How many SP's actually save money?

[fuji]

Does anyone know for certain how much cash can be deposited into an account without triggering any suspicion? How much in a month for instance?

Any transaction over $5k is guaranteed to raise suspicion. Any pattern of transactions under $5k that look like they are intentionally trying to avoid the $5k reporting limit will certainly raise eyebrows.

From a savings point of view what is more likely to raise suspicion is a large balance. Eventually the CRA will notice. Maybe not for several years, but they can audit you back several years into the past (5-10 depending), and if they audit you for one year, odds are thy will look back several previous years.

I would recommend that an SP declare at least a large portion of her income and put it in the bank. First, the business isn't illegal, and the CRA isn't going to come and lecture you on your lifestyle, and they'll keep the record secret. Second, you could just list it as "self employment income" and put down "entertainer" or something, you don't have to be specific, and CRA won't really care either, so long as you report it.

You could then save maybe half the money you reported in a proper investment account or something. You also would be able to write off all sorts of business expenses--if you rent a place to entertain clients, or your car, clothes you buy for the job, money you spend advertising, paying drivers, food while you are working, etc., you can write that all off, so taxes are going to be lower than you think.

This industry is *legal* in Canada, and there are generous deductions available for small business owners, which is what all you SP's really are, so taxes are not really the big problem you think they are. Get an accountant who is open minded and file something. Maybe not 100% of your income, but enough that you can have real savings in the bank.

Kacy, this is a lot easier than you think, you have nothing to be ashamed of about your job, and you have a great opportunity to save a lot of money if you do this right. It won't take you long to get it set up, and you'll be able to breathe freely wrt CRA, etc.

 

[fuji]

On an almost humourous note, but, from the govt's point of view, totally serious issue...

Any of you SP's who claim to be filing taxes properly, are you charging your clients 7% GST and remitting your GST to the govt. the way you are suppsoed to be? CRA might come along and claw back 5% of your declared income some day when they realize it was all GST eligible, which it is....

 

[zanner69]

Does anyone know for certain how much cash can be deposited into an account without triggering any suspicion? How much in a month for instance?

see a good tax lawyer and open an account down in the cayman islands - some nice off-shore banking going on down there !!!!

 

[fuji]

see a good tax lawyer and open an account down in the cayman islands - some nice off-shore banking going on down there !!!!

You have to get the money there somehow.. CRA is going to know about your wire transfers.

 

[zanner69]

You have to get the money there somehow.. CRA is going to know about your wire transfers.

obviously you do not know how things work??? - very easy to do!!!!

 

[Preferred]

Living it up

Every sp or stripper that i know is driving the latest BMW or Mercedes, and living it up. They are still quite young, hopefully they will smarten up with experiences of life.

 

[Preferred]

Does anyone know for certain how much cash can be deposited into an account without triggering any suspicion? How much in a
month for instance?

Depends on your relationship with your bank manager.

 

[blopar]

Every sp or stripper that i know is driving the latest BMW or Mercedes, and living it up. They are still quite young, hopefully they will smarten up with experiences of life.

Gawd, they are crazy! A couple of hundred bucks a month wasted on upgrading a car lease from a Hyundai to a Beemer.

They should learn from all of us on Terb, who never waste a few hundred bucks a month on this habit!

 

[Preferred]

Who said anything about leasing? Most of them have poor credit ratings to start with. I said most.

 

[yoniluvrca]

Not to make anyone paranoid but, I wonder if revenue Canada reads this board?

 

[fuji]

obviously you do not know how things work??? - very easy to do!!!!

It used to be. CRA is playing a better game these days than a few years back. Be careful with this stuff.

 

[zanner69]

It used to be. CRA is playing a better game these days than a few years back. Be careful with this stuff.

it's still is easy - the law firms in the Cayman islands and the Bahams are doing extremely well - and I'll leave it at that.

 

[Vancouver Femme Fatale]

A really good way to find out about what are viewed as suspicious transactions is to go at it from the other direction and check out Financial Transactions and Reports Analysis Centre of Canada info like;

http://www.fintrac.gc.ca/publications/guide/Guide2/2s4_e.asp#441

While mostly targeted at money laundering and suspected terrorist funding, it will tell you what kinds of transactions or behaviours attract attention and trigger reporting.

 

[WhaWhaWha]

First, the business isn't illegal, and the CRA isn't going to come and lecture you on your lifestyle, and they'll keep the record secret. Second, you could just list it as "self employment income" and put down "entertainer" or something, you don't have to be specific, and CRA won't really care either, so long as you report it.

This industry is *legal* in Canada, and there are generous deductions available for small business owners, which is what all you SP's really are, so taxes are not really the big problem you think they are. Get an accountant who is open minded and file something. Maybe not 100% of your income, but enough that you can have real savings in the bank.

It's true the CRA won't lecture you about your career or lifestyle. There are all sorts of other agencies waiting in the wings to do that to the more forthcoming open honest sex workers. The ones that make themselves easy to find because of their honesty. Aren't sex trade workers required to obtain special licenses and certifications, or is that just MPAs? Aren't they also required to cooperate with scheduled health screenings whether they like it or not? Aren't their tax returns scrutinized to the bone due to the nature of untraceable cash transactions? Once the police are made aware, don't a lot of known sex workers suddenly find themselves the recipients of undue harassment, out of the blue, for "suspicion" of other illegal activities like drug trafficking? Aren't they impeded from having live-in partners because the police periodically pick up their spouses for living off the avails? And heaven help you if you have children present in your premises (even if it's exclusively outside of business hours). A lot of frivolous charges and harrassment goes on. The SPs might win their court cases, but the financial and emotional strain of living in the courthouse takes it's toll. The laws are not quite as enabling and liberal as you might think. Many workers are driven to concealing their trade. And living in a cash based, bankless world is expensive. No investments. No credit cards. No financing. Everything paid for in cash -- even large ticket items. Just some of the things I've been told by workers who I'm assuming would prefer to remain nameless.

 

[fuji]

It's true the CRA won't lecture you about your career or lifestyle. There are all sorts of other agencies waiting in the wings to do that to the more forthcoming open honest sex workers.....

Do you know that for a fact or are you speculating? It is my understanding that it is illegal for CRA to turn over anything about you to any other govt. agency without a court orderering them to do so. I do not think the CRA automatically turns anything over to the police under any circumstance other than possibly prosecution or investigation of tax evasion.

I also don't think CRA has time to audit in detail anyone who has mostly cash transactions. You might have a better chance than someone with a non-cash business, but there are LOTS of people with cash businesses out there, and simply not that many CRA auditors.

Further, if you do all of this properly, you really have nothing to fear from an audit anyway. That's the whole idea of reporting it as a business--you are clean.

Finally, when you file a small business return there is NOWHERE on the return that you would write "prostitution" there! Unless you would actually audited they would never actually inquire into the nature of the business, and even if you were audited, they might not!! So it is not like disclosing the income means you are disclosing exactly how you earned it. For any simple fill-in-the-blank that you might have to put something, just put, "services to clients" or "consulting" or "entertaining".

Even if you were more blunt than you need to be and wrote in "escort" I don't think you would be audited, but since you don't even need to write that, what's the problem?

 

[domintoronto]

After buying two homes in Toronto, a place in Miami and a 2004car (not the newest fanciest on the block) paid for in full(no morgtages, and I rent 2 of the places out seasonally), savings, a legit job and school. Some of us can and DO do it! I do not do drugs of any sort, drink, smoke ciggs nor do I party lol Perhaps some view it as boring, I see it as smart. I have everything I want that makes me happy so I don't seek it out in silly things like shoes, purses and high end label. I think when ladies do it for that it's tacky and quite sad to say the least. We all like nice things but the things I like and prefer are a roof over my head, my savings (mutual funds, rsp, and stocks) and the essentials......everything else is simply the icing on the cake.

I can honestly say I won't be in this business long, except that I enjoy it so much....once the thrill is gone I will be too as this is something I CHOOSE to do, not HAVE to do.


my 2 cents

 

[Vancouver Femme Fatale]

Well said, ladies!

I file a return, deduct my expenses and declare myself as a social escort. Why? Because living in paranoia is just obnoxious, and I also go to the doctor, library, public events, am willing to call cops if I need them, and loads of other things that are supported by tax dollars. And, just as importantly, in my case, why willingly give anybody ammunition? I consider myself very lucky to be able to be open about what I do; most ladies cannot because of family or employment issues.

Canada is a great country, and I'm not a parasite. Believe it or not, as noted, not all of us are in it for a coked-addled Manolo Blahnik-shod free ride.

 

[RTRD]

This...

I have sat down with several ladies and gone through their earnings and expenses with them, in detail, to help them target where their problems are. The sad thing is that most ladies (that I know anyway), blow everything on expenses. Everyone has a different vice, be it vodka, or shoes, or travel, or a "boyfriend", or "little things" that add up. Only a very, very few that I know - I can count them on one hand - put away money towards a home, a car, or savings. And even then - those ones with a modicum of discipline - they really should be doing much better than they are. In all my experience I have only met one lady who had a plan, and stuck to it.

...is pretty much what I'd expect.

I've said it before at different times and in different ways, but I think it would take a fairly "unique" person to be a sex worker (stripper, MPA, SP, others). And it is hard for me to imagine such a person having the self discipline to save significant sums of money (else they probably would have acquired the skills necessary to find a different way to make in the first place).

I am sure some people will call me judgemental, but your emperical edvidence seems to back my line of thinking up...

 

[keybitz]

imho i'd say that 10% have good business sense and maintain the necessary disciplines to succeed in attaining their goals....from that 10% i'd estimate that 8% "retire" when they intend to, with the remaining 2% continuing a successful and profitable venture...





QUOTE=MLAM]...is pretty much what I'd expect.

I've said it before at different times and in different ways, but I think it would take a fairly "unique" person to be a sex worker (stripper, MPA, SP, others). And it is hard for me to imagine such a person having the self discipline to save significant sums of money (else they probably would have acquired the skills necessary to find a different way to make in the first place).

I am sure some people will call me judgemental, but your emperical edvidence seems to back my line of thinking up...[/QUOTE]

 

[Fuzzy Thumper]

It is my understanding that it is illegal for CRA to turn over anything about you to any other govt. agency without a court orderering them to do so.

Nope. Well, yes, if there is a Court order, they have to comply... but they aren't restricted to that. Section 8(2)d of the Privacy Act says that they may release information to the Attorney General of Canada for use in legal proceedings involving the Crown in right of Canada or the Government of Canada. Section 8(2)e allows them to give the information to law enforcement if they ask and describe why (without court order).

I do not think the CRA automatically turns anything over to the police under any circumstance other than possibly prosecution or investigation of tax evasion.

It's not automatic - but it isn't illegal. That's just TV myth. Things you tell CRA are not "priviledged"! They CAN be used against you, if there is sufficient reason to do so. Or, more importantly, if you give them reason to WANT to....

I also don't think CRA has time to audit in detail anyone who has mostly cash transactions. You might have a better chance than someone with a non-cash business, but there are LOTS of people with cash businesses out there, and simply not that many CRA auditors.

Huh? That's exactly who they target for audit. Because that's where most of the "funny business" goes on.

If your business is highly automated and full of paper trails, there isn't much to actually audit....

Further, if you do all of this properly, you really have nothing to fear from an audit anyway. That's the whole idea of reporting it as a business--you are clean.

Finally, when you file a small business return there is NOWHERE on the return that you would write "prostitution" there! Unless you would actually audited they would never actually inquire into the nature of the business, and even if you were audited, they might not!! So it is not like disclosing the income means you are disclosing exactly how you earned it. For any simple fill-in-the-blank that you might have to put something, just put, "services to clients" or "consulting" or "entertaining".

Even if you were more blunt than you need to be and wrote in "escort" I don't think you would be audited, but since you don't even need to write that, what's the problem?

True. But you don't submit receipts either. The foundation of our tax system is based on self-assessment, and they "trust" you... until you give them reason not to.

If you do get audited (and most businesses do, sooner or later), they are VERY much interested in EXACTLY how you make your money. The reason for this is that they need to know this to assess if any of your deductions are "reasonably required" for having earned that income. Simply stating "Consulting" or "Entertaining" will no longer suffice.

I'm not suggesting that they hide what they do, or not declare income; in fact, I agree with most of what you say. I just think it's important to add the the following:

1. CRA is the Government, and "Privilege" is a myth. Anything you tell them, you should be willing to let the Attorney General or the local police know. Exercise discretion in what you say.
2. Get qualified professional help for your taxes (see Ms. Blue's post/request for ideas)
3. In addition to being careful to what you say, be careful not to create "paper trails" that suggest illegal activities (e.g. trying to deduct condom costs, advertising expenses, and home expenses for entertaining clients might put you on the wrong side of "solicitation" or "bawdy house" charges). It MAY not ever amount to much, but it isn't worth the possiblity.
4. Claim your income, and deduct VALID expenses, but be reasonable (your professional help will guide you here, but a general rule would be to ask yourself if you would believe someone could acually live on the net income that you are claiming)... if you get too aggressive, or try and jerk CRA around, they will respond in kind. And they are much better at it than you can ever be.
5. Never (ever) lie.