As with individuals of all vocational backgrounds, dancers face the potential threat of credit card debt. Whether accrued as a result of irresponsible spending, budgetary dependency or just unfortunate life circumstances in general, debt can become a significant barrier to financial independence. Although individuals facing credit card debt may have to have missed multiple successive payments in order to qualify for such programs, debt relief options offered by credit card companies are available for any individual facing an unmanageable amount of debt, or those who are simply unable to make minimum monthly payments to their creditors. Dancers, like other entertainers, are not only individually responsible for their own financial recordkeeping and accountability for income, but face unique circumstances under which it may be difficult to provide the documentation necessary to enroll in credit card debt relief programs.
One of the most important things for dancers to take into account when evaluating their financial situation is their standing as a non-traditional employee, viewed by the IRS as an “independent contractor,” or a person who provides services to a business that, although resemble those provided by salaried employees, are not rendered in exchange for per-hour or salaried pay. Rather, dancers, like other entertainers and independent contractors, are required to file their taxes (specifically income and expenses) in the same fashion as a sole proprietorship or, to a lesser extent, a small business. Unlike traditional employees who are considered taxable recipients of workplace compensation, most dancers do not file W-2 forms when paying their taxes, but rather, 1099 forms required for independent contractors. This means that unless dancers consistently file their taxes in this manner, allowing them to produce documented proof of income if necessary, many will have a difficult time obtaining loans, refinancing and, subsequently, the debt relief offered by traditional sources (credit card companies, lending banks, etc.).
Another factor that dancers should take into account when seeking out programs that provide credit card debt reduction services is the issue of personal financial accountability, or more specifically, whether or not the income generated by dancing is predictably consistent enough to qualify for a debt relief program. This may include calculation of average income generated over a given number of shifts, predictability of such income and incorporation of any additional sources of income into the equation. Although debt relief programs are designed with the intention of providing a reduction of one’s debt and, subsequently, lower payments and interest rates, most (if not all) of these programs will require proof of income, verifying the ability to make payments required by the specific deft relief plan in which they are attempting to enroll.
Although documentation of anticipated income over a given amount of time may technically count as legitimate (in terms of ability to be applied to any relief programs provided by creditors), such income is not the same as that received by on-payroll employees who are able to provide pay stubs and other “official” documentation of income. Thus, Dancers enrolling in debt relief programs should expect to be asked for slightly higher monthly payments than those requested of traditional, salaried employees who file standard W-2 tax forms. Further, dancers should not only file 1099 forms that are able to serve as documentation for income generated as a regularly-scheduled independent contractor, but they should also keep reports of any and all sources of income from which a case can be made that they are able to make the minimum monthly payments required by their creditors. Still, the circumstances that dancers face in nearly every aspect of financial accountability should be recognized as such, and it is never a bad idea for dancers to obtain a minimal amount of W-2 taxable employment so that at least some verifiable income can be presented to creditors offering debt relief programs.