What is the procedure for a stylist renting a chair from a hair salon? Does she need to report the payments on a 1099? How does the owner of the salon report the rent payments, as ordinary business income?
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Hair Salon chair rental
Question, does the person renting the chair buy their own supplies, and otherwise
performing as self employed?
Your question, though, regarding 1099, yes, a 1099 should be issued to the
owner, for the rent paid. -
chair rental
Agree with Bird Legs, you might look at MSSP info. and Pub. 4161, if you are in business for yourself then 1099 would be issue to any payment over $600 to a non corporation.
MSSP: http://unclefed.com/SurviveIRS/MSSP/beauty.pdfComment
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I agree with Gene and Bird Legs. As far as employee vs contractor, courts have gone both ways, the one below was favorable. As far as the last part of your question, I believe the owner should report as business income. Her business is leasing out chairs.
Good Luck
Dan
P.S. I heard about this board.a couple of days ago. You have some good discussions in your archives; and character!
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Employment taxes—employee vs. independent contractor—cosmetologists.
Magistrate judge recommended cancelling FUTA and FICA tax assessments against beauty salon corp., even though taxpayer wasn't entitled to §530 of '78 Revenue Act's safe harbor relief: taxpayer properly classified cosmetologists who leased chairs in taxpayer's salons and received percentage of gross receipts as independent contractors. Skilled chair lease cosmetologists controlled means and type of services they provided, had their own supplies, set their own hours, were paid per job (vs. per hour), hired assistants or paid for use of taxpayer's assistants, didn't receive employee benefits, and treated themselves as independent contractors for tax purposes; and cosmetology was licensed, distinct occupation under Ohio law. But taxpayer didn't show it made any payment on the assessments to support refund claim. (Ren-Lyn Corp. v. U.S., DC OH, 79 AFTR 2d 97-2089 )
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