do barber's pay taxes?
My friend rent's a chair do hair, she collects directly from the clinets. Is she required to pay some type of taxes?
don't you need a license to even rent a chair @ a salon /barber shop?
My friend rent's a chair do hair, she collects directly from the clinets. Is she required to pay some type of taxes?
don't you need a license to even rent a chair @ a salon /barber shop?
Comments
Yes, she is required to pay taxes. She's self-employed, which means she has to pay regular income tax, state income taxes, and self-employment (SE) tax as well. SE tax is equal to the social security and medicare taxes that you have withheld from your paycheck and your employer matches. The tax is 15.3% of 92.35% of net self-employment income. But, like I said, "She's required to pay taxes", that doesn't mean that she actually does. She might get away with not paying taxes, and then again, she might not.
I do believe that you are supposed to have some kind of license, even if it's a business permit from the town/city that she lives/works in.
If she gets cut, er caught, she could be in for a real hair-raising experience with the IRS.
All US citizens and residents who earn income are required to pay taxes. If the income is low enough, there may not be any tax liability. Your friend collects her income in cash and does not have a tax deduction. She is required to pay an estimated income tax every three months.
The IRS knows that businesses that deal primarily with cash often under report their income, and they have ways of auditing a business to determine how much income is earned. If the taxpayer is found to understate income significantly, the penalties and interest can be severe.
State laws would determine if a beauty shop worker or barber renting a chair requires a license to operate.
Are you trying to get your friend in trouble/ Just curious...But the answer to your questions are yes and yes! You friend must be licensed to cut hair and is also required to pay taxes on the income. Of course thats a cash business, so probably the minimum amount is reported
They're suppose to but thats not always the case.. My boy Vince The Barber makes a lot of money but only claims $30k.. Free money and the government can't prove anything because most transactions are cash!
In the legal sense of the question - all income is taxable. Even the tips should be reported. The chair rental should be deductible as a business expense and she needs a license to cut hair.
j
Some barbers are employees and get tax withheld from their checks, the same as anyone else. Other barbers are self-employed. They most fill out Schedule SE, Form 1040, and either Schedule C or Schedule C-EZ; write a check for the taxes that they owe; and send the check, the form, and the schedules to the IRS.
Yes. Even prostitutes pay taxes. If your friend is doing this for cash, then she might not ever get caught, but if she does, and this is considered tax evasion, which is illegal, she will be able to see you on Sundays, (visitors day at prisons).
And most states do require licenses.
Yes.