Yes, it's legal in the eyes of the Internal Revenue Service to rent booths/stations in the salon. IRS classifies stylists that rent/lease, booths/stations as Independent Contractors. The recently updated information contained in this book, cost well over $1700.00 in time, accountant/ CPA fees, materials and research, phone calls, as well as personal and group interviews with IRS personal. We wanted to be sure that everything we wrote was as up-to-date as possible. If, for example, the IRS classifies you as an employer, by not following their booth-rental (independent contractor) regulations, you could be held responsible for ALL back taxes, (city, state and federal) owed by the stylist you thought was an "independent contractor" renting a booth!
Weve all been hit with horror stories about salon owners that "got caught" by the IRS! In reality, they "got caught" because they were doing something wrong, not following regulations, or maybe playing games with the tax money! Dont expect those that "got caught" to tell you this. Youve got to ask yourself WHY - if leasing stations/booths is illegal - are so many salons doing it? Do they know something you don't! This book has been updated 5 times since it was first published. The IRS is interested in one thing; COLLECTING TAXES. Thats it. Nothing more. When IRS regulations change, so do our publication/s. We try to stay right on top of the new regulations. Why then are so many salons leasing stations/booths? FOR SURVIVAL! For most salon owners to make a decent profit these days s/he has to keep commissions below 42%! Who in the world can you get to work for 42% - besides trainees? The salon owners that are paying more than 42% are usually working themselves behind a chair! Sliding scale commission? Sure, find out what the sliding scale is! Then, when the stylist realizes what s/he could be making renting a booth, s/he quits 95% of the time.
You Get New Information and Phone Numbers of:
New IRS Form SS-8 with suggested answers for you and your CPA to fill out and submit to IRS The IRS auditing agent who spoke before a group of salon owners and stylists, at a National Hairdressers Cosmetologists Assn. meeting on booth-rentals IRS tele-tax phone number for info on Small business tax workshops Tax help for new businesses Problem Resolution Program- special help for problem tax situations (every business owner should know this number!) How to apply for tax-exempt status Local tax information for your area The proper way to declare tips Bartering Income Employee business expenses (important if you have a corporation) Bad debt deduction (bad checks and "charge" clients") Business use of home, car and entertainment expenses Educational expenses Child Care credits Highlights of new tax changes How to get an extension for your tax return Business record keeping (Important!) How to choose a tax preparer How to calculate depreciation Installment sales and equipment leasing Targeted Jobs credits
You Get Further Insights Into ...
Whether or not you can set salon business hours Whether you, as a salon owner can set "standards of performance" Must the stylist/booth-renter have their own salon key? Who sets the service prices for the booth-renters? Can you - as the owner - set a dress code for the salon? Are contracts or leases necessary for the booth-renters? Learn what you as a salon owner can, and cannot control! Must each booth-renter have their own phone? What is the first thing the Internal Revenue Service looks at to determine if there should be an audit of a booth-renting salon Learn the IRS regulations so you can decrease your chances of a booth rental salon audit What actually happens when a leasing/booth-renting - landlord/tenant relationship takes place, instead of employer/employee? Who collects the money in the salon, the booth-renter, the owner, or the receptionist? What a salon owner can, and cannot control How you can "fire" a booth-renter that doesn't work out The 20 points the IRS looks at to determine who's really in control, the booth-renter or the salon owner How you can get copies of: Revenue agents Handbook Copy of the new Taxpayers Freedom of Information Act recently enacted by Congress Who pays the receptionist? Definition of a "chair-renter" and a "booth-renter" Definitions of an Independent Contractor and an Employee What about a business license? What can you furnish a booth-renter?
You Get Over 91 of Your Questions on Booth-Rental
Booth-Renter vs. Employee
Independent Contractor & Salon Owner's Handbook;
Did you ever wonder why the stylists that lease booths/stations are top-caliber stylists? This book will explain why, plus how you can hang on to them! Like anything else, you gain from the experiences of successful salon owners, who are renting booths. Find out why 'bothersome' clients are no longer your problem as a salon owner. Learn why you needn't be concerned whether the stylists/booth renters show up for work or not. Discover why its even better for you if they dont show up! This book tells you the allowable regulations you can set in your salon if you decide to booth-rent! Youll learn how these rules can help you get rid of "troublemakers" (You can't fire them!). Know exactly what you can "furnish," and what you cant. If, after reading the book, and you dont think its worth at least twice the money, return it and well refund your money gladly.
IN ADDITION TO ALL THE INFORMATION MENTIONED