Niche tax advice is this woman's passion. And yes, condom purchases are tax deductible.
of All the women attending the seminar were sex workers, as were the instructors. One person asked her if she was “really going to tell the IRS how she makes a living,” which prompted a laugh.
Yes, sex workers can and should pay taxes, said an instructor named Mia Lee. After all, she does it herself.
“IRS policy is to simply file your taxes, even if you are doing something illegal. [won’t] Arrest me or something like that.” Mr. Lee said. (The Washington Post identifies her by her professional name due to the nature of her work.)
Lee He previously worked as a forensic accountant on Wall Street and maintained his CPA license after retirement. Now she spends her days working as an escort, stripping in clubs, and performing sex acts on webcam. But in her free time, she helps fellow sex workers pay their taxes.
she Shortly after I started escorting five years ago, I started giving financial advice on Reddit.Then she started an annual tax seminar and has grown into office hours for personal, one-on-one free tax preparation.Recently she launched her YouTube series It's called “Money Talks with Mia” for sex workers.
Lee, a self-promoter who made a name for herself by making an unusual career change from banker to sex worker, said when she first tried sex work, she thought it might be a detour for a year or two. . Now, she envisions a long-term career combining her two specialties to help sex workers improve their financial literacy.
in new york At a tax seminar at the beginning of last year's tax season, Ms. Lee expertly answered all the questions, without any of the ridicule or harassment that these women might receive from other accountants. It helps that she is already familiar with this field. Questions included complex topics such as how to deduct fees paid to rent a dungeon and how to report income paid in Bitcoin from a platform called “Spankpay.”
She said she is used to working with people in precarious financial situations. One woman confessed, “I had no idea about taxes for a long time.'' She now feels anxious about her application, she said. “I finally got Medicaid last year, but they don't know my actual income. Now, what if this is on the books? She said one of the reasons I haven't reported my income is because [health care]”
Sex workers are often wary of connection to the mainstream economy. They fear being arrested because prostitution is illegal in much of the United States. They fear that their bank or credit card company will close their account because of their actions. That means they, like other people who earn money illegally, often don't pay taxes. A 2021 study estimates that the average sex worker would pay more than $5,000 more in taxes per year if sex work was legalized.
All of this means sex workers will be placed outside the financial system that most Americans rely on.most of their transactions It's cash and poorly regulated cryptocurrencies.
Reliable statistics on how much money sex workers actually make are difficult to come by; A study by British criminologists surveyed hundreds of sex workers and found that more than half earned less than about $25,000 a year, and the majority earned less than half that.
Lee's income is much higher. She made more than $1 million last year, she said. But in her view, sex workers at any income level can benefit from filing an annual tax return. She said this is not just a civic duty, but an important step toward improving public finances. For low-income sex workers, that could mean an immediate cash infusion like the child tax credit if they have dependents. And it can, for example, establish a financial history that will be helpful when applying for a mortgage someday.
“We all live here. As legitimate members of society, we should contribute,” she said, while wearing a T-shirt with the slogan “Your boyfriend buys my nudes.” Lee said after wearing it.
for During a recent one-on-one tax preparation session with a New York City woman who works as a stripper and prostitute, Lee invited the woman to her condo overlooking the Hudson River.
“What if I want to use it legally?” asked a woman who had been stripping for seven years and hadn't recently filed a tax return. She mused that many sex workers must be thinking, “I've been on the illegal side for a long time.”
The woman had a long list of Cash App, Venmo, and Zelle payments and tips from customers, ranging from $30 to $3,000. In total, she earned more than $100,000 last year. She then deducted her expenses – $1,191 for “uniforms” to work at the strip club and $449 for safety supplies.
Mr Lee scrutinized the woman's accounts and questioned her about not buying condoms for a long period of time. She said the woman was not working as an escort at the time and that she was just dancing at a club.
Many women ask Mr. Lee about deductions. In her tax seminar, Ms. Lee used the example of her own two-bedroom apartment when explaining her home office deduction. She said, “You can't write off the main bathroom. You can write off the second bathroom because you're streaming the shower and charging for it.” “Sounds good,” one of the sex workers said.
Another sensitive topic is what counts as payment for services, which women must report, or what is considered a gift, which women must report. The stripper told Lee that on her recent trip, “that guy gave me a diamond.” In the end, they decided that the jewelry was a gift without expecting anything in return.
In total, the woman paid more than $15,000 in federal taxes, according to Lee's calculations. The woman thanked her.
“It’s great to talk to people who are actually in the industry,” she said. “There's no need to judge.”
