subject: Reporting Tips In The Beauty Industry [print this page] Beauty industry professionals encounter a completely atypical challenge when it comes to their tax records. Since a significant portion of beauty business transactions involve cash, many professionals fail to properly report their entire income, whether intentionally or not. Consequently, the IRS has created a special program specifically aimed at the beauty industry.
The best way to avoid unnecessary stress from a government audit is to be prepared. There are a number of different avenues you can venture down in order to properly organize your finances. On a basic level, you should review IRS Pub 531, IRS Pub 3148, and IRS Pub 1244 via the official website of the Internal Revenue Service, www.irs.gov. These documents can give you a clear understanding of what and how the law requires you to report your income.
Keeping detailed records of your finances is an absolute necessity. In the event of an audit, the IRS will need you to provide a thorough account of all tips, commission, rent, or anything else that could possibly add to your income. The more documentation you can provide the better. Knowing your responsibilities can ease the complexity of essential beauty taxonomy.
Although many industry professionals choose to chance it in regards to proper tip reporting, this is not a safe bet by any means. As with any job associated within the realm of the service industry, an IRS audit should be looked at in terms of when, not if. Unless you can prove otherwise, the IRS will assume a certain level of tip income based upon a number of different considerations and assess any taxes based upon those postulations.
Seeking professional help from a tax strategist can also prove invaluable. Specialists maintain a comprehensive insight and can clearly explain what you need to do to track and file your taxes properly. Keep in mind that although outsourcing tax help from can become costly, it is a sound investment and can help you avoid a lot of future turmoil.
As a beauty industry professional, being organized is the best way to evade potential problems from the Internal Revenue Service. By thoroughly understanding your tax responsibilities, you can arrange your finances and properly report your income. Be prepared when it comes to reporting your taxes; and most importantly, be honest.
by: Bert Carder
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