Teachers Beware: Jail for salsa tax dodge

[DanceMentor]

From Manchester NewsTWO young women showed great interest in the twice-weekly salsa dance classes run by Colombian Cesar Rodriguez at Manchester's Copacabana Club.

The pair were Inland Revenue investigators who knew he had not paid tax for years on his salsa earnings, Manchester crown court was told.

Rodriguez, 48, of Ashdene Road, Withington, was jailed for nine months. He admitted cheating the Revenue between April, 1996, and September last year and obtaining income support by the deception that he could not work because of illness.full story (http://www.manchesteronline.co.uk/news/stories/Detail_LinkStory=75816.html)

Have you ever taught a dance lesson, but never reported the taxes? I know it happens all the time. What is the best policy for a teacher when it comes to taxes?

[pygmalion]

This is a good point for those part-time, on-the-side dance instructors or business -people. Be careful about the tax man/woman.

[NeoDevin]

You should never try and dodge taxes... unless it's drug money, you might not want to report that.

[pygmalion]

Okay, so here's a question for dance teachers. (I'm hoping to start teaching soon, without exchange of any cash.) How do you do your tax accounting for cash students? No deep dark confessions here, please. LOL.

Also, is there a tax liability for someone who teaches gratis -- somehting involving value of wat'sbeing exchanged? The IRS can be a funny thing LOL.

[Pacion]

Also, is there a tax liability for someone who teaches gratis -- somehting involving value of wat'sbeing exchanged? The IRS can be a funny thing LOL.

:oops: I would suspect so as here in the UK, it is a tax liability, so I would expect you would get affirmative answers :oops: (I have been reliably informed that the authorities are actively seeking a means to "tax" the air we breathe :oops: :lol: )

Dodging taxes, as NeoDevin put it :wink: aka tax evasion is a crime, but tax avoidance isn't. So, if, in order to avoid paying tax you were able to claim all manner of expenses, then that is legal :wink: :D

No, I suspect you can't have a portion of your internet subscription in order to participate in DF as a deductable expense though :wink: :D

[pygmalion]

Scary. I guess I should find out.

[purplebook]

I definitely agree, dodging tax is not the way forward. My sister teaches dance part time and has registered self-employed. It does depend on how much your business will turn over, but it is worth noting that everyone is entitled to a personal allowance in respect of income tax which is £4745 (but I know Mr Brown has recently released his budget and the figure may have changed slightly). This basicially means that the 1st £4745 is tax at 0%. However, if you are employed in addition to teaching part-time, you may have already exhausted this allowance.

There are also other tax efficient approaches, for example, if you invest in equipment this can be written off against your income tax as a capital allowance (which is 50% in the first year for small business and 40% of the written down value of the equipment in subsequent tax years).

And...the Inland Revenue's 'Self-Employed' department are (surprisingly) very helpful, if you're unsure about anything! :lol:

[cocodrilo]

Gimme a break, guys! Everyone doing their own thing dodges taxes in one way or another, being it not claiming certain profits or trying to deduct things like pet food! Some of these guys are making thousands of dollars per month and not claiming ANYTHING- that's why the IRS is going after them. It's the inconsistencies the tax boys notice! It's good to keep things as legit as possible!

[ares1975]

I got no problem on tax-related issues since I am working for a donee institute. I am from the Philippines. I am a Salsa dance instructor. Unfortunately, we are the only school that offers to teach salsa. It happens that the school is not "technically" a dance school but a school for social sciences. We adapted teaching salsa as a way of intervention in community work/social work as I find the dance very helpful in my work as a sociologist and as a researcher. Honestly, we are not earning teaching the dance. In fact, we got a grant to be able to teach it (since our clients are mostly poor people.) We got clients who can afford, but we do not charge them. Instead, we ask them to shoulder expenses such as payment for the rent of rooms we use, food and drinks to bring during practice, etc. As to my salary, the Institute paid for it, not because I am a dance instructor, but because I am a researcher, and that being a dance instructor is part of it.

I think that for the next five years, my dance school will continue to operate with this kind of mission, providing services to help build community through salsa... and if in case we will venture to something that profits, then that would be the time that the school has to move beyond as part of a donee institution and start paying taxes. But as of now, almost everything that we give are free.

[Sagitta]

I got no problem on tax-related issues since I am working for a donee institute. I am from the Philippines. I am a Salsa dance instructor. Unfortunately, we are the only school that offers to teach salsa. It happens that the school is not "technically" a dance school but a school for social sciences. We adapted teaching salsa as a way of intervention in community work/social work as I find the dance very helpful in my work as a sociologist and as a researcher. Honestly, we are not earning teaching the dance. In fact, we got a grant to be able to teach it (since our clients are mostly poor people.) We got clients who can afford, but we do not charge them. Instead, we ask them to shoulder expenses such as payment for the rent of rooms we use, food and drinks to bring during practice, etc. As to my salary, the Institute paid for it, not because I am a dance instructor, but because I am a researcher, and that being a dance instructor is part of it.

I think that for the next five years, my dance school will continue to operate with this kind of mission, providing services to help build community through salsa... and if in case we will venture to something that profits, then that would be the time that the school has to move beyond as part of a donee institution and start paying taxes. But as of now, almost everything that we give are free.

This is great ares1975. Using dance to work with poeple on issues. This sounds interesting. Perhaps you can start a discussion about this, share some of your ideas... A thought. I would love to hear how eaxvtly you are using it, what works etc... :)