Avoiding issues come tax time for the private escort

Working freelance is hard. You’re setting up your own schedule, doing your own advertising and networking, trying to figure out exactly how to “play” the part that will be the most lucrative, and your income comes from many sources. By the end of the year, recording all of your work for taxation can be a daunting task; an endless gray area for those not familiar with how the process works.

Freelance escorting is not unlike other small businesses or freelancers, and in reality, it’s fairly simple to set up your work so that, come tax time, you won’t feel overwhelmed.

Before starting to work or when reexamining how you want to run your business, decide what kind of business it is that you actually want to run. Consider these questions: Do you plan to work solo or do you want to work with a few others and create a small service? What are your parameters—fees, things you will and will not do, cancellation policy etc? How do you plan to advertise, charge and get paid for your services? Asking yourself these questions is a good step in figuring out how you want to proceed, the type of research you should do when setting up your business and how you thoroughly you’ll need to articulate your services in print and in person to avoid any legal hassles. For example, if you’re putting advertisements in paper or running your own website, all of the money you put into those services can be deducted. If you get paid through cash, you’ll want to know how much to put aside for taxes later in the year. Sometimes just clarifying what your business is will help you formulate a simple to-do list that will become second nature once the ball is rolling. Once you’ve figured these things out, put your conclusions down in print.

Then register your business with your state—a process that may seem intimidating but is actually rather simple. An easy way to check off the legal steps of this process by state can be found at Business.gov and get a tax ID number. Then all you basically need to do is keep a record of your funds, figure out the interesting tidbits you can deduct from your taxes and file as you would for any other occupation.

As you would with any other business, keep records of your clients. Make sure to keep track of their contact information, rates, the time you’ve spent together, how they paid, and anything that will help you provide for them in the future. This will not only help you better serve them again; it will keep track of where your money has circulated and help you realize trends that may increase your earning potential over time.

Also, keep track of your spending. Things such as clothes, shoes, transportation fees, medical checkups and supplies can all be listed as deductions when you do your taxes—and since you haven’t been paying into the system throughout the year, you’ll want as many deductions as possible so you don’t owe anything. For example, if you drive regularly to meet clients, record the mileage for every trip you take, how much gas you purchase and any repairs on your car. These can all be deducted at the year’s end!

If you can, use your bank account as much as possible. Even when getting paid in cash, make a deposit so that the cash is recorded, and keep records of where each deposit comes from (this will be much easier if you record all payment receipts from clients). This way if you ever get audited, you’ll have a black and white record of where you funds have come from and where they’ve gone.

Sadly, there isn’t a union strictly for those in the escort service industry, most likely because of the social judgments against the field. But consider looking into a freelancer’s union or simply a social forum that provides the most up-do-date legal and social information for your work. Relying on word of mouth isn’t a sound way to run your business—be aware of the prostitution laws in your state and your rights within them, and try to keep your business run as simply and consistently as possible.

Please note: Skipthegames.com is not a legal service, nor are we tax advisors or accountants. We do offer you what we consider our best advice, but if at all in doubt, please consult a professional.