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araya
New Member

How do I file taxes if my income was earned working as an independent escort?

All income was cash
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1 Reply
ThomasM
New Member

How do I file taxes if my income was earned working as an independent escort?

When you work independently and don't receive a W2 form, the IRS considers you to be self-employed.  They consider you to have a business, even though the business may not be an official entity like a corporation or partnership.  They also require you to report the income earned from that business.

In order to prepare a tax return as a self-employed person, you'll need to use TurboTax Self-Employed.  If you're already in TurboTax Deluxe, the program will allow you to upgrade to Self-Employed once you start entering information on your business.  You'll do this by clicking on the Federal Taxes tab, then select Wages & Income, then scroll down to the heading entitled Self-Employment (you may have to click on "Skip to see all income" to display the various headings).

When you click on Self-Employment, the section will expand and then you'll click on "Start" next to Income and Expenses. TurboTax will ask you to write in the description of your business ("Escort" is fine), then you'll come to a screen that says Let's Get Income and you'll be asked to select a category (1099-MISC, Additional Income, or Uncommon Income) and you'll select Additional Income because you were paid in cash and didn't receive a 1099-MISC form.  Then you'll be asked to enter the amount you earned along with a description (again, "Escort" is fine).  For the amount, you can just put one figure (one grand total).

Once you've input your income figure, TurboTax will ask you some questions about your business, like does it have a name and a different address than your own.  You can answer no to these questions since you aren't required to have a special name or an office address.

From there, just continue to follow the prompts and you'll be able to enter all your expenses.  You'll do it the same way, listing amounts next to certain categories (or writing in your own category if it isn't listed).  In the end, TurboTax will prepare a Schedule C with your income & expenses listed, and a "net" income figure calculated (income - expenses = net income).

One last thought:  as a self-employed person you'll want to begin making "estimated tax payments" since you don't have an employer to withhold taxes for you.  That way, you can pay your taxes throughout the year instead of getting hit with a tax bill when you file your return.  You'll do this once every three months on a Form 1040-ES.  Here's a link to the IRS form & instructions:  https://www.irs.gov/pub/irs-pdf/f1040es.pdf.

And here's one more link, to IRS Publication 334, which is a handy tax guide for the self-employed: https://www.irs.gov/pub/irs-pdf/p334.pdf

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