Being Financially Secure as an Adult Worker
Being Financially Secure as an Adult Worker. It’s no hidden secret that those that work in the adult entertainment industry make a large proportion of their wages through cash payments. We’re here to offer you some interesting adult worker specific tax information – in an Australian tax-payer mindset. We’ll focus on how to declare your income and expenses, why you should declare and a really comprehensive list of deductions you can claim (industry specific of course!).
In a cash-tipping industry, it not very frequent to meet someone who is paid a salary for their work. They are either living off the cash-tips with some club residency commission, or they are running their own sole-trader business. With the decent dollars that come with this industry, it’s an important skill to know how to manage your money, not only for now, but to secure your future through appropriate tax lodgement, showing continuous income and being able to budget and save.
RECORDING YOUR EARNINGS AND EXPENSES
The Australian tax system relies on taxpayers self-assessing. This means you are responsible for working out how much you can declare and claim on your tax return.
You also need to be able to show how you arrived at these figures – in some cases you may be required to provide written evidence. You must keep you tax records for 5 years after the date you LODGE the tax return
Keeping good records helps us and you:
· to provide written evidence of your income and expenses
· to help you or your tax agent prepare your tax return
· to ensure you are able to claim all your entitlements
· in case we ask you to prove the information you provided in your tax return
· reduce the risk of tax audits and adjustments
· improve communication with us
· resolve issues relating to disputed assessments or adjustments
· avoid exposure to penalties
A simple way to keep records is to set aside an account for your business, where you deposit all your income and have a card attached to the account which you use for all your expenses, and keep a note of what each expense is for. This means that at the end of financial year you can download your transactions for the year for your accountant and they can easily work through your tax return. For sole trader businesses, you can transfer to an everyday account money for living expenses and personal spend.
This was you keep business and personal transactions separate, making it much easier come tax time. For those operating under a company structure, you can pay yourself a wage which will comprise of PAYG withholding tax. This is remitted to the ATO by the company on behalf of the employee (yourself) the same way an ordinary salary job would.
EXAMPLES OF ASSESSABLE INCOME
· Ordinary earnings from working
· Commissions paid by clubs or agents
· Tips from customers including those paid in tipping dollars
· Appearance and performance fees
· Prize money won from competitions etc
· Fees charged for lessons or choreography
CASH & NON-CASH GIFTS
Cash Gifts: gifts may be taxable if they are large amounts or you receive them as part of a business-like activity or in relation to your income-earning activities as an employee or contractor
Non Cash Gifts: a non-cash business benefit shall be treated as if it were convertible to cash and therefore be deemed income earned by the taxpayer. The gift’s value will be determined at arms length value.
EXAMPLES OF ALLOWABLE EXPENSES
· Motor vehicle costs proportionate to the amount travelled for work purposes
· Taxi or Uber travel from jobs
· Flights and accommodation where travelling for work
· Costumes, specialty lingerie, dance heels
· Stage makeup, lashes, fake tanning products, wigs and hair extensions
· Props used for shows such as chairs, pools, sex toys
· Generally all items purchases at sex shops
· Pole dancing classes
· Depreciation on assets used to produce income such as computers or laptops
· Stationery items used to run your business
· Business portion of telephone and internet costs
· Small business classes for management of business
· Advertising or website expenses
· Promotional photography expenses for shots for websites and agencies
· Commissions paid to agencies or clubs, booking fees, house fees etc.
· Accounting or legal fees relating to your work
· Donations made to charitable organisations
Empire Industry Finance Services is an Australian based accounting business solely dedicated to helping people in the adult entertainment industry. Our core value is to be able to provide innovative and accessible accounting services to everyone, in a confidential and professional matter.
We offer end-to-end services for Escorts, Brothels, Sex Shops, Adult Events, Film Studios, Porn Stars and more in the following areas:
· Tax Returns
· GST/IAS/BAS Reporting
· Business and Finance Coaching
Empire is currently offering free consultations to Australian industry workers. All you need to do is book a time that suits you via this link: https://ebsbooking.as.me/
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