Tax Prep: Be Thinking Ahead on What You’ll Owe
When I started escorting full-time a couple of years ago, I started paying off a lot of bad debt that I accumulated. I started to actually answer phone calls from bill collectors that I used to dodge. It felt great. I finally had some money in savings, had tons of spending money and paid all my bills on time for the first time ever.
In 2012, I decided to keep track of my earnings both out of curiosity and because someone said it may be a good idea for tax purposes. I kinda laughed at the idea. I spent so much time trying to steer clear of the law, I couldn’t really think I would be able to just go right up and tell them about all this money.
Turns out, you can. See, the IRS doesn’t really care what you do as long as you file (and pay) your taxes. Al Capone, one of the most famous mobsters in history, wasn’t nailed for murder or theft or any of the many illegal things he was accused of doing. He was charged with tax evasion! Being an escort, I’m paid for time, not sex. So, if they can’t get me for prostitution, then where do you think they’ll hit me? Yup. When asked for a “job code” explaining what I did, I typed in “escort” out of curiosity. When it searched for the term, TurboTax popped out “all other personal services” which is an IRS accepted category.
Fast forward to April 2013 and I realized that I didn’t have nearly enough in savings to cover my (really) high tax bill. Yes, y’all. This boy was BUSY.
I started reading posts on TurboTax and I learned that you can deduct several things as a “self-employed individual.”Things like cell phone service if you added minutes or added a second line for client calls; all those months of paid memberships to ad sites like Rentboy and Rentmen. I deducted hotel rooms, travel costs, business cards and some miscellaneous office supplies like toys and a massage table. It helps to keep receipts on all these things, but for larger purchases like airfare and hotels, a credit card or bank statement could work in the face of an audit. With all the deductions I took, I lowered my bill by several thousand dollars.
This year, a friend recommended I pay quarterly taxes with the IRS online. It calculates your estimated taxes owed every three months based on the previous year’s earnings. At the end of the year, your tax bill will turn out to be significantly less or, even better, you could get a return from it.
One of the biggest benefits to filing has been being able to show proof of a much higher income. This will come in handy when I’m looking for an apartment next year and they want to see how much I’ve earned. Again, it doesn’t say I’m an escort, so no red flags there!
We are all entrepreneurs and aside from staying healthy, safe and strong for our clients, we need to stay legal. Which means, PAY YOUR TAXES! Even after April 15 with the IRS, it’s always better late than never.