Hi guys! Welcome to my first installment of my stripper finance series. I like to call it the financial diet for CE-HOES. I’m here to help you work out your finances as an entrepreneur and make the most of your stripper cash! If you’ve been working in the adult industry for a few months you might have noticed there’s not a huge amount of help out there for dancers who need to record an income for all sorts of reasons, like renting homes! I’m here to help you work that out, and tell you how to make the most of your tax return as a dancer. At the end of this post I will also provide a link to a free-to-download form that can help you remember what receipts to save to make the most of your deductibles.
I came by this knowledge because I have background in financial journalism, and before I became a full-time hoe I ran my own journalism business as a freelancer for five years. I then worked as a researcher for a higher education consultancy company, where we created accounting and financial degrees for universities across Australia. I also have a passion for finance, research and business. So without further ado, let’s sort out your stripper taxes!
HOW DOES THE TAX MAN DEAL WITH HOES?
A stripper or dancer is defined as a sole trader or independent contractor because we do not earn a wage, and we do not typically employ others to maintain our business.
Before becoming a dancer in Australia you will need to create an ABN – An Australian business number. If you are American and plan to claim tax you will need to contact the IRS and research whether or not you need to register a business as a sole trader. Creating an ABN will NEVER cost you money, make sure you’re using government websites to register yours.
The reason you need an ABN – or other taxation identification – is because without one, any money placed into your bank you would then owe half of to the government. With an ABN you simply calculate your earnings within one tax year to work out what your tax bill would be according to your financial threshold. If you are under a certain amount of earnings you may be placed in an income bracket that gives you a lower tax bracket or none at all.
Banking your money is important because it legitimizes your business and helps you apply for rent, credit cards, home loans and other important stuff. It also teaches you valuable business and accounting skills if you plan to keep hustling into other industries.
Usually anyone with an income under $20,000 per tax year won’t pay any tax, although this varies between states and countries and industries so again, you will have to contact your national tax agency to check up on tax thresholds. Australian residents can check the following link to see where they fall in the bracket:
WHAT YOU NEED TO KEEP A RECORD OF:
*Receipts for deductible expenses – we’ll get there in a second
*Receipts for cash deposits into your bank
*Receipts for bPay or online deposits – I keep all my paypal and MFC receipts in a folder
WHAT CAN YOU CLAIM BACK?
This information is surprisingly easy to find. A quick google search for ‘taxable expenses for strippers’ led me to the ATO’s list of approved work-related expenses. So, here’s what you can claim:
- Child care
- Clothing – specifically costumes, pole shoes, and lingerie. You can’t deduct other clothing, but lingerie and costumes for stage shows will have you in the clear
- Consumables – full service sex workers can claim for consumables like lubricant, but this doesn’t really apply to strippers.
- Cosmetics – There are certain brands of cosmetics that count as stage makeup available in department stores – like Kryolan – but there are some brands that aren’t considered stage makeup and therefore you can’t claim as a business expense. A makeup artists own brand is more likely to be considered professional-grade and thus taxable than general drugstore makeup. However it’s always necessary to check.
- Fitness – You CANNOT claim your general gym membership back, but you CAN claim dance classes, circus classes, and anything that introduces a new skill solely for your business. So keep those pole and aerial silk receipts girls!
- Advice – you can claim back any costs incurring by referring to a tax agent for business or legal advice. You may also claim deductions for costs preparing tax returns.
- If you use a phone to operate your business or advertise you can also claim a percentage of your phone bill back. The link in the description will take you to an ATO webpage that details how to claim back percentages of phone bills, and also offers further advice to strippers and full service sex workers!
- Transport – if you travel different places for work – i.e if you drive or taxi or ‘uber to private functions as a stripper hired out by a company you may be able to deduct these, so always keep a receipt!
- ATO LINK: https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Deductions-for-specific-industries-and-occupations/Adult-industry-workers—claiming-work-related-expenses/
- IRS: https://www.irs.gov/businesses/small-businesses-self-employed/sole-proprietorships
- AUSTRALIAN TAX CALCULATOR: https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=STC&anchor=STC#STC/report
- USA TAX CALCULATOR: https://www.irs.gov/individuals/irs-withholding-calculator
YOUR FREE DOWNLOADABLE:
TAX DEDUCTIBLE CHEAT SHEET – click to download or save below.