Here you will find information pertaining to Tax Returns for sex workers and a farewell letter to Wendy Leaver.
Tax Return Information for Sex Workers
If you are a sex worker or adult entertainment professional and need help with your taxes, there are some things you should know. Here are some frequently asked questions.
Why do I want to file?
Filing taxes allows you to save for an RRSP, buy a home, and make any other large purchases without questions from CCRA (Canada Customs and Revenue Agency). If you do not file, and live in a home or apartment, pay your rent, buy things, and are pretty much self-sustaining, the government may question how you can live with 'no income'. Your “Notice Of Assessment” also works as a proof of income for credit applications.
As a sex worker, what can I claim as a tax deduction?
Any money that you have to spend in order to make your income can be claimed. This includes, but is not limited to: cosmetics, cosmetic surgery, clothing, condoms, implements (such as sex toys etc..), transportation i.e.: taxi or driver or mileage on your own vehicle, etc etc etc. You can’t claim anything you do not have a receipt for. So KEEP ALL YOUR RECEIPTS.
How can I claim my taxes if what I do is considered illegal? Won’t I get arrested?
Being a sex worker is not illegal in Canada. Also, the CRA is not a law enforcement agency. Their only mandate is to collect taxes. They only contact law enforcement if you avoid paying taxes or commit tax fraud. Therefore, there is absolutely no risk to you for claiming your taxes. When filing your taxes, it is perfectly acceptable to use a generic term like 'entertainment’ as your occupation. (One SPOC member has been filing for years using the term ‘escort and tourist service’).
What are the downsides?
The main downside is that you will usually owe money. You do not pay deductions like Income Tax, CPP, or EI. Because of this, it is very unlikely you will get a tax refund. Do your best to try and keep 15% of your income saved so you won’t be overwhelmed with a big tax bill.
What are the benefits of filing?
18% of all the claimed income you have made in your life can be invested into an RRSP for your future. There is no better time to plan for the future than now, so when the day comes that you want to retire, you will have a nice little nest egg waiting for you. You also get GST rebates, rent credits, claims on dependants and/or children, credits for donations, and many other ways to get benefits.
Sex work is technically considered 'self-employed'. A beneficial contribution for sex workers is the Canada Pension Plan contribution paid out of our gross business income (the amount you make before deductions). It is beneficial because the government gives it back when you turn 65 and your contributions determine how much you get back. It also comes with a built in insurance policy benefit for death or severe disability that can be triggered before retirement. This is important to protect your family in case something happens. Unlike private insurance policies, you qualify based on your contributions and not your profession. There are manditory contribution amounts that are based on your gross business income. This is why it is important to file your income tax and pay the CPP. Your contribution also reduces your gross buisness income, which will reduce the amount of tax you owe.
I have no idea how to file my taxes. Who can help me?
SPOC has someone with experience in filing taxes for sex workers. Garth is sex worker positive and gentlemanly. He is not an 'official' tax preparer, which means he can prepare your forms, but you have to sign them. Our colleagues have always been very pleased with the results of his services.
Garth has been doing tax returns for sex workers for the past 10 years. He is a level 2 CGA with several years of accounting experience. His rates start at $50.00 for a basic return (A Basic Return is 1 person with no dependents, not married or common-law without any extra forms but the standard required). Inquire about his sliding scale for those with financial issues. You won't be turned away if you are unable to pay. Garth can be reached initially through e-mail, where he will provide a phone number: firstname.lastname@example.org.
If you would like to have your taxes prepared over the phone & through e-mail, Garth can assist you, regardless of the province you reside in.If you prefer to have your taxes prepared in person: Garth is based in Ontario and can provide in person tax preparation for those residing in and around Eastern Ontario.
Detective Wendy Leaver
Special Victims, Toronto Sex Crimes Unit
During your tenure, your genuine efforts against those who target sex workers, and your progressive methods, changed the landscape of sex worker/police relations in this city. Under your direction, we were able to report violence & crimes against us without fear of prosecution.
It is with great gratitude that we wish you farewell.
Sex Professionals of Canada