Being "Legit"

[Phaedrus 209521]

I found this really confusing so I wanted to know what my options were before going to see an accountant.

 

I'd have thought that one of the reasons to see an accountant would be to work out what your options were in the first place :) After all, if you're paying for professional advice, you might as well get your money's worth...

 

Having said that, I'm sure there's good and bad accountants for this sort of thing, and doubtless some of the ladies here may have recommendations...

[Guest Ou**or**n]

Seeing an accountant is silly. It's a cash business but not like being a waitress where the gov't can take a look at the type of restaurant you work in an estimate your tips. Your income is purely based on often you choose to work and nobody can prove anything else. Declare what you need to in order maintain a credit rating, enable RRSP contributions, qualify for loans or mortgages and justify your lifestyle. There is no point in going through the hassle of declaring a high income and then a whole bunch of expenses. If audited they may disallow some of the deductions and you'll end up paying more tax. Hiring an accountant costs money.

 

Declare it as self-employment income, the industry proper code is:

 

Other Personal Services (including On-line psychic, escorts, dating, party planning, personal shopping) - 812900

 

Of course you're supposed to declare it all...

[Guest]

I think it is always important to be well informed no matter what you are doing. That way the service you receive is done correctly and so that no one tries to pull the wool over your eyes. It is always a good idea to be informed.

 

If I knew what I was doing a little more I would not hire an accountant. Since I have no clue what I am doing tax wise, I think it is a great idea to hire a professional. It does cost money and that is something I'm willing to do since my only other option is h and r block and don't get me started with them. I will take my time and I will make sure that the accountant is an escort friendly accountant.

[SamanthaEvans 166767]

I used an accountant the first time I filed a tax return covering my work in this industry. Then on his advice, I bought a copy of the leading income tax return software and filled in all the information there just as it appeared in the tax return the accountant had prepared. Since then, I've upgraded the income tax software each year, updated my information and filed my taxes myself electronically.

 

One more thing, ladies. As self-employed people, we're not required to file our tax returns until June 15. File early, by all means, but if you're considering getting some help, you've still got time and the main rush for standard employees is over, too.

[backrubman 64800]

One more thing, ladies. As self-employed people, we're not required to file our tax returns until June 15. File early, by all means, but if you're considering getting some help, you've still got time and the main rush for standard employees is over, too.

 

Yes, well just to clarify on that Samantha (so no one gets bitten) I would imagine that without payment of income tax throughout the year by installments and assuming income of enough to live on, you'd end up owing some taxes. So for self employed persons while it is true that the filing deadline is June 15, the pay up deadline is still April 30, so in my case having prepared my return to know how much I owed (extremely "cruel and unusual punishment"), having to prepare the return to determine how much I owed and pay it by April 30, might as well file. The June 15 deadline is only helpful if your business is operating at a loss and we certainly hope that would never be the case.

 

From the CRA web site:

 

"your return for 2011 has to be filed on or before June 15, 2012. However, if you have a balance owing for 2011, you still have to pay it on or before April 30, 2012."

 

Oh darn, I just cut and pasted that, shameful! :)

 

So if you owe taxes on April 30th and any reputable service provider does, technically you are fined 5% of what you owe when you haven't paid by the 30th and it just gets worse from there.

 

I was so busted up when I found out how much I owed (and paid it two hours before the deadline) I had to spend a lovely afternoon with a wonderful lady to have her to take my mind off it and she did :) I'm all better now.

[Guest]

"I used an accountant the first time I filed a tax return covering my work in this industry. Then on his advice, I bought a copy of the leading income tax return software and filled in all the information there just as it appeared in the tax return the accountant had prepared. Since then, I've upgraded the income tax software each year, updated my information and filed my taxes myself electronically."

 

Samantha, I think that is a great idea verses going in blind. It may cost a little money but hopefully I will learn something and gain an important skill by seeing an accountant. Thanks for the great advice. Your accountant sound like he or she is a helpful person.

[backrubman 64800]

Samantha, I think that is a great idea verses going in blind. It may cost a little money but hopefully I will learn something and gain an important skill by seeing an accountant. Thanks for the great advice. Your accountant sound like he or she is a helpful person.

 

Maybe such a person could help you reach some financial goals over the long term as well with regular savings, etc. When I gave up being employed I also gave up my pension and benefits so if I am sick and can't work, I don't get paid. I have no dental, no drug coverage, no paid holidays, nothing at all in fact. I'm ok with that now but if it was like 10 years ago (living pay cheque to pay cheque) I'd be totally petrified.

 

So I think it is important for anyone to get all their financial goals in order. Especially bad for an SP I would think as it would be difficult to get disability insurance and then if you got it and became disabled (or had to take 6 months off due to some necessary surgery or some such), it might be really difficult to collect anything from the insurance company. I do wonder are there any SPs that have disability insurance? That have insurance against having to take 6 months or more off for medical reasons? It worries me a bit, lets say I get hit by a car and it's a hit and run... maybe just an outright car accident (they do happen) well if I'm still alive but in the hospital for a year I won't be earning any income. Something to think about.

[Guest]

This is the last question about taxes, I promise. It is important to me and I hope other escorts. Someone was telling me that there is differences between doing your taxes as an entertainer, adult entertainer and self employed. I guess there are strengths and weaknesses between each. I want to do mine as self employed because I find it more discreet. Can someone who knows about the differences between these tax "brackets" (I don't know what to call it) Just purely for the sake of informing me and other escorts about the differences and then I think that everything will have been explained in this thread.

[Guest]

There are different sections or brackets escorts have a choice of doing their taxes under and this does not have to do with working with or working for others. I was more asking in the terms of an independent escort doing her taxes. I asked the question wrong.

 

As I understand the different choices escorts have to do their taxes under are: self employed entertainer,self employed adult entertainer or just self employed. As I understand there are differences between all of these sections/brackets. There are strengths and weaknesses between all of them I guess. I just wanted someone to explain the differences between these brackets. Are there differences or are they all pretty much the same. Or do we only have the choice of doing the taxes under self employed adult entertainer.

 

I just want to make sure that my question is not changed into something else. I'm a very curious person if I'm interested in the subject.

[Athos 108589]

There are different sections or brackets escorts have a choice of doing their taxes under and this does not have to do with working with or working for others. I was more asking in the terms of an independent escort doing her taxes.

 

The different choices escorts have to do their taxes under are: entertainer, adult entertainer and self employed. As I understand there are differences between all of these sections/brackets. There are strengths and weaknesses between all of them I guess. I just wanted someone to explain the differences between these brackets. Are there differences or are they all pretty much the same.

 

I just want to make sure that my question is not changed into something else.

 

 

I don't have a specific answer to this question, but I'll hazard a guess.

 

First, though, what you are describing are not tax brackets, but rather different ways of classifying employment and the income you get from it.

 

For taxation purposes, a bracket refers to the rate of tax paid on earned income up to certain amounts. In Canada, the tax brackets used to calculate your income tax are as follows:

 

15% on the first $42,707 of taxable income, +

22% on the next $42,707 of taxable income (on the portion of taxable income over $42,707 up to $85,414), +

26% on the next $46,992 of taxable income (on the portion of taxable income over $85,414 up to $132,406), +

29% of taxable income over $132,406.

 

Now, of course, deductions operate to reduce the total amount of income earned, which then can have an effect on which tax brackets you fall into.

 

These brackets apply to all earned income, regardless of source. In that way, there is NOT a separate bracket for adult entertainers vs self employed escorts. The same rate of tax will apply.

 

I'm not sure about the designations you use Peachy, but it may have to do with employment status. So, for example, if a stripper gets paid by the club a set amount per shift worked, then she could be considered employed by the club. The money she makes from private dances are essentially tips. An escort, who works for an agency could be considered employed. Her share of each call becomes her "salary". However, she could be considered an independent contractor (self employed). The agency's share of each call, would now be thought of as an expense she pays the agency for services rendered ... Administering calls, setting up appointments, etc. it's probably to her benefit to do it this way, as the agency fee would be deductible from her income. In other words, it would be better for her to characterize herself as self-employed as she would be able to maximize deductions. It would also be to the agency's benefit, otherwise they'd have to do CPP and EI deductions and issue T4 statements (maybe they do, I have no idea)

 

An independent escort is self-employed, running her own independent business. You can still call that business adult entertainer or entertainer. For tax purposes that is irrelevant. The key is whether or not you receive an income (paid on a regular basis to do a job for an employer). If not, you are self-employed. Call the job whatever you like.

 

As a self employed person you maximize your deductions. For example, I'm employed. I can't claim a deduction for the costs of running my car, or for getting to work. But if I'm self-employed, and I need a car to conduct my business, then I can. When I go on a business trip my employer pays the costs and I submit expenses that get reimbursed. If I was self-employed doing the same job, I would deduct those costs from my income.

 

Don't get hung up on the terms .... They are just ways of describing what you do, and, from what I can tell largely irrelevant for tax purposes.

 

Perhaps someone else can add some further insight!

[redmana2 2754]

There are different sections or brackets escorts have a choice of doing their taxes under and this does not have to do with working with or working for others. I was more asking in the terms of an independent escort doing her taxes. I asked the question wrong.

 

As I understand the different choices escorts have to do their taxes under are: self employed entertainer,self employed adult entertainer or just self employed. As I understand there are differences between all of these sections/brackets. There are strengths and weaknesses between all of them I guess. I just wanted someone to explain the differences between these brackets. Are there differences or are they all pretty much the same.

 

I just want to make sure that my question is not changed into something else.

 

I think the person who told you that is slightly misinformed. :) As far as the income tax act is concerned there is no way you can get different brackets or tax rates depending on how you classify your income or what industry you are in. After you arrive at taxable income the tax calculation is kind of neutral regarding where the income comes from. Unless perhaps an individual province has specific legislation providing a tax credit to entertainers in general.

[Guest]

"First, though, what you are describing are not tax brackets, but rather different ways of classifying employment and the income you get from it."

 

Yes, that's what I was trying to say, Porthos.

 

"An independent escort is self-employed, running her own independent business. You can still call that business adult entertainer or entertainer. For tax purposes that is irrelevant. The key is whether or not you receive an income (paid on a regular basis to do a job for an employer). If not, you are self-employed. Call the job whatever you like.

 

As a self employed person you maximize your deductions. For example, I'm employed. I can't claim a deduction for the costs of running my car, or for getting to work. But if I'm self-employed, and I need a car to conduct my business, then I can. When I go on a business trip my employer pays the costs and I submit expenses that get reimbursed. If I was self-employed doing the same job, I would deduct those costs from my income.

 

Don't get hung up on the terms .... They are just ways of describing what you do, and, from what I can tell largely irrelevant for tax purposes.''

 

Thank you Porthos, very informative.

[Guest]

Thank you backrubman yes I do love running my own business. I like talking to my own clients and having the choice to do whatever I want with my business. I really enjoy taking part in the conversations here on cerb and it goes beyond building a brand to me, it's about building happy sexy relationships. When my clients are with me I become their gf and I wouldn't have it any other way. That's the beauty of this business their is the potential to meet great people.

 

Yes, I feel ready to do my taxes now. I have no more questions. Although I hope me asking them helps out someone else in the industry because this is some pretty confusing stuff. I know the basics and I feel like I can walk into the accountants office and be able to maintain a conversation and properly ask what I need him/her to do. That was important to me. Thanks guys for helping me out.

[Ordinem 278]

Reading many of the preceding comments remind me of that old saying "no doctor is better than a half doctor".

 

The following is not to be construed as legal or tax advice. Each of you should consult your own tax adviser in these matters.

 

Some of what I'll address has been touched here and there, sorry if Im being repetitious. There are a few bombs no one's touched on. I'll blow them up for you in the words that follow.

 

There are generally 3 sources of income under the Income Tax Act; investment, employment and business. Most SPs are carrying on a business. (Some who work for agencies are likely employees, but the agencies may view them and treat them as independents. I won't deal with those issues.)

 

You can call yourselves, enchantresses, entertainers, flutists or sex therapists; no consequences flow from how you characterize yourselves; you're carrying on a business. (And your accountant doesn't give a hoot how you earn your living.) Regardless whether it's legal or not (and I'm not suggesting that any of what you do is not) it is taxable. The Canada Revenue Agency ("CRA") has in fact issued a pronouncement on the matter following an enquiry from an inquisitive taxpayer regarding escort services.

 

In carrying on business you are entitled to claim any costs/expenses incurred with a view to earning a profit unless it is of a personal or capital nature. There is an overriding provision found at sec 67 that the expense has to be reasonable. In a pronouncement the CRA has stated its views regarding the deductibility of certain items pertaining to the sex trade. A taxpayer who ran an internet porn site wanted to know whether his wife's (the star of the site) toys and sexy clothes were deductible. I didn't go back to read it, but the answer was not black and white, other than the usual caveat about personal expenses not being deductible. The following are generalizations: clothes are generally of a personal nature. If an accountant buys a suit to look good for his clients, it's clearly not deductible. If he buys a gym membership to be fit and sane and ultra productive, it's not deductible. However, items which have no practical use outside your trade are probably deductible. I can think of dildos, whips, stripper shoes, condoms and K-Y (sorry I'm a newbie, so I don't know what you all need to buy). Garments, unlikely but some, perhaps. Hotel rooms, cabs; a pro rated portion of your house or rent expenses if you entertain there, clearly deductible if reasonably related to your income earning activities.

 

Under the Tax Act (and other laws), you are required to maintain adequate books and records. Some of you have suggested that all receipts be kept. Of course you need to do so; how else can one substantiate deductions. But you need to keep the same type of records in respect of the top line; your revenues. In you're business that's a challenge! (In my opinion, it's unlikely that you would be asked to provided detailed revenue ledgers, but the law requires it.)

 

Your gross revenues less expenses is your net income, which is subject to tax (there may other deductions and credits available, like RRSP contributions). Note that your net business income constitutes "earned income" which is the base to determine whether you can make contributions to an RRSP.

 

There has been a lot of discussion about the brackets. It left me wondering whether some of you were referring to something to tie up a hobbyist on a chair! We have a system of graduated rates. If you earn income between A and B, you pay a rate of X on that income. Any income above B until you reach C (and only that income) is taxed at Z, a higher rate and so on. Someone posted the rates. However, as I recall, only the federal rates were posted. There are provincial rates as well. Very briefly, in Ontario, income to 10k is tax free, the next tranche to 40k, is taxed at about 24%, the next to about 80k is taxed at about 40%, the next to to 128k is at 43% and above at 46.41%. (These rates are not accurate, they are just averages. There are about 9 brackets in Ontario.)

 

Here's one of the bombs. As a the operators of businesses, you are required to pay CPP, twice, being the employer's portion as well as yours. I don't have the specific dollar amount in my head, but the two add up to about $4,000 per year (that's the maximum, which all you full time SPs would hit - I can look up and post the income at which you hit the maximum if someone is interested).

 

You don't have to pay EI.

 

As stated, unless your income is subject to source withholdings (i.e. employment income where you employer deducts taxes, CPP and EI) you are required to make quarterly instalments - based on the prior year income. If you don't, interest applies on the deficiency, at the prescribed rate (fluctuates, but currently 1%) plus 4%, so 5%. It compounds on a daily basis. (Refunds attract interest at the prescribed rate plus 2%.) The same rate applies to unpaid taxes from the due date, being April 30. It is correct that you can file as late as June 15, but your taxes have to be paid by the end of April.

 

If you don't file your return on the due date, there is a penalty equal to 5% of the unpaid taxes, if any, plus another 1% per month the return is filed late. (If you file late but all your taxes were paid, there will generally not be a penalty.) File 6 month late, you are looking at an 11% penalty; if you owed $20,000 ... do the math. I think there is a cap on the accumulating monthly %, but it skips my mind right now. I will come back to these penalties in a bit.

 

Here's another bomb. Some have mentioned that credits would be available for HST paid on your hotel rooms and other expenses. That's correct, but the flip side of that is that everyone carrying on business in Canada is required to become a registrant for HST purposes. The only exception that may apply to you is that if you are a small supplier (not to be confused with a spinner) you don't have to register. Essentially a small supplier is one with less than 30k of annual revenues (not net income, but money coming in). If you are a small supplier, you don't need to collect and remit HST and you don't get a credit for HST paid on your expenses. We all know that most full time SPs exceed that threshold. The consequence of this is that if the guy gives you $220 for one hour of your services, you have in fact billed him about $195 plus HST of $25. Under the law, you have to file an HST return and remit the $25, well, all the $25 you are deemed to have collected! That in itself will cause quite a few of you to gag over the prospect of becoming legit after the fact.

 

Some of you have suggested that maybe not all income should be reported, a bit like speeding; go over the speed limit, but be reasonable. I can tell you that in the unlikely event you are audited, it won't take physicist to figure out that you have under reported, if you have done so aggressively. Think of it; how many of you post on internet sites your daily availability "Hey guys, Sex Goddess is available from 10 am to 10 pm today" ... and then go on to post later in the day "Hey guys, I'm fully booked for the day!" Many of your posting are archived, some of you have thousands! I tell you, in no time, an auditor will log in to these sites and will extrapolate a DDD income for you.

 

You should all be "legit" and I'm not suggesting any of you remain under the bed sheets. However the decision to become legit is a difficult one, particularly if you have not been filing tax returns for a number of years. Say, you are 30 and have been in the business for 5 years without ever having filed a tax return. (All your unreported years are open for assessment at any time; there is no limitation period.) If you file one this year, there is a possibility that you will receive a letter asking you to file a return for prior periods. This could be disastrous. Remember the penalties for unpaid taxes related to un-filed tax returns? Go back 5 years, and you will have more penalties and interest than you can handle - msog! The risk is much less if you have been filing tax returns, perhaps reporting income from a part time job. In addition, if you have filed a return, the penalties for un-filed returns won't apply.

 

None of you is likely interested, but the CRA has a voluntary disclosure program. Essentially, you contact the CRA and advise them you wish to disclose prior years' unreported income. The benefit of the voluntary disclosure is that the CRA will waive all penalties. You'll still have to pay the taxes and interest, though.

 

We live under a self assessment system; in other words we report the income we have earned. The CRA has nowhere near the resources to look into the affairs of all residents; like the speeding the laws, there are only so many cops on the road. The few who do get caught pay the price.

 

I apologize if any of you momentarily lose the ability to climax.

 

O

 

Additional Comments:

I re-read my last post and other than noticing a few typos, it dawned on me that I was remiss in not addressing a tax planning tip you may wish to consider. Again, this is not advice and you should consult your own advisor in these matters, but this is what I would do. (The rates discussed below pertain to Ontario, but other provinces have similar rates.)

 

Part 1

I would do like many other professionals; doctors, lawyers, accountants etc.; I would incorporate my business. (I'll refer to it as "Ecstasy Co") That type of business income would be eligible for the small business rate, which is about 15%. (It almost doubles for income over 500k, but only for the income in excess of 500k.) Say Ecstasy Co's net income is $100,000, its tax bill would be $15,000.

 

Part 2 follows

 

Additional Comments:

need someone to reply so i can add part 2

[Athos 108589]

I'd like to read part 2

[backrubman 64800]

...Think of it; how many of you post on internet sites your daily availability "Hey guys, Sex Goddess is available from 10 am to 10 pm today" ... and then go on to post later in the day "Hey guys, I'm fully booked for the day!" Many of your posting are archived, some of you have thousands! I tell you, in no time, an auditor will log in to these sites and will extrapolate a DDD income for you.

Additional Comments:

need someone to reply so i can add part 2

 

Yes, I'd be interested in part 2 as well. Most of what you say is dead on, I don't get the double CPP thing unless it's a real business with other employees and you are paying yourself a salary also. Wouldn't be the case with a self employed SP?

 

And as for backtracking the "hey guys I'm booked" posts, this (in this space that can mean many things, other than that). For instance, it could be a block booking from a single inconsiderate gentleman that turns out to be a no show, but the SP should have records to show this. In another instance the SP just doesn't feel like working any more that day or for the rest of the week and doesn't want to offend her regular clientele and in the final instance, it may be that not only does she not "feel" like working or is able to work (for whatever reason, could be family obligations, that time of the month, etc.) but also wants to advertise she is in demand :)

 

Anyways, thanks for your post, I find most of it highly accurate to the point I suspect you may work for CRA :)

[Andee 220524]

I find this post very interesting and informative.

 

Carry on, please.

[Ordinem 278]

This is Part 2 of my uncompleted additional comments. My word total was over the limit. Part 1 dealt with the introduced the possibility of incorporating your business.

 

Note I don't work for the CRA. I'm at the other end of the spectrum.

 

You would have to decide whether you pay yourself a salary and if you do you would have to withhold source deductions (CPP and taxes) on the employment income you pay yourself. Whatever you paid yourself would be treated as employment income in your hands and taxed as such. The salary would be deductible to Ecstasy Co. - as would the other expenses it reasonably incurred to generate a profit.

 

You could also forego getting a salary. To meet you personal cash needs, you would pay yourself a dividend instead. Dividends are subject to tax at much lower rates than employment income. Say Ecstasy Co's net income is 100k. Taxes would be 15k, leaving 85k after tax. If, say, you need 50k a year, you would cause Ecstasy Co to pay you a dividend of 50k. If you have no other sources of personal income, the tax on a 50k dividend would be a pittance - the top dividend rate is about 33% and it kicks in on income above 128k. (In fact if your only source of income is 30k of dividends, your tax bill would be close to zero.)

 

Think of Ecstasy Co as your retirement plan; if it earns 100k per year and pays you a dividend of 50k, it keeps 35k on hand to invest. Add up the years and you have a retirement fund. If you go with this approach, you will have no "earned income", thus no contribution room allowing you to contribute to your RRSP. In other words, the accumulated savings in the company would have to replace your RRSP.

 

The other consequence of going strictly with a dividend plan is that no contributions would be made to CPP. You would save both the employer's and the employee's contribution (about 4k). Of course, if you're not paying into the plan you will draw no CPP benefits when you reach that old age when your services will no longer be sought. (Some who are on a dividend plan pay themselves just enough salary to maximize CPP contributions and then pay the balance, if any is required, as a salary.)

 

Keep in mind that the HST rules would apply to Ecstasy Co. - gross income in excess of 30k, you need to register, collect and remit HST.

 

The cost to incorporate a company is about $1,000, at the low end, but not much more. Ecstasy Co would also have to file annual tax returns. The HST return would also be filed annually (depending on the income), although you could do so quarterly or monthly. It's a bit more paperwork, but it's worth it.

 

O

[Guest W***ledi*Time]

Thanks for your posts, Ordinem. Very interesting.

 

I will make one peripheral observation:

 

... how many of you post on internet sites your daily availability "Hey guys, Sex Goddess is available from 10 am to 10 pm today" ... and then go on to post later in the day "Hey guys, I'm fully booked for the day!" Many of your posting are archived, some of you have thousands! I tell you, in no time, an auditor will log in to these sites and will extrapolate a DDD income for you ...

 

Extrapolating an income based on "hours available to work" is obviously invalid. Hours available don't equal hours billed.

 

A lady could advertise availability for 12 hours daily, yet her policy may be to accept no more than one or two appointments each day (the appointments could be scheduled anytime during those 12 hours). I can point to at least one provider who advertises that she's available 24/7 - obviously an auditor wouldn't be entitled to draw the conclusion that she logs 168 billable hours/week.

 

I have read about a few audits from hell, though. I have no first-hand knowledge of how crazy an auditor might act.

[Guest]

Thank you Ordinem. This is the exact information we needed on this thread. I find it very informative. I will be taking and using a lot of your information. This is why I like using cerb because their are great people like Ordinem who have knowledge and are willing to share it.

[Ordinem 278]

I'm not suggesting that each available hour will be assessed as a billed hour. If you get audited and you have no adequate records, the CRA will determine what your income was and to do so will rely on outside indicators, one of which could be your published postings and schedules on your website. If, say, you're on from 10 AM to 10 PM and indicate that you are fully booked, no auditor will assume that you billed 12 hours. He'll likely assume that you saw 4 or 5 clients. If you're only comeback to having posted that you were fully booked is that "fully booked" is a euphemism for "I'm hot" or "I don't feel like working for the rest of the day", good luck. And make sure you have not been reviewed on CERB or elsewhere for services delivered that day! If you keep detailed records, it will help, even if they don't have client names.

 

And, here's a key consideration. If the CRA determines your income for the year was X the onus will be on you to establish that your income was other than as assessed.

 

The earlier posts discussed the penalty for late filing (the 5% + penalty). Well, that assumes a return was filed.

 

There are a number of other penalties that may apply if you are assessed by the CRA and have not filed a return (or reassessed where you have filed a return but the CRA disagrees with it). They apply in cases of one knowingly not filing or falsely filing a return or being grossly negligent. Some range from 50% to 200% of the tax which should have been paid. (Section 239 is a "criminal" type of infraction.) The late filed return penalty is peanuts relative to these penalties.

 

Again, the voluntary disclosure program can deal with some or all of these penalties.

[backrubman 64800]

I'm not suggesting that each available hour will be assessed as a billed hour. If you get audited and you have no adequate records, the CRA will determine what your income was and to do so will rely on outside indicators, one of which could be your published postings and schedules on your website. If, say, you're on from 10 AM to 10 PM and indicate that you are fully booked, no auditor will assume that you billed 12 hours. He'll likely assume that you saw 4 or 5 clients. If you're only comeback to having posted that you were fully booked is that "fully booked" is a euphemism for "I'm hot" or "I don't feel like working for the rest of the day", good luck. And make sure you have not been reviewed on CERB or elsewhere for services delivered that day! If you keep detailed records, it will help, even if they don't have client names.

 

Well in all fairness I'm the one that suggested that "euphemism" might be the case. I also "know" that most ladies limit themselves to a maximum of two clients / day (I also know of just a few that will fit is as many as time will allow).

 

But lets call a spade a spade. If the lady has $1000 cash for the day, when she sits down to make that log book entry knowing that 29% + what ever the applicable provincial rate might be is going to the government to buy those F-35s we don't need, well, I just don't see "most" people being this honest.

 

That said, I like your idea about a registered business and lower tax rate applied to that.

[Guest W***ledi*Time]

... no auditor will assume that you billed 12 hours. He'll likely assume that you saw 4 or 5 clients. ...

 

Either assumption would have to be just a number the auditor made up out of the blue.

 

There would be no possible defense available to any taxpayer (no matter their occupation or business) if CRA auditors were not at all accountable for basing their estimates on some sort of actual evidence - such as a demonstrated electronic money trail, or a certain level of lifestyle or assets that are being supported by the taxpayer.

[LaurenAdams 170]

As a part of the City of Edmonton's Licensing program, we (licence holders) are required to take a course that covers a wide range of topics. One thing that I was a bit surprised, but happy to see on the course outline was Taxation. It goes along with ensuring that every worker knows his/her rights and responsibilities to operating legally in our industry. The amount of misinformation, confusion and fear about taxation is astounding. I think that is great that every licensed girl in Edmonton will have had exposure to the basics, benefits and laws about filing. Whether they listen or not, at least it's being made available. I know the City is trying to come up with a strategy for this information to be distributed and tailored to the girls working without licences. Knowledge is power!

[Guest]

Great point Lauren. This is another reason why the Harper government should legalize incall escorts. Knowledge is power and the more we as escorts know the better off the service for everyone. There should be a starter course about taxes because it could be scary among safety procedures ect.