I’m adding this to my blog out of the sheer overwhelming questions I get and see about this. What do I do with my allowance? Can I deposit my allowance into the bank? How do I pay my bills without depositing money in the bank? Let’s discuss allowances.
So you found a good Sugar Daddy, he gives you a well-deserved 2K a month and the obvious thing to do is go shopping err…. deposit it in the bank. Right? WRONG! First thing you should do, check your local bank laws. Most of the banking laws are pretty widespread, but you should study your particular state’s law just to be sure. We all know that if you make a deposit that exceeds $10,000 that your bank is required to report the deposit to the IRS. And as long as you have a legitimate reason for a large deposit, you should not have any problems with your bank or the IRS. Can you give a legitimate reason? Did you know that deposits of over $2,000 can also be reported, but are less likely to be followed up on?
If your Sugar Daddy is married and has a deep pocket for his mistress(you) it has been ruled to be exempt from tax by the courts, but he probably doesn’t want the IRS snooping around any more than necessary. Anything that you do to hide a cash transaction is technically money laundering and illegal, even if the money is legit. The Sugar Baby can get in trouble for that, not a Sugar Daddy. That being said- banks are obligated to report any suspicious activity over $2,000. HOWEVER, every time that you deposit $100, $300, or even $10, the transition leaves a permanent mark and the government has access to that, even if the bank never files a Suspicious Activity Report.
So how can you pay for bills if you can’t put your money in the bank? You can take the cash and spend whatever you want, obviously. You can buy money orders (less than $2000 a day is not reported) from the post office or Wal-Mart or wherever (NOT the free money order your bank provides, because they will register the cash in your account and then buy the money order from the money in your account). Then you can use money orders to pay for rent, credit card bills, whatever. I know it can be inconvenient, but it is the safest route. And of course, you can deposit small amounts (well below 2K), but the IRS can come along and ask you where you got the money. My golden rule is: If I can’t show where it came from, I don’t give it a paper trail.
Can I call it a gift? If you call it a gift and it amounts to more than 13K per year, your SD will have to report it on his gift tax return, and I can guarantee you that he won’t want to put your name on an official document his wife has to sign and then file that with the IRS. And I can also guarantee you that if the IRS comes around asking questions from your married SD, you will be history quick.
What do I do with my money? I personally like to handle my money in cash. I keep it at home until it reaches a certain amount and then I take it to my lock box at my bank. (Please do not stick 2 grand in your sock drawer)
This is about the extent of my knowledge on this subject. I hope you found this helpful!
