The IRS Is Looking For the Ugly Truth In Your Salon Business!
Your clients come to you seeking beauty. Cuts, perms, updos, massages, manicures, tanning - whatever services you are offering to your clients to brighten their outlook on life. The IRS sees a business filled with potential worker classification issues and undereporting of income.
The salon industry is cash intensive, which makes it a prime target for an Internal Revenue Service tax audit. The books and records provided are often limited, especially in salons or shops that are not computerized. One of the biggest challenges you will encounter when responding to an Internal Revenue Service audit will be whether or not your stylists and other salon workers are properly classified.
"An employee is required to give his or her employer a written report of his or her tips for each month by the 10th day of the next month. This report is required for each month that an employee received tips of $20 or more while working for that employer."
- How are walk-ins, cancellations, and no shows designated in the appointment book?
- Does the salon offer its own line of products? Is commission income being reported properly?
- Are you reporting income from tips?
- Are hair stylists independent contractors or employees? How are the hair stylists compensated?
- If you're working 6 days a week are you reporting that you're working less than 6 days?
If you don't understand how the answers to these questions can affect your tax liability, YOU ABSOLUTELY MUST HAVE Uncle Sam's Tax Audit Assistant specifically designed for the Beauty Salon and Barber Shop Industry. Download your copy now and be ready!
TABLE OF CONTENTS
- Tips 14
- State Regulatory Authority 12
- Salon Revenue 5
- Revenue Ruling and Court Cases 12
- Other Audit Considerations 18
- Interview Guide 2
- Initial Interview and Information
- Information Document Request 4
- Industry Sources 31
- Income 5
- Glossary 27
- Fraud 8
- Employee vs. Independent Contractor 10
- Document Request 1
- Determining a Tip Rate 15
- Common Law Factors 10
- Calculating Unreported Tips 17
- Bibliography 29
- Appointment Book 6
