The Magic Café
Username:
Password:
[ Lost Password ]
  [ Forgot Username ]
The Magic Cafe Forum Index » » Tricky business » » A Little Thing Called Tax (0 Likes) Printer Friendly Version

NJJ
View Profile
Inner circle
6439 Posts

Profile of NJJ
Without dumping yourself in trouble with your local tax office, (IRS, ATO etc.) what is your policy on cash in hand work and claiming your income?

Perhaps you could refer to "a friend of yours who..."

For the record, I claim every last cent I get with the exception of small tips (under $10.00 and gifts.) but 'a friend of mine' doesn't claim MORE THAN HALF!!!

So what do your friends do? Smile
Salazar Magic
View Profile
Veteran user
New Jersey
344 Posts

Profile of Salazar Magic
My friend only claims if he's sent a 1099 Misc. form.
Chrystal
View Profile
Inner circle
Canada/France
1552 Posts

Profile of Chrystal
Hi Nicholas,

Wow! I find it pretty ironic to see your post on the very subject that's been on my mind. Ironically, I was audited by the tax people and had an appointment with them just yesterday. Funny enough, I called them.. as I had recieved both a letter stating I was owed money and one that I needed to pay. Neither amount was very large but thought I'd be honest.

Once in the office with a stack of papers in my hand, they went through all my taxes dating back to '98. The woman looked concerned and said I need to ask the supervisor about this... there is something wrong. My hands were sweaty and my stomach was in turmoil. Worse they closed the door so I can't hear what's being said.

She comes back and looks over her shoulder at the other people in the cubicles around us. She states what she is about to tell me is very important... and she needs to whisper. I lean closer.. but couldn't hear what she said. I asked her to repeat it. She pushes the tissue box my way... and says there has been a mistake on your files due to some computer glitch which had been skipping a line on my tax forms for some odd reason. She tells me the amount... I reach for the tissue box as tears are starting to flow.

THEY OWED ME!!! I won't say the amount but it was large enough so they don't want to send it to my home but directly into my account. I can buy a new car!!!

So, I'm thinking ...perhaps honesty is the best policy always.

>>> Smile Smile Smile
Jim Snack
View Profile
Inner circle
1338 Posts

Profile of Jim Snack
A musician friend once told me that there are two very important rules regarding reporting income taxes that you should never violate:

1) Never, ever cheat on your taxes, and

2) If you do cheat on your taxes, never, ever tell anyone!

Seriously, honesty is the best policy. If you don't accurately track your income and expenses, it is difficult, if not impossible, to do an annual strategic business plan.

I've always kept accurate books and when the IRS audited me in 1986, I had no problems. They took one look at my books and realized immediately that I wasn't hiding anything. After about a hour of going over the books, they wanted to see some magic. I spent most of the time entertaining them with card tricks!

When starting out, most magicians operate as a sole proprietor and report income on Schedule C on their federal income tax form. After your business reaches a certain gross income level it makes better sense to operate as a Sub-Chapter S corporation. Check with an experienced small business accountant for specifics.
Jim Snack

"Helping Magicians Succeed with Downloadable Resources"
www.success-in-magic.com
NJJ
View Profile
Inner circle
6439 Posts

Profile of NJJ
Jim,
I live in Australia where we have a different system.


My brother (a clown and street theatre performer working with animatronics) tracks every last piece of income and claims every last expense. If a movie has animatronics in it, he makes a claim. He claims his gym membership. He claims most of his rent because his whole house is full of equipment.

In the end, he appears to make very little money but really does quite well.
Jim Davis
View Profile
Special user
What is....? Utah
945 Posts

Profile of Jim Davis
Nicholas, I too agree that honesty is the best policy.

I have always declared every penny I earn, but in return claim every expence, including every book, trick, prop, tools to create props, and the room in my house in which I store all my props, and practice in.

If you can plan, like Jim Snack spoke of above, then you will be able to about make a balance of it.

In fact I got audited this year, and when I had my appointment, I too was surprised to find out that they owed me $600.00

I don't know the laws "down under" but every government wants it's share of the pie and will take it one way or another. If you honestly give it to them, what then can they say to you?
Diamond Jim Davis "The Cardslinger" ~~~ Magic from the '80's....................the 1880's!
<BR><BR>
<BR><BR>Don't just be a magician, be a human interest!
<BR><BR>
<BR><BR>[url]www.periodplayers.com[/ur
Chrystal
View Profile
Inner circle
Canada/France
1552 Posts

Profile of Chrystal
Here's another food for thought on why it's always best to be honest.

If you were to decide to make a large purchase like that or home or car...you would be kicking yourself if you had earlier "fudged" on telling the truth.

Jim is right too, as you can declare so many things as "business expense". Deductions off your car, space in your home or apt...conventions..ect..the list is endless.
Lee Darrow
View Profile
V.I.P.
Chicago, IL USA
3588 Posts

Profile of Lee Darrow
In the USA, if it goes in the bank, it is trackable by the Internal Revenue Service.

Plain and Simple.

So declare anything you make. Even barter income is reportable and should be as the IRS tends to track that, too, especially if you belong to a barter club.

Keep track of everything that you spend even remotely related to your business, take it to an accountant and let the accountant deal with the numbers.

Trust me - it's money well spent. And tax prep, last I looked, was deductable, so make sure you get those receipts.

Also, please note, I am not a tax expert, accountant or auditor. Check with a professional before making any clear decisions based on my statements.

I've been stung by the IRS before - it's no fun.

Lee Darrow, C.Ht.
http://www.leedarrow.com
<BR>"Because NICE Matters!"
Stuart Cumberland
View Profile
Loyal user
289 Posts

Profile of Stuart Cumberland
Generally speaking, there are enough *legal* loopholes that you don't need to scam the government.

The best advice I ever got, was from my lawyer, who set me up as a incorporation. He gave me the name of a tremendous accountant who has more than paid for himself over the years.

I keep EVERY SINGLE last receipt and declare EVERYTHING I legally can. My accountant makes sure that I maximize every single deduction that I can. And I almost always win in the end.

What most people don't realize is, there is almost always a paper trail. You might get away with screwing the government, but the penalties are so severe it isn't funny.

On a slightly different subject... I heard of a guy working illegally in the U.S. The problem is, if he's caught, the U.S. has the power to *permanently* ban you from ever setting foot on U.S. soil. (And that's just ONE thing they can/will do). To me, he's crazy. There's no amount that would compensate for the risk. If he simply got himself a visa, he'd be able to state honestly to the INS that he was working in the U.S. and go about his business legally and sleep comfortably.

Honesty is the best policy. A good accountant will generally cost quite a bit of money. But, I assure you, they will most often get you deductions that will offset the price. My accountant has given me the peace of mind that I *can* be audited with no fear.

(BTW, did you know that most auditors are trained to observe body language and will most likely be able to tell the level of discomfort? If they feel you are lying, guess what? They'll investigate til the cows come home).

I think every one of us agrees that taxes are too high, the government mishandles our money, etc. But risking jail to grab a few extra bucks ain't worth it.

Blair

Stage Hypnosis Secrets Revealed:www.Mental-List.com/masterhypnosis.htm
Stuart Cumberland
Natural Mystic
View Profile
Special user
Atlanta, GA
502 Posts

Profile of Natural Mystic
All,

Here’s some proven tax reduction tools

The Audit Proof Diary System

TRI has invented a special proven diary that eliminates procrastination. This diary has all the questions needed by the IRS to audit proof your :
· Entertainment
· Fun
· Travel
· Automobiles
· And even parking meters & pay phones
The key is that these tax questions are in front of you daily. You are constantly reminded of what to do with all the information right in front of you everyday. The diary has worked so well that virtually everyone who has used it has noted that it's very easy to use since all the questions are there, and it has worked miracles on IRS audits. It has withstood almost every audit it has come up against. Even the IRS agents were amazed at how good the system has proven to be.

Home Based Business

Many home based business owners fail to "maximize the tax advantages" available to them. It's important to realize that you can save money by having a homed based business even if your business isn't producing a profit.
Here is an outline of what you will learn in our program:
1. Learn how to deduct most of your fun such as movies, plays, and season tickets
2. Learn how to deduct your golf, golf balls, golf clubs and lessons
3. Learn how to deduct all parties in your home
4. Learn how to audit-proof all your entertainment from any IRS or state audit-guarantee!
5. Learn how to deduct any vacation anywhere in the world by combining the trip with business.
6. Discover the secret as to why IRS doesn’t require receipts for under $75 per item!
7. Find out how to deduct all dry cleaning and laundry and even the cost of clothing itself!
8. Learn how to audit proof all travel from even the toughest IRS scrutiny
9. Discover a little know secret (that is used by the super rich) to deduct the cost of your children’s weddings and education including law school and medical school- No kidding!!
10. Find out how to get around all those IRA limits so that you can set up an IRA regardless of income.
11. Discover the secrets on deducting all your kids braces, all dental, all mileage to and from the doctor, all deductibles, all eye glasses and contact lenses.
12. Learn how to deduct two or even the cost of three or more cars in your business.
13. Find out how to really audit-proof your automobile deductions.
14. Learn when and when to avoid leasing a car.
15. Learn the mistake that over 90% of business people make that cost over $5,000 per year in lost automobile deductions. This one is a killer!
16. Learn the biggest secret that most investors miss that would cut your capital gains taxes in half!! This one strategy will pay for the entire system alone.
17. Learn how to legally take a home-office deduction and yet actually reduce your chances of an audit.
18. Find out about a major bunch of deductions people are missing at home even if they never claim a home-office deduction.
19. Learn the secrets of what to do if you get audited and eight strategies on how to actually reduce your chances of being audited.
20. Learn about the pros and cons of incorporating and about the various types of business entities that are available to you.
21. Discover the real secrets on how to structure any activity as a business and not like a hobby.
22. Learn how to convert charitable contributions to become business deductions
And MUCH MUCH MORE!

http://www.taxreductioninstitute.com/

One Love!
"You never change the existing reality by
fighting it. Instead, create a new model that
makes the old one obsolete."
-- R. Buckminster Fuller
Lee Darrow
View Profile
V.I.P.
Chicago, IL USA
3588 Posts

Profile of Lee Darrow
The BIG problem with ANY diary system is that the person using it has to USE it religiously or it isn't worth the paper it's printed on or the electrons it shoves about (for computer-based systems).

"Nothing is foolproof. The minute something is said to be foolproof, somebody invents a better fool." anon.

Without using a system every day and on every job, things are going to fall through the cracks.

Many CRM (customer relationship management) programs, like ACT!, Goldmine and the like, include these reporting pages in their basic packages.

TurboTax also has an excellent utility that allows you to import info from these two programs as well.

Add to the mix that Act is available for the Palm Pilot PDA's and you have a REALLY easy system to use.

Kind regards,

Lee Darrow, C.Ht.
http://www.leedarrow.com
<BR>"Because NICE Matters!"
King Of Pop
View Profile
Veteran user
Estonia
392 Posts

Profile of King Of Pop
I must agree with the others - just be honest.
God Bless You, I Love You From The Bottom Of My Heart
The Magic Cafe Forum Index » » Tricky business » » A Little Thing Called Tax (0 Likes)
[ Top of Page ]
All content & postings Copyright © 2001-2021 Steve Brooks. All Rights Reserved.
This page was created in 0.18 seconds requiring 5 database queries.
The views and comments expressed on The Magic Café
are not necessarily those of The Magic Café, Steve Brooks, or Steve Brooks Magic.
> Privacy Statement <

ROTFL Billions and billions served! ROTFL