow for up to 32% of your gross income towards servicing your mortgage debt, and a total debt servicing limit of 40%.

Might also want to check your credit rating every year or two to ensure nothing funky is going on with that.

Back to the condo idea, if that is your plan, then you might also want to sock money into your RRSP's as they both reduce your taxes, and up to 25K can be used towards a downpayment if your a first time homeowner, or otherwise qualified. RRSP's can also be withdrawn to futher secondary education as well.

Over the years my friends in the biz have used entertainer, actress, massage therapist, spiritualist, body care specialist etc... as job titles. If you treat what you do as a business, you are eligible for the same tax deductions as any self employed person. You could actually go as far as to setup a DBA company, get an HST number, setup a bank account, pay yourself a salary, pay into CPP and UI. There are quite a few bean counters in Van that would be very happy to set this up.
JMHO
D

 

[susi]

you could file as an entertainer. this makes costumes, body upkeep(gym tanning), makeup, props(toys),etc deductible. this also protects you from an "escort" tax return outing you by mistake later on.

you can find info here;

http://tradesecretsguide.blogspot.com/search/label/Our Businesses

i also recommend hiring an sp friendly accountant.... accountants rock!!!

love susieXXXO

 

[FunSugarDaddy]

I've read some of these deductions and if you ask me some of them are extremely iffy.

Items such as jewellery and clothing are extremely unlikely to be deductible. AFAIK, the only clothing CRA allows to be deducted are those specific to a company, such as someone wearing a suit with a Remax label on it, otherwise no go. Jewellery, not sure there's really any circumstance that this would be allowed.

Make-up and hair cuts are also extremely iffy, because people get or wear these regardless of whether or not they are self employed and there's no tangible way to distinquish what's personal and what's business related. I suppose if someone wanted to deduct say 40-50% of the make-up they purchase that would at least be an presentable argument.

Ultimately I guess it depends on how aggressive one wishes to be.

you could file as an entertainer. this makes costumes, body upkeep(gym tanning), makeup, props(toys),etc deductible. this also protects you from an "escort" tax return outing you by mistake later on.

you can find info here;

http://tradesecretsguide.blogspot.com/search/label/Our Businesses

i also recommend hiring an sp friendly accountant.... accountants rock!!!

love susieXXXO

 

[badbadboy]

Don't you also have to be licensed as an escort in the area you are working?

I am fuzzy on the details but I spoke to a SP in another city who was licensed there, fully deducted her rental in-call, had a full time paid employee with all those expenses as part of her deductions. Pretty sure she said her tax return stated she was an 'escort'.

 

[MissJasmine]

Hiring a good accountant is important. What you want to call yourself is up to you but entertainer, escort, artist and psychics all fall under the same industry code if I remember correctly. I wouldn't bother incorporating in the beginning as the paperwork involved is a headache...never again

Here is a list of basic business expenses provided by revenue Canada: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.htm

The most important thing to remember when using a receipt for deductions is to ask yourself... was this for business? If not entirely then what percentage?

Examples: I buy a pair of $200 jeans and a $300 latex dress. I won't claim the jeans but claim the dress because I exclusively wear it for work. I buy a box of condoms for $6 and use half with clients and the other half with my boyfriend, so I claim a $3 expense

With larger purchases such as a computer/car/condo you must claim capital cost allowance. Deductions I have used include rent, mortgage, hotels, airfare, advertising, internet, utilities, web hosting, phones, electronics, clothing, meals (only when I travel), car payments, taxis, sex toys. Stuff I don't write off is hair makeup or nails UNLESS I have paid photo or video shoot to back it up.

Revenue Canada puts on free, all day information small workshops every week and I highly suggest anyone with a small business to go: http://www.cra-arc.gc.ca/vnts/bc/bc_gst-eng.html I went last year and I'll be going again with my own list of questions.

Hope this helps

 

[whoisjohngalt]

Following is a link to the Canada Revenue Agency Interpretation Bulletin dealing with self employed performing artists and entertainers, which would probably be the closest thing to an SP. It discusses what may and may not be deducted. You will note that wardrobe used solely for "performances" is deductible as long as there is no enduring personal benefit (i.e. you don't use the wardrobe for personal use).

http://www.cra-arc.gc.ca/E/pub/tp/it525r-consolid/it525r-consolid-e.html#P90_10592

Feel free to PM me if you would like more information.

 

[OriannaXO]

This is so perfect!!! I really appreciate all the replies and information and know more then just I will benefit from this, but I will for sure. Feel free to keep adding anyone, there is no information that is insignificant to me

And you're right Badbadboy, we do all need and have licenses I'm meeting with the new by law officer today about mine

Yayy

 

[susi]

just to remember,you do not have to have a license to file your taxes. getting an escort license can be a problem later in life if you want to change professions or don't want people to know what you do.

remember, personal information about all business license holders, including escort, such as business onwers name,business adress,etc. are public and easily accessible online or through freedom of information.

just a caution.

love susieXXXO

 

[MissJasmine]

And you're right Badbadboy, we do all need and have licenses I'm meeting with the new by law officer today about mine

Yayy

The license is municipal and tax is federal... although an sp could hypothetically get in trouble for not having one in her city (don't see this happening in Vancouver anytime soon) it will not likely affect where you stand with revenue canada, except that you can write off that licence fee.

 

[lenny]

Do you declare your income Susie? Do you write off a myriad of bogus expenses like the ones listed above? What percentage of your tan is business and personal? Same with your toys.

6-up. LE across the street.

 

[Easter]

(new to this forum)

I am a licensed accountant who has been handling the affairs of sp's and madame's for many years.

(Yes, I understand the nature of the business so I ask only the necessary questions and assist accordingly.)

Please send along a pm and I am more than happy to help you out.

 

[OriannaXO]

Do you declare your income Susie? Do you write off a myriad of bogus expenses like the ones listed above? What percentage of your tan is business and personal? Same with your toys.

Please don't be rude or insinuating, this thread is intended for information regarding how to file taxes and not an interogation into any SP's personal habits of filing.

Also thanks for offering your services as a tax attorney to me! I think I will take the women's advice this year and file with a female just because its a very personal matter, sort of akin to seeing a gyno for me, my finances are. However next year if this one doesnt work out I will re post asking if anyone on the board here offers the tax attorney services and see about signing up with a male. That being said some ladies might like to use your services here this year so still feel free to post that you're availiable for any of them

I still have my pen and paper out for anyone else has any advice or tidbits

 

[wilde]

I do have one crucial advice for you. If you are doing the right thing by filing your taxes, make sure you report ALL your income. I used to have an SP friend who decided to report SOME of her income, I am guessing she needed to show some income for a loan or something. Well, she got audited by the CRA or Revenue Canada back then and she was eventually assessed with a much heavier tax bill plus interest and penalty. Shortly thereafter she had to declare bankruptcy.

Find a competent accountant who is comfortable with what you do for a living and be honest. Miss Jasmine has some good points but I would not under any circumstances claim CCA or property taxes on your condo because you run the risk of losing the principle residence exemption when you sell later. Just claim a reasonable portion (e.g. square footage used for business over total square footage of the condo) of your incidental condo expenses such as strata fees, insurance, hydro, gas and utilities.

 

[wilde]

An additional point, you may also set yourself up for a GST/HST audit if you have over $30K of income in any given year and you are not registered for GST/HST. This is a fairly common trap for self-employed people.

 

[OriannaXO]

Thats really interesting, thank you

 

[susi]

Do you declare your income Susie? Do you write off a myriad of bogus expenses like the ones listed above? What percentage of your tan is business and personal? Same with your toys.

yes i file,i don't tan so no don't write it off, i only use toys at work so 100%...if i actually buy them..many of mine were gifts...but ya, not much use for a strap on and harness outside of work...or a huge dildo that suction cups to the wall...i prefer the real thing for recreation....

these are not bogus expenses and add up.i do not wear stripper heels in my regular day to day life but need them for work at $100 a pair.

why is gym expense bogus? athletes write it off? our job requires fitness and flexibility....

i wear very different make up at work compared to in regular life as well as oils, cream for massage, towels,sheets, laundry soap to do the never ending sheets and towels.... i don't need all these sheets and towels. they are 100% for work.

1/3 of my rent, hydro,cable and internet...as a home based business.

susie

 

[susi]

6-up. LE across the street.

sweet!! just like alinnburnaby said...not too worried so...do your worst LE!!!

love susieXXXO