Social Question

elbanditoroso's avatar

How do escorts and gigolos pay income tax?

Asked by elbanditoroso (32136points) 1 month ago

I’m wondering how they classify their income – is it seen as “professional services” or “work under contract” or something else similarly bland?

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7 Answers

zenvelo's avatar

It really doesn’t matter to anyone as long as they report income consistent with their cash flow. It could be from “El B Rosos’ Escort Service”.

Entropy's avatar

So ‘escort’ can be a legal business, even in places where sex work is illegal. It’s not illegal to be a pretty girl on a date with a rich guy for money. It’s only illegal if a sex act is made for money. And if you just sort of roll one into the other, it’s not something the IRS would ever care about.

A street sex worker though, one not working for an actual business, likely wouldn’t pay taxes. They get cash, pay for things in cash, and stay off the IRS’ radar by staying in the dark economy…much like drug dealers and the like. Sure they could TRY to launder the money, but this isn’t Breaking Bad where millions are at stake. A sex worker can make decent money (depending on alot of factors), but even if they are one of the high paying ones, they’re not really a high priority target and the IRS and law enforcement generally have bigger fish to fry.

BTW – sex work should NOT be illegal. It doesn’t stop it. It makes the women involved MUCH less safe. Encourages the spread of disease. Encourages violence on the women involved, which is why they hire pimps who then take most of the proceeds.

LadyMarissa's avatar

^^ The IRS does NOT care if you’re a sex worker or a nun. Their job is to collect any taxes due. I don’t know about now; but back in the day…when hookers were arrested, they were arrested for selling their bodies…yet, they weren’t prosecuted for selling their bodies. They were prosecuted for tax evasion!!! So, many made sure to pay taxes every year as that meant that when they got arrested, they could prove they had paid their taxes & didn’t get audited. Admittedly, things may have changed since then but I doubt that the IRS cares what your job is as long as your taxes are paid & all the t’s are crossed & the i’s are dotted!!!

If you’re an independent contractor, all you need is an EiN number that links back to your SSN & you can call your business anything you like.

gondwanalon's avatar

Good one! HA!

This question is like asking, “Do drug dealers and robbers pay income tax?”.

JLoon's avatar

Most of society would like to pretend that sex work isn’t legitimate, and that in terms of the national economy it doesn’t even exist. But the reality is that in US about 15% of “law abiding citizens” pay for sex at least 6 times each year. So regardless of all the empty moralizing the demand isn’t going away, and neither is the labor force.

But the lack of serious public policy and overall criminalization means that it’s hard to do any serious study of prostitution & prostitutes that delievers accurate & consistent data.

One source estimates that there are between 1 – 2 million regular sex workers in the US:
https://prostitution.procon.org/questions/how-many-prostitutes-are-in-the-united-states-and-the-rest-of-the-world/

Other vaguely credible salary surveys claim that average annual earnings for a full time escort/prostitute are over $75,000.
https://www.simplyhired.com/salaries-k-prostitution-jobs.html

What’s missing from almost all reports that claim to assess the economics of sex work are standardized methodology and long term follow ups, along with missing calculations on the extremely high overhead costs professional escorts & street prostitutes pay to carry out their business (up to 50% of earned income taken by pimps & agencies).

But assuming available information has at least ballpark accuracy, a reasonable guess is that sex workers contribute roughly $76bil in total dollar value to the US economy each year. And because there’s no 401k retirement plan for the women (and men) who provide these services, the only way for them to build any long term security for themselves is to find a way to legally report and pay taxes. And as others on this thread have suggested, there are in fact accepted methods to do just that.

Because even if God doesn’t love hookers the IRS does – as long as they file their returns.

HP's avatar

Well…my imagination tells me that a lot of folks in the industry understand the outstanding advantage to a cash business. Consider, for example, the difficulties in obtaining evidence in regard to an audit.

JLeslie's avatar

I’m guessing a lot if it is under the table.

What is above the table I would assume people get creative. Maybe personal assistant?

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