The business of escorting

[noneasgood]

Over the last couple of months I've had discussions with a number of SP's regarding their finances and thought it might make for an interesting thread.

Basically may of the questions revolve around establishing a credit rating. With that in mind, here are a few pointers. Others will undoubtably expand on these.

If one wants to establish a credit rating, the first thing to do is contact a credit agency (ie equinox, transcanada credit) and determine what your current credit situation is. Good or bad, make sure the information on your file is accurate. This should probably be done one a year or once over other year. In addition to the activities over a number of years, you'll also get a FICO score. By law the service is free via mail, but one can pay about $22 and get this information immediately.

https://www.econsumer.equifax.ca/ca/main?link=OPIEM&lang=en

Essentially credit is evaluated on the following: capacity, character, collaterial, consistency,

For those who want to qualify for mortgages, you should probably claim a portion of your income for tax purposes. (legally you should claim it all) but this can be offset with legit expenses (ie travel, supplies rental expense etc)
you can also use RRSP's to reduce your income and this might help you buy a place as you can borrow up to $20,000 of RRSP funds, if you qualify for the 1st time home buyers. Generally the banks want three years of tax returns and notice of assessments (NOA) although some lending institutions are less stringent than others.

Generally speaking the maximum one can borrow (ie debt payments/gross earnings) is about 40%. This includes all debt payments including mortgages. Normally the maximum for mortgages is 32%, which would allow for an additional 8% in other types of debts. (ie credit cards, car payments etc)

Anyway, this is a good beginning on this topic.

 

[noneasgood]

Find me ONE provider in this city who declares any of her sex income and I'll buy you a session with her!

You might be right, But some are certainly trying to establish credit because they've asked me questions related to this topic.

I honestly think people under estimate the importance of credit in our society. A good credit rating is easily one of the most important things anyone can own. And pooners might also get so helpful tips..who knows.

But if there is no interest than this thread will simply sink like a rock, which would be fine with me.

 

[noneasgood]

Find me ONE provider in this city who declares any of her sex income and I'll buy you a session with her!

Only one? You're making the choice hard.

 

[noneasgood]

Not to knock Ingrid or A-L (I've never met them), but I'm a little skeptical that an SP would declare that income and pay taxes and CPP on the earnings....unless they're just declaring enough to cover expenses and showing no net income. That's not really honest, so it doesn't qualify........

I will guess that you are wrong for the reasons I've outlined, which is that a credit rating is more important than the complete avoidance of tax.

Most people who have owned property over the last few years have made way more in unrealized gains on their properties than they've made working.

And you really don't have to meet them, I'll meet them..you just send money!!

 

[noneasgood]

You make a good point re: credit. It is quite important and IN THE BIG PIC may be worth more than the taxes that they would pay.

I just don't think that too many people who are paid in cash take that position.

But you are quite correct in theory.

It's not theory, it works in practice too and it sounds to me like this is exactly what Ingrid and A-L are doing.

 

[Randy Whorewald]

SP's and Taxes

I think a larger number than you think actually declare some income. Of course they're not going to come on here an state that they are doing that. It wouldn't be too smart for them to start bragging publicly that they aren't declaring ALL their income.

 

[JMBrowning]

Find me ONE provider in this city who declares any of her sex income and I'll buy you a session with her!

How the providers declare their sex income during tax time is their business.
As long they are paying their taxes, it's none of the tax collector's business the title of the providers' job.

They can always say that they work as "Independent Therapists".

 

[noneasgood]

The more annoying issue is that I'm sure in addition to paying income tax and cpp * 2, they should also be paying GST if they've declared more than $30,000 in income.


Now hypothetically if they wanted to buy an appartment for $200k and they had a downpayment of say $50k plus another 3k or so for property purchase tax and legal fees, they would need a mortgage of about 150,000 which guessing would be in the range of about 850 a month depending on the interest rate and the amortization period (25 years most common). So working backwards, 850*12 = 10,200 10,200/.32 = 31,875 a year.

http://www.canadamortgage.com/calculators/convhighratio.cgi

 

[JMBrowning]

The more annoying issue is that I'm sure in addition to paying income tax and cpp * 2, they should also be paying GST if they've declared more than $30,000 in income.

Forgive me my ignorance as I don't live in Canada, what is a GST?
Also, is the cpp (Canadian Pension Plan) the same as social security, some sort of retirement account?
does income tax depends on which province you live? I heard that Alberta has no income tax. Please correct me if I'm wrong.

 

[noneasgood]

Forgive me my ignorance as I don't live in Canada, what is a GST?
Also, is the cpp (Canadian Pension Plan) the same as social security, some sort of retirement account?
does income tax depends on which province you live? I heard that Alberta has no income tax. Please correct me if I'm wrong.

GST is goods and services tax. Except for a few except items such as food, medical services and insurance..most services and goods sold require that you charge GST on these items once your income exceeds $30,000. You can then claim the GST on the expenses you incurred to earn this income and remit the difference. Alternative you can elect to use the quick method and just remit 5% of the income you earn and not worry about the expenses.

Yes, CPP stands for Canada Pension Plan,which is a retirement account. Proprietors, (ie self employed, unincorporated businesses) have to remit both the employee and employer portion of the CPP.

Alberta has a flat tax. But the highest rate is 39%, most of which is federal.
They have no sales tax however.

 

[JMBrowning]

Yes, CPP stands for Canada Pension Plan,which is a retirement account. Proprietors, (ie self employed, unincorporated businesses) have to remit both the employee and employer portion of the CPP.

I guess one is better off employed by someone else than self-employed. Similar to here in the States.

Alberta has a flat tax. But the highest rate is 39%, most of which is federal.
They have no sales tax however.

39% for everyone???

I wonder how much percentage of the salary is deducted in Canada. Is 40-45% of your salary gone to taxes a ballpark number?

 

[JMBrowning]

silkrose and noneasgood...

Thanks for the info.

And I thought I was getting taxed quite a bit in the States. It sounds you are all taxed higher than us.

Well... I guess you have better benefits than us as well.

 

[noneasgood]

misleading my apologies

Thanks for the info.

And I thought I was getting taxed quite a bit in the States. It sounds you are all taxed higher than us.

Well... I guess you have better benefits than us as well.

Actually, please allow me to back up.. The Alberta rate I quoted was the highest marginal tax rate in the province and only applies to income at the highest tax bracket. Most peoples average tax is around 20-25% depending on income. For example you wouldn't pay any tax on the first 8,000 then it gradually increases. As far as whether or not it's better to be an employee or self employed it's a cost verses opportunity calculation. I'm a self employed incorporated individual and I'm much better of than most employees. As far as HST goes that applies to the maritime provinces. ie Newfoundland, PEI, Nova Scotia, New Brunswick. It is a flat 15% tax and essentially is the GST and the provincial sales tax rolled into one.

 

[JMBrowning]

I'm a self employed incorporated individual and I'm much better of than most employees.

In that respect, a self employed individual is better off in Canada than in the States. A self employed individual in the States tends to pay a lot more taxes than an employee, but he can make a lot of deductions. I guess you can make a lot of deductions as a self employed individual.

 

[noneasgood]

In that respect, a self employed individual is better off in Canada than in the States. A self employed individual in the States tends to pay a lot more taxes than an employee, but he can make a lot of deductions. I guess you can make a lot of deductions as a self employed individual.

The actual allowable deductions are pretty much the same between self -employed and incorporated. The basic criteria is whether or not the expense relates to the income being claimed. If so, it's usually deductible, although large items such as cars and computers have to be depreciated over time. Incorporations allow for additional options, such has having family members as shareholders, retaining the income in the corporation (tax approx 20%) and defer taxes using bonuses payable and the like. They may also be entitled to the $500,000 capital gains exemption upon their sale, subject to some conditions.

 

[Maury Beniowski]

Yes, CPP stands for Canada Pension Plan,which is a retirement account. Proprietors, (ie self employed, unincorporated businesses) have to remit both the employee and employer portion of the CPP.

It would be nice if CPP was a retirement account, but it isn't. All remittances to the government go into one account called, General Revenue. That keeps things very simple. From there it is dispensed in every which way imaginable. However, any linkage between the source and the destination is non-existent. This is why revenues from fuel taxes far outnumber the amounts destined for road planning, construction and maintenance. The same applies to CPP.

And BTW, I've never met an SP who doesn't pay her fair share of taxes in Canada, whether Income, Sales or otherwise (direct and indirect). To suggest otherwise is preposterous. Remember the old saying, "The only sure things in life are death and taxes". Both are in a word, inescapable...

 

[JMBrowning]

It would be nice if CPP was a retirement account, but it isn't. All remittances to the government go into one account called, General Revenue. That keeps things very simple. From there it is dispensed in every which way imaginable. However, any linkage between the source and the destination is non-existent. This is why revenues from fuel taxes far outnumber the amounts destined for road planning, construction and maintenance. The same applies to CPP.

It sounds like fleecing just like what they're trying to do, if not doing right now, with the Social Security here in the U.S.

And BTW, I've never met an SP who doesn't pay her fair share of taxes in Canada, whether Income, Sales or otherwise (direct and indirect).

I read that if the SP has advertisements, she has to pay taxes. Correct me if I'm wrong.

To suggest otherwise is preposterous. Remember the old saying, "The only sure things in life are death and taxes". Both are in a word, inescapable...

How true.

 

[noneasgood]

It would be nice if CPP was a retirement account, but it isn't. All remittances to the government go into one account called, General Revenue. That keeps things very simple. From there it is dispensed in every which way imaginable. However, any linkage between the source and the destination is non-existent. This is why revenues from fuel taxes far outnumber the amounts destined for road planning, construction and maintenance. The same applies to CPP.

And BTW, I've never met an SP who doesn't pay her fair share of taxes in Canada, whether Income, Sales or otherwise (direct and indirect). To suggest otherwise is preposterous. Remember the old saying, "The only sure things in life are death and taxes". Both are in a word, inescapable...

Actually you are wrong about this. CPP is self funded and is exclusively for retirement. This is why the rates went up a few years back and continue to increase if necessary. There is a CPP commitee that hires various outside parties to manage this money. Historically this money was lend to the provinces at low interest rates, however, about 5 years ago the government allowed part of these funds to be investment in equities.

This was taken from the link below.

"Steps were taken in 1998 to ensure the CPP's continued sustainability. Actuarial reports confirm that the scheduled contribution rate is expected to be sufficient to sustain the Plan as larger numbers of Canadians reach retirement age."


However, this doesn't mean you will get out of it what you paid. Some, particularly those who are in their 70's now, will get much more out of it than they paid. Those younger than me are likely to get less. Essentially the younger generation is funding the retirement of the previous one. OAS on the other hand comes out of general revenue and is subject to being clawed back once your income exceeds $60K

http://www.sdc.gc.ca/en/isp/common/ris/ristoc.shtml