independent contractor pay and tip question

[Pompal 09.]

Hello, I recently started working as an IC at a new local spa, we have a contract that states 50/50 plus we keep all tips, we provide our own supplies as well as laundering our own sheets/towels.

Last week he wrote us (2 therapists) a check for 1/2 of the total amount we made (our 50% + tips) and paid the other 1/2 in cash to us. Which I told him we needed documentation for our taxes, he said he was keeping track on his computer.

This week he attempted to pay me $100 in cash and the rest in the form of a check and I questioned him again because my tips alone were $245 and I don't want this recorded on a 1099 as a wage.

He is new to this and I have only worked for myself doing outcalls (which I still do on my own)

I just want to figure a simple way to track income for tax purpose and be consistent .

Should we take our tips each night and just get a check at end of week for %?

Should we get check at end of week for lump of % + tips?

Should we write him an invoice weekly for clients with % + tips?

Should we write him an invoice weekly for clients with % - tips?

Help for a newbee appreciated.

 

[mehdi m]

independent contractor pay and tip question

This week he attempted to pay me $100 in cash and the rest in the form of a check and I questioned him again because my tips alone were $245 and I don't want this recorded on a 1099 as a wage.

Bad news...tips paid to your contracting entity MUST be reported on your 1099 MISC and non-employee compensation. Legally, tips paid to you in cash must also be reported, but it is up to your personal ethics as to whether or not you report them -- sounds like you want to avoid that for some reason.

I just want to figure a simple way to track income for tax purpose and be consistent

As an IC, it is your responsibility to invoice the contracting entity for any fees or tips owed. How that entity pays them is up to them, so paying you part in cash, part in check is his choice, so long as he reports that amount on your 1099 and it matches your records.

Should we take our tips each night and just get a check at end of week for %?

Depends on the terms of your contract, but it is not required, and it does not change the reporting requirement

Should we get check at end of week for lump of % + tips?

Same as above

Should we write him an invoice weekly for clients with % + tips?

For your own protection, you should.

Should we write him an invoice weekly for clients with % - tips?

Tips have to be reported, so if you invoice without them, he is under no obligation to pay them.