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Model
Floofie
Posts: 381
Portland, Oregon, US


I have recently found myself in a position to quit my second (very part-time job,) but simply not filing any income for 2013 scares me! I'm already a full-time model, so I'm also afraid of losing a large portion of my income due to heavy self-employment taxation. I know this is a public forum and the IRS could probably find it if they wanted, so I understand if you don't wish to divulge, but I'd love to know other models' experiences....

Please PM if you'd rather keep it private.

Do you pay taxes or do only under-the-table work? (This is for non-agency work of course.)
Feb 09 13 04:57 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


In the very unlikely event you were examined, and the IRS asked you to substantiate how you supported yourself with no income, how would you respond?

PS: always liked the modeling pseudonym wink
Feb 09 13 05:06 pm  Link  Quote 
Photographer
Good Egg Productions
Posts: 15,062
Orlando, Florida, US


I would hope for this thread to be mercy locked and hidden.

We do not discuss illegal activities on this site.
Feb 09 13 05:07 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


Good Egg Productions wrote:
I would hope for this thread to be mercy locked and hidden.

We do not discuss illegal activities on this site.

There is nothing illegal being discussed, yet. There are perfectly legal ways to avoid or mitigate taxes.

Chill.

Feb 09 13 05:08 pm  Link  Quote 
Photographer
johnreefphotography
Posts: 181
Washington, District of Columbia, US


As a good American citizen you are responsible for paying your fair share of taxes.
Feb 09 13 05:08 pm  Link  Quote 
Photographer
Good Egg Productions
Posts: 15,062
Orlando, Florida, US


Sophistocles wrote:

There is nothing illegal being discussed, yet. There are perfectly legal ways to avoid or mitigate taxes.

Chill.

And that's why I ask for a mercy lock and hide BEFORE that starts.

Feb 09 13 05:10 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


Good Egg Productions wrote:

And that's why I ask for a mercy lock and hide BEFORE that starts.

How so very gallant of you.

Feb 09 13 05:11 pm  Link  Quote 
Model
Floofie
Posts: 381
Portland, Oregon, US


my intent is to do the correct thing legally -
I make just enough to survive and not much more.
Feb 09 13 05:13 pm  Link  Quote 
Photographer
Jeffrey M Fletcher
Posts: 4,314
Asheville, North Carolina, US


There may be heavy expenses to offset much of that income, start keeping records of  those.

Whatever else you do, I would suggest not filing tax returns listing your occupation as "nude model" as that would be likely to increase chances of an audit.
Feb 09 13 05:15 pm  Link  Quote 
Model
Floofie
Posts: 381
Portland, Oregon, US


Sophistocles wrote:
In the very unlikely event you were examined, and the IRS asked you to substantiate how you supported yourself with no income, how would you respond?

PS: always liked the modeling pseudonym wink

And that is just it! Not a good position to be in...

Feb 09 13 05:15 pm  Link  Quote 
Photographer
Good Egg Productions
Posts: 15,062
Orlando, Florida, US


Floofie wrote:
my intent is to do the correct thing legally -
I make just enough to survive and not much more.

Even so, you will still have to report your income and file taxes for 2013.

Feb 09 13 05:15 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


Floofie wrote:
my intent is to do the correct thing legally -
I make just enough to survive and not much more.

Then you may likely find your tax liability, even contemplating the self employment burden, to be below the threshold that would concern you.

Simulate a return for 2013 based on what you think you will earn. Don't speculate, simulate.

Feb 09 13 05:16 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


Good Egg Productions wrote:

Even so, you will still have to report your income and file taxes for 2013.

Not if her income is below the reportable threshold. Stop guessing.

Feb 09 13 05:17 pm  Link  Quote 
Model
Floofie
Posts: 381
Portland, Oregon, US


Sophistocles wrote:
PS: always liked the modeling pseudonym wink

Oh! And thank you smile

Feb 09 13 05:18 pm  Link  Quote 
Photographer
Ken Marcus Studios
Posts: 8,415
Los Angeles, California, US


If you wish to follow in the footsteps of many of the successful models on MM, I suggest the following:

Get an Accountant - nobody's advice will be better when it comes to taxes

Become Incorporated - this will allow you to take advantage of all the legal opportunities to pay minimal taxes

KM
Feb 09 13 05:19 pm  Link  Quote 
Model
angel emily
Posts: 1,020
Boston, Massachusetts, US


Feb 09 13 05:19 pm  Link  Quote 
Photographer
Nick Falana
Posts: 16
Los Angeles, California, US


file as a business not an individual.
Feb 09 13 05:21 pm  Link  Quote 
Photographer
Cool Hand Mike
Posts: 580
Tequesta, Florida, US


Feb 09 13 05:31 pm  Link  Quote 
Photographer
J O H N A L L A N
Posts: 9,727
Santa Ana, California, US


Good Egg Productions wrote:
Even so, you will still have to report your income and file taxes for 2013.
Sophistocles wrote:
Not if her income is below the reportable threshold. Stop guessing.

Yep stop guessing, if it nets out below the reportable threshold the IRS would prefer you not file.

Feb 09 13 06:02 pm  Link  Quote 
Photographer
J O H N A L L A N
Posts: 9,727
Santa Ana, California, US


Ken Marcus Studios wrote:
If you wish to follow in the footsteps of many of the successful models on MM, I suggest the following:

Get an Accountant - nobody's advice will be better when it comes to taxes

Become Incorporated - this will allow you to take advantage of all the legal opportunities to pay minimal taxes

KM

And this above. And upon doing this, a tax attorney vs simply a CPA is the way to go, because privilege attaches and they can be more aggressive in your best interest. Also if a tax attorney (who can then defend your stance legally), prepares your taxes, the IRS is much less apt to challenge it. The IRS is like any predator, in that they are going to pick on the weakest. They aren't as interested in an uphill legal battle they'll likely loose, unless there is millions involved.

Feb 09 13 06:04 pm  Link  Quote 
Photographer
Farenell Photography
Posts: 17,846
Albany, New York, US


e m i l y wrote:
Here's a great thread: http://www.modelmayhem.com/po.php?thread_id=270069

This x 1000.

Not to mention, she is a CPA & can speak w/ some authority about the issue.

Feb 09 13 06:06 pm  Link  Quote 
Photographer
MC Photo
Posts: 4,144
New York, New York, US


Ken Marcus Studios wrote:
If you wish to follow in the footsteps of many of the successful models on MM, I suggest the following:

Get an Accountant - nobody's advice will be better when it comes to taxes

Become Incorporated - this will allow you to take advantage of all the legal opportunities to pay minimal taxes

KM

There's nothing that you can legally deduct as a corporation that you can not deduct as an individual. Incorporating is for liability not taxes.

This is such a well known fact that any tax lawyer will unhesitatingly tell you this instantly. I've discussed this multiple times with multiple tax lawyers, trying to find the magic angle that so many people believe exists. The answer to  every question "What about __________?" "How about ____________?" gets the same answer"  "There's nothing that you can legally deduct as a corporation that you can not deduct as an individual."


The explanation for why people believe that is speculated as better accounting due to requirements of certain types of corporations so that people are taking all of the deductions that they had always been legally entitled to and that they are attributing it to the wrong cause.

Or that they are illegally deducting personal expenses by attributing ownership of personal property to corporation or not reporting personal use of something owned by the corporation. It is always easier to cheat on your taxes when you're incorporated, but cheating is cheating.

Feb 09 13 06:18 pm  Link  Quote 
Photographer
MC Photo
Posts: 4,144
New York, New York, US


DTF Down To Foto wrote:
file as a business not an individual.

It makes no difference.

Feb 09 13 06:19 pm  Link  Quote 
Photographer
DBIphotography Toronto
Posts: 3,141
Toronto, Ontario, Canada


Jeffrey M Fletcher wrote:
There may be heavy expenses to offset much of that income, start keeping records of  those.

+1

Sometimes when I'm in malls I shop at often already, I find cash-paid receipts for items I'd forgotten I'd bought. And forgot where I put the item. But hey, I've got the receipt - so I can claim it as an expense of one type or another wink  I should get a bag or whatever to hold all these receipts I lose, but then I fear I'd lose that hmm  Being self-employed and/or running a sole-proprietorship (in the first few years especially!) is a tough go. Jeffrey stated my first thought, regarding getting your tax-situation more in-order big_smile

Ken Marcus Studios wrote:
If you wish to follow in the footsteps of many of the successful models on MM, I suggest the following:

Get an Accountant - nobody's advice will be better when it comes to taxes

Become Incorporated - this will allow you to take advantage of all the legal opportunities to pay minimal taxes

KM

+1

IMHO alone;

Ðanny
http://www.dbiphotography.com (Blog On Site) 

Feb 09 13 06:22 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


There is one thing you can deduct as a corporation that you cannot deduct as an individual: incorporation fees.

You owe me a donut wink
Feb 09 13 06:27 pm  Link  Quote 
Photographer
MC Photo
Posts: 4,144
New York, New York, US


Floofie wrote:
I have recently found myself in a position to quit my second (very part-time job,) but simply not filing any income for 2013 scares me! I'm already a full-time model, so I'm also afraid of losing a large portion of my income due to heavy self-employment taxation. I know this is a public forum and the IRS could probably find it if they wanted, so I understand if you don't wish to divulge, but I'd love to know other models' experiences....

Please PM if you'd rather keep it private.

Do you pay taxes or do only under-the-table work? (This is for non-agency work of course.)

It's really only that you pay both halves of social security instead of just half.


Whether you file or not, doesn't change whether or not you owe taxes. In a year you have a certain gross, certain deductions which create an adjusted gross that you pay taxes on. You have a legal obligation to declare all income. So when you work as a contractor and the company or individual pays you less than $600 in a year, they don't have to give you a 1099, but you are still obligated to report what they paid you. If they pay you more than $600 and don't send you a 1099, you're still obligated to report.

So every year, your taxes are what they are whether you like it or not.

If at some point years from now, your income changed, or you were married and you ended up audited and they asked you about 2013 and you hadn't filed, you'd still have to show them the paper trail of your income for the year and justification of why you believed you owed no taxes and didn't file.

Assuming that you had no obligation to pay or file, I'd be surprised if you didn't find it much harder to supply the information years after the fact if you hadn't done the required accounting in 2014 for the year 2013. So while there may be no need to pay or file, there will always be the need to document.

Now, if you've done the accounting and have everything documented, copying a few numbers to a tax return is pretty minimal work.


Let's suppose you make an aggressive effort to be honest and come to the conclusion that you don't need to file in 2013, but in 2017 end up audited. Maybe a business partner does something shady and it gets you audited. How does it look that you haven't filed for 2013? How does it look if they subpoena records and find a genuinely accidental mistake, in the context of investigating something genuinely dishonest? It makes it seem less likely that you had nothing to do with the issue in 2017, even if you didn't.

When you do what's necessary to be honest with your taxes, the filing part is very easy, so why not do it? If you're going to be dishonest, than you're being dishonest whether you file or not, but I think you'd probably be better off in the long run if you'd filed than established a questionable pattern.


See if you can find an accountant to do a trade shoot with, even if it's just to teach you conceptually what you can and can't deduct and what creates a paper trail.

If you had a bank account with two separate debit cards, one business and one personal, and paid for everything with those cards, you'd have most of the work done within your bank statements.

Or, open a business account under a DBA as your modeling name, and deposit 100% of your income in that account. Then pay all of your business expenses from that account and transfer money to a personal account for personal expenses.

If you were that rigid about it, you'd just look at the total deposit, minus everything that left the account excluding transfers to the personal account and that's what you'd pay taxes on.

Feb 09 13 06:46 pm  Link  Quote 
Photographer
MC Photo
Posts: 4,144
New York, New York, US


Sophistocles wrote:
There is one thing you can deduct as a corporation that you cannot deduct as an individual: incorporation fees.

You owe me a donut wink

Technically, that's incorrect. You can deduct them as an individual, you just don't have them as an individual. It's not a deduction that's legal for corporations only.

Feb 09 13 06:48 pm  Link  Quote 
Photographer
Andrew Thomas Evans
Posts: 23,840
Minneapolis, Minnesota, US


John Allan wrote:
The IRS is like any predator, in that they are going to pick on the weakest. They aren't as interested in an uphill legal battle they'll likely loose, unless there is millions involved.

I'd say that's true also for state income tax, now sales tax (if the OP has a tax ID) is a totally different deal sometime. MN audited a lot of artists a few years back, was annoying, learned a lot, and didn't pay much, but it was annoying. Again, wouldn't apply to the OP, but never know when a state needs more money and who they turn to for that money.

There is some good advice in this thread, and a lot of great ideas, and I think their next step soon should be to talk with a tax professional that works with artists who can help them set something up or give them some advice for their area.




Andrew Thomas Evans
www.andrewthomasevans.com

Feb 09 13 06:49 pm  Link  Quote 
Photographer
THE IMAGE EDGE
Posts: 56
Portland, Oregon, US


Talk to an OREGON tax service/accountant to be SURE!!
Feb 09 13 06:59 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


MC Photo wrote:

Technically, that's incorrect. You can deduct them as an individual, you just don't have them as an individual. It's not a deduction that's legal for corporations only.

But if you have them, you're no longer an individual.

I can't deduct the fees my LLC paid on my personal taxes (non pass through). And I can't personally pay them for the LLC, unreimbursed.

Right?

Feb 09 13 07:09 pm  Link  Quote 
Photographer
Cherrystone
Posts: 35,962
Columbus, Ohio, US


Sophistocles wrote:
Not if her income is below the reportable threshold. Stop guessing.

Ummmm, self employed income threshold to file isn't enough to feed a cat in a year so.......he ain't guessing.

Feb 09 13 07:19 pm  Link  Quote 
Photographer
David Parsons
Posts: 972
Quincy, Massachusetts, US


Floofie wrote:
my intent is to do the correct thing legally -

If that is true, then you will pay taxes.  Talk to a CPA for qualified advice.

Feb 09 13 07:27 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


Small Fruit Pits wrote:

Ummmm, self employed income threshold to file isn't enough to feed a cat in a year so.......he ain't guessing.

Depends on the cat. And who gifts the cat with food.

Guessing.

Feb 09 13 07:28 pm  Link  Quote 
Photographer
Cherrystone
Posts: 35,962
Columbus, Ohio, US


Sophistocles wrote:

Depends on the cat. And who gifts the cat with food.

Guessing.

At a $400 a year income threshold to file.......not a guess.

Feb 09 13 07:31 pm  Link  Quote 
Photographer
Cherrystone
Posts: 35,962
Columbus, Ohio, US


Floofie wrote:
Do you pay taxes or do only under-the-table work? (This is for non-agency work of course.)

I can guarantee you that there are a number of models making a decent income that skip a return.

I can also guarantee you from past experience, that if the IRS gets wind of you....well, I'd rather have the FBI and the DOJ crawl up my ass than the IRS.
At least with the former you get due process. IRS kinda plays by their own rules.

Does anyone ever get pissed off at you, even if they are a nutcase, who might guess you're skipping out? It only takes one phone call to get the ball rolling, and the reporter gets a percentage for ratting you out.

Though I prevailed both times with them, I'd rather get tossed in a cage with wild hungry animals than relive that again, IMHO.

Feb 09 13 07:36 pm  Link  Quote 
Photographer
Reel Avenue
Posts: 540
Los Angeles, California, US


Just sent you and email.
Feb 09 13 07:39 pm  Link  Quote 
Photographer
A-M-P
Posts: 17,908
Orlando, Florida, US


I am self employed and payed self employment tax this year It was taken from  the credits they awarded me and even got back a refund I was pleasantly  surprised. I did filed as head of household. Unless you are making over 20k with your freelance modeling I wouldn't worry too much you might not pay much at the end of the year after deductions.
Feb 09 13 07:39 pm  Link  Quote 
Photographer
Shy L
Posts: 584
Burlington, Vermont, US


Small Fruit Pits wrote:
At a $400 a year income threshold to file.......not a guess.

Actually it's almost $10k a year before you have to file if you are filing single under 65.  Even higher for older people, joint returns, head of household, and widow(er).

Feb 09 13 07:42 pm  Link  Quote 
Photographer
Sophistocles
Posts: 21,320
Seattle, Washington, US


Shy L wrote:
Actually it's almost $10k a year before you have to file if you are filing single under 65.  Even higher for older people, joint returns, head of household, and widow(er).

Shhhh! Don't let facts spoil the fun!

It depends on where the income comes from. If she properly avoids being self employed, and there are legal ways to do that, it is much more than $400.

Again, tons of variables and even more guessing.

I'll leave this here. http://www.irs.gov/Individuals/Do-You-N … Tax-Return

If, for example, she treats modeling as a hobby and has, say, a generous boyfriend... Well, heck, life can be downright comfortable.

Feb 09 13 07:47 pm  Link  Quote 
Photographer
Image Works Photography
Posts: 2,890
Orlando, Florida, US


To op- if you don't put down any dependents then yes you will pay. Its setup in a way that if your single with no dependent you still pay taxes even with below middle class income. I advice to set money aside during the year.
Feb 09 13 10:24 pm  Link  Quote 
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