Split decisions

[pasanun s]

I have been offered space at in in-home massage office.

She asks for a 40/60 split, and will provide everything but the clients.

My question is, do I take the 30% for Uncle Sam and his various cousins out before or after I take out her 40%? With my current on-site seated massage business, taxes come first, but there is minimal overhead.

And of course, with any other job I've ever had, taxes were paid before I even saw my share, then everyone else gets theirs, ya know?

So, at the moment I am a bit confused and know y'all could help

 

[ecogrl23]

It depend on who collects the money - you or her. If she collects it and then pays you you don't have to claim the other 60%.

If you collect it and then pay her you do have to pay taxes on the whole amount but you will get to deduct the pay out to her.

You should also look into if you should really be considered a full employee as most independent contractors really should be I think legally (but I am not a lawyer!)

I recommend paying a flat monthly rent because it is just a cleaner relationship.

Julie

 

[Robert S]

Thanks for your reply, Julie. I have met with her since I made the post. She told me that the client makes the check to her, then she pays me. She also said that I will get a 1099 at the end of the year that states my income and that I am responsible for my taxes.

I don't know for sure, but with my clients making a check out to her business then she paying me, it sounds like I am her employee, but she is "calling" me an independent contractor.

Off to dig out my Business Mastery book and read up on the difference

 

[meekless2001]

Yes this is one of the biggest areas of confusion. I think that most massage therapists should actually be employees instead of contractors. I have written some on it on my site with links to some references on the irs site.

http://www.thebodyworker.com/employmentvscontractor.html

As an independent contractor you can set your own hours and do what you want to do. That is the biggest thing I know.

Julie

 

[Jake R]

I have been going over your post now for days, and am still a little confused. I am sorry about that, but if I am confused, maybe others are too and that is why you haven't had too many responses.

You mentioned:

I have been offered space at in in-home massage office.

She asks for a 40/60 split, and will provide everything but the clients.

I have met with her since I made the post. She told me that the client makes the check to her, then she pays me. She also said that I will get a 1099 at the end of the year that states my income and that I am responsible for my taxes.

I don't know for sure, but with my clients making a check out to her business then she paying me, it sounds like I am her employee, but she is "calling" me an independent contractor.

I hope she is paying you the 60%.

Regarding "your" clients: are you saying that this is the only place you will be seeing clients at (besides your chair massage business), and that you don't/won't have another facility to work out of and therefore "your" clients will be coming there for massage? I don't guess it matters, but I am just generally trying to work out answers to your questions.

I have worked in places before where I was an IC and the client (my referral to the business... or not) wrote a check out to the company or spa. You might indeed be an employee if she tells you what to do and how to do it, but I'd figure that's just something the two of you should decide on as far as comfort level. I don't think you are considered an employee just because she is writing you a check off of clients that you refer into the business though.

My question is, do I take the 30% for Uncle Sam and his various cousins out before or after I take out her 40%? With my current on-site seated massage business, taxes come first, but there is minimal overhead.

And of course, with any other job I've ever had, taxes were paid before I even saw my share, then everyone else gets theirs, ya know?

I think you have to do what is right for you. When I was an IC, I never had the ability to take out my taxes ahead of time. It was always a wonderful idea, but my finances were never in good enough shape to do that easily. If you can take a certain perceneforum.xxxe out ahead of time, I think it makes good sense. If not, you'll just have to make up for it when they are due. Or, you can wait until your taxes are filed and then pay the govt. on the installment plan. Never fun, but they do have it avaliable.

When I get a little time, I can try to pull some IC vs. Employee threads from the forum for you, that may have some other help in them.