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Posted By:krysalis on: 4/12/2006 7:37:33 AM


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krysalis
Posts: 30

new job inquirery
Posted: Wednesday, April 12, 2006 7:37:33 AM
yesterday i was hired on the spot to start at a hair salon called changes naturel. the owner said they work on 60% commission but i would have to pay my own taxes.has anyone heard of this kind of pay? i never have. she said that i can deduct everthing, but she pays for the products including color. i'm not really sure what i can deduct if she is buying all the products. I'm not really sure if the is the right move for me. please give me advice if anyone has heard of this commission pay?

britboy
Posts: 2083
Platinum Member

Posted: Wednesday, April 12, 2006 8:36:50 AM

Sounds illegal to me, why not call your local IRS dept. and State tax board and run it by them.

 Ask the owner if you can talk to the other 'workers' in the salon and find out how it's working for them.

How long has this salon and owner been in business?

Talk to a tax accountant about this compensation idea.




gd
Posts: 810
Gold Member

Posted: Wednesday, April 12, 2006 10:36:19 AM
krysalis, this is a legal and common practice in the salon industry. You will be working as an independent contractor. The salon is limited as to what controls it can place on you. You will recieve a 1099 IRS form at the end of the year and are required to handle your own taxes. I would advise contacting a tax person and they will tell you exactly what you are getting into.


mina2
Posts: 432
Silver Member

Posted: Friday, April 14, 2006 12:00:26 AM

Exactly (gd) but what comes with this type of pay is FREEDOM.  You can come and go as you choose-  you can wear what you want- no strings.  If the owner tries to treat you as an employee- simply tell the owner he/she can get nailed for treating you as an employee without paying payroll taxes and THAT is illegal.



Nic
Posts: 256
Bronze Member

Posted: Friday, April 14, 2006 3:10:34 PM

Yes. It's legal. What you are is a subcontractor. It's prevalent in the real estate business as well. You will receive a 1099 from your employer if you choose to stay with this salon.

Go to www.irs.gov and click on the forms link. Scroll down to form 1040-Schedule-C and the instructions for this form... This will tell you what to use to reduce your gross 1099-misc income.

This will decrease the amount of self-employment taxes and income taxes you will have to pay.


"The truth is incontrovertible; malice may attack it, ignorance may deride it, but in the end, there it is."
Winston Churchill



vienellesalon
Posts: 2

Posted: Thursday, July 13, 2006 9:12:05 AM
THats How I am Paid, Except I get 50% com.  I Take about 18% out of each paycheck and put it into a seperate bank acct to cover my taxes.  I am just wondering though, does anyone know what all CAN be used as a deduction?  I keep all my reciepts for stuff I buy at beauty suppliers(combs,clippers,brushes,etc...), but what about work clothes? What all should I be saving the reciepts for????

doinitright
Posts: 189
Bronze Member

Things you can write off
Posted: Friday, July 14, 2006 4:32:04 AM

Mileage can be written off, keep track of the miles to and from the supply house, or bank runs.  You can write off training materials, classes and the cost of travel to and from.  Do you have a uniform dress code? If so your clothes can be deducted.  Anything you do that is work related, you may need to check with a tax advisor, or look it up on the net.  Good luck and Enjoy the great world of hair.


This is based on my experiences and beliefs, if it offends anyone I am sorry.  This is what makes this country and this site so great.

russnyc
Posts: 1145
Platinum Member

self employed
Posted: Friday, July 14, 2006 6:06:23 AM
If you haven't done this before, you need to be aware that you will need to make quarterly (every three months) tax payments. These payments can be thousands of dollars if you are a busy stylist.
You would need to budget the paycheck to accomodate these payments or you will owe a lot of money at the end of the year.

Don't get carried away with writing things off. A good accountant will guide you through proper writeoffs and ones that will get you audited.

Personally, I find it easier to have the taxes taken off my check every week as an employee.

Ultimately, if you have never worked this way before, you really should find someone experienced that can show you the ropes.Audits go back as far as seven years, and you will need to keep accurate information the entire time.



Sixty percent sounds like a lot of percentage. Make sure that you understand all the tax information, including whether or not you are responsible for any hidden charges.