1099?

[LauraLohnes]

What is the name of your state (only U.S. law)? (Texas)
I am "employed" by a nightclub; "employed" meaning: upon being "hired" I am allowed to provide entertainment to the customers of that night club (dance) for a fee, determined by the nightclub, but paid to me by the customers of the night club NOT by the night club.
The club determines the type of attire I am allowed to wear while working, requires that I perform duties they deem necessary (perform on stage, participate in club events throughout the night, such as dollar dances), sets the rules of what I can and can not do (in the course of the dance), and the hours that I can come in and leave.
I am NOT paid by the night club or its owners for any of my duties. Instead, I am charged a FEE to work by the night club (paid to the night club), I am required to pay the disc jockey "for working for me" (to the disc jockey), I am required to "tip" the management (each shift, for no specified reason) (directly, not to the club), and should I decide I want to leave before the "shift" ends (either 7pm for the day shift or 2 am for the night shift), I must pay an additional fee to the management (not the night club). If I "violate" any of these rules (or any other club rules), I am subject to termination.

1. Am I an employee?
2. Do I qualify as a section 530 employee?
3. I have received a 1099 MISC, with line 7, non-employee compensation, filled in with the total estimated "tips" from the entire year. (Each shift they randomly decide upon a dollar amount I make, between 50 & 70 $, report that as what I am claiming as earned tips- this is how they decide upon the $$, or so that is the explanation.) However, 1099 instructions (for employers, on how they should properly fill out a 1099 for employees) indicate that line 7 is $ amount the EMPLOYER paid TO the non-employee for services. THE CLUB DOES NOT PAY ME AT ALL. Am I correct in suspecting that this is incorrect? Further shouldn't my "tips" be in "other income, #3"?
4. Am I legally "allowed" to claim club fees as well as fees required (tips) of me to pay to management and disc jockey as work expenses?

What course of action would you suggest or is available (in layman's terms, what can I do about this)?

Respectfully, Laura

 

[FlyingRon]

1. Am I an employee?
2. Do I qualify as a section 530 employee?

Quite possibly, you can file an SS-8 to have the IRS make that determiantion.

3. I have received a 1099 MISC, with line 7, non-employee compensation, filled in with the total estimated "tips" from the entire year. (Each shift they randomly decide upon a dollar amount I make, between 50 & 70 $, report that as what I am claiming as earned tips- this is how they decide upon the $$, or so that is the explanation.) However, 1099 instructions (for employers, on how they should properly fill out a 1099 for employees) indicate that line 7 is $ amount the EMPLOYER paid TO the non-employee for services. THE CLUB DOES NOT PAY ME AT ALL. Am I correct in suspecting that this is incorrect? Further shouldn't my "tips" be in "other income, #3"?
4. Am I legally "allowed" to claim club fees as well as fees required (tips) of me to pay to management and disc jockey as work expenses?

Presuming you are an independent contractor as management would have us believe. All money paid to you will be indicated on the 1099. You would then use Form 1040 Schedule C to exclude your expenses (fees, tip out, etc) and report the resulting gain as income. You also would use Schedule SE to pay the requisite self-employment tax.

 

[mmmagique]

You should contact this lady: Tax Domme and ask her. She is very knowledgable in this area.

Personally, I don't think you should be given a 1099 or a w2, as you are actually a "client" of theirs, kind of the way girls who use the Niteflirt platform for phonesex are "clients of NF.

Good luck!

 

[FlyingRon]

How does the money get to you? If the patrons give it directly to you, then I would agree with mmm. I'm not sure how the club even knows how much to put on a 1099 in that case. If it passes through the club (they collect it, handle credit cars, etc... and hand it to you) then the 1099 is appropriate.

 

[mmmagique]

Hmmm....I know Flying Ron is much more knowledgable than me concerning these matters.
FR, let me ask you something; Niteflirt has been doing this for years. We pay NF for their services, as do our clients. NF takes their cut of the money we earn and passes it on to us.

This is what their TOS says about this: "NiteFlirt acts only as an interface to facilitate communications initiated between Members. As a Member, you are not an employee, agent or contractor of NiteFlirt, and you shall not represent that you are any of the foregoing. You are solely responsible for all equipment necessary to access and use the Site and Speaker Services, and for reporting and payment of all taxes associated with fees transferred to you by NiteFlirt."

They have been doing this with thousands of girls for about ten years. I have to believe as large a company as they are, they got some sort of legal advice about how to do this...but it's very confusing to me. *lol*

What do you see this arrangement as? When the OP was explaining her situation, I thought *she* sounded like an employee; there were a lot of rules in place that she has to follow...Or if not an employee, than someone who is (as I am) purchasing the service (kind of like using Ebay)

On the other hand, I have complete autonomy with what I do as long as I don't break the law or violate TOS.

Any thoughts?

 

[LdiJ]

This is a really tricky one. She is not paid by the nightclub at all so its totally improper of them to give her a 1099. I am quite sure that they are committing some tax fraud themselves by doing that. They are deducting money (from the 1099) as expenses when they are never receiving the correponding income.

Technically, they are employees however, in my opinion, and rather than having to pay a fee to work there, they should be getting a base salary from the club and have to report their tips so that proper SS and medicare is being withheld. Similar to a server in a restaurant.

However the way they are handling things, (requiring the dancers to pay a fee for each shift and treating them as self employed) is VERY common in the industry. What is NOT common, is issuing a 1099 to the dancers.

 

[mmmagique]

Thank you, Ldij! Yeah, I thought something didn't *smell* right with this one. Op, I think you really need to speak with a tax professional regarding this.
Good luck!

~Christina