Self Employed BarMaid

[Snaggletooth]

We have some high-class drinking places as well as some sleazy honky-tonks. The high-class places issue W-2s with allocated tips.

The sleazy places are often report nothing at all. If a barmaid in such a place wants to file her return and claim her income, where does she report her tips? As an integral part of her revenue (subject to Schedule SE) or separated such that the tax appears on line 58 of Form 1040?

[momona]

I know there is a form that the IRS has that you can file if you are disputing form 1099 being used instead of W-2. Sorry I can't remember the form number but I hope this can point you in the correct direction.

[TAXNJ]

If you think this might apply to your scenario, See forms 4137 and/or 4852

[ToledoEd]

If the bar tender is reporting income as self employment, then the tips go on Sch C along with anything the bar pays them to be there. Often the bar does not pay anything and the bar tender only has tip income. Advise client to have a daily log of income as the IRS does check these returns out due to the lack of records (everything is cash) and the fact that most of these self employed bar workers qualify for EIC.

[Roland Slugg]

Concur with ToledoEd. Everything should be reported on her Schedule C. F-4137 and F-4852, suggested in another reply above, don't apply to a self-employed person. The titles of those forms alone make that quite clear.

The main concern, of course, is the bar's treatment of its cocktail waitresses as ICs. That is not likely to be correct, which raises a whole host of other issues. There is a special form the woman can use to address this if she wishes ... see F-8919.

[TAXNJ]

would agree with R. Slugg post but see what form fits your scenario. Yes, as the Original Poster may be aware, this type of scenario may open an number of other issues so key is "Employee or independent contractor? – That is the question" then one gets into was a form w-9 provided or an SS8 (which may or may not been provided).

Good luck.