Hairdressers

[Edsel]

I'm sure some of you have cosmetologists as clients.  I'm thinking of getting rid of mine.  Some 7-8 of them.

They take checks and mostly cash, which there's no way to know how honest their reporting.  And booth rent is worse.

How many of them actually give out 1099-MISC for booth rent?  Is it necessary if this is equipment rent instead of space rent?

Come to think of it -- which is it?  Space rent or equipment rent?  By the way, this has ramifications for the recipient of the rent, since if it is rent for personal property, the rental income is subject to self-employment tax.

Too messy for me.  Comments??

[ILLMAS]

Try offering monthly accounting to them, collect necessary w9, most likely the client won’t want the service but  you tell them you are moving into a different direction.  Basically the client will fire themselves.

[JohnH]

This is one of those areas where a copy of the Audit Techniques Guide can come in handy.  Just give a copy of it to the prospective client and tell them "This is what the IRS is going to be looking for if you're audited.  I'll be doing your accounting based on this document. Fees will be proportional to the work involved."   Then, as LLMAS said, they will probably fire themselves before you ever get started.

https://www.irs.gov/pub/irs-utl/cashchapter10_210745.pdf    

[FDNY]

I'll be keeping my hairdresser.  It's very simple, she receives a 1099 from owner, no other financial transactions such as product and rent.  Besides, I need her for her mousse recommendations as I don't have the lustrous hair from years ago.

[Catherine]

My hairdresser will certainly be kept - she's my daughter.  Plus she works for a place that employs her, so she gets a W-2 with tips listed.  Very few pay cash tips in her shop, and she tracks those.