Deductions for sex workers in Canada
While purchasing sexual services may be illegal, sex work in itself is not. This confusion, as well as other factors, such as the negative image of the adult industry in general, fears about privacy and confidentiality, and the fact that sex work is primarily cash-based, are reasons tax compliance remain low among sex workers. Sex workers, escorts and other adult industry professionals have, however, the same requirements as other Canadian residents when it comes to filing taxes on revenues generated during a year. Not filing taxes, beyond the liabilities linked to evading taxes, also cause sex workers not to contribute to the Canadian Pension Plan to prepare for retirement, or to have a RRSP contribution room. Filing taxes online will ensure that one does not miss on such benefits.
Requirements for filling tax would be dependent of the type of sex work provided, the province and other personal factors. Below is a list of general tax deductions that could be available to sex workers:
-Car expenses (mileage, Uber, taxi etc.)
-Accommodation expenses (hotel, airbnb)
-Home office expenses
-Equipment expenses (laptop, phone)
-Professional Management Fees
-Adult toys and costumes
-Cosmetics, make-up and hair care
-Certain medical expenses
-Certain subscription fees
Specific rules apply which we have not discussed in details due to the limitations of this article. For instance, for car expenses, you cannot claim the part from your home to your work place (unless your home is also a place of work).
Before claiming a deduction, one must remember that such expenditure must be directly related to earning income, was not reimbursed, and that a record is available. If the expense was for both work and private purposes, only the work-related portion can be claimed.
Need more information on the subject or want to discuss your specific situation? Contact us today and we shall be able to assist you further.
Categorised in: Tax Accounting