< Back to IRS

Aaliyah Jackson

Is it legal for me to rent a table at a dog grooming salon as a self-employed groomer?

I'm currently self-employed as a dog groomer and I rent a table at a local salon. Everyone here operates as their own separate business and just pays rent to the owner (who also grooms dogs herself) for using the space and facilities. I'm about to leave the salon, so the owner posted an ad for my table, but she's getting a lot of pushback from people saying this arrangement is completely illegal and that she'll be in serious trouble if she gets audited. The weird thing is, the previous owner ran the shop exactly the same way, actually got audited, and passed without any issues. I've been researching like crazy trying to understand what's going on. I know the IRS is concerned about businesses misclassifying employees as independent contractors to avoid taxes, but that's definitely NOT what's happening here. I'm truly independent - my clients call my personal number, I handle all payments through my own processing system, set my own rates, create my own schedule, buy all my supplies and equipment, carry my own business insurance, and file Schedule C for self-employment income. My relationship with the salon owner is purely a rental agreement. I don't even think of myself as an "independent contractor" since I'm not contracted to do any work for her - I literally just signed a lease agreeing to pay a monthly fee to use the space. People keep telling us that because the owner also works at the salon as a groomer herself, it's somehow illegal for her to rent space to other groomers. From what I've found, this doesn't seem accurate, but information is really scarce. I did find Form SS-8 "Determination of Worker Status" - would it help if the owner filled this out to get an official ruling from the IRS? Is there something we're missing about the legality of this setup?

This is actually a pretty common arrangement in personal service businesses like salons, and you're right to focus on the level of control. The IRS uses a 20-factor test to determine worker classification, but it boils down to three main categories: behavioral control, financial control, and relationship type. Based on what you've described, you're clearly operating as an independent business. You control your work (schedule, clients, methods), you have financial independence (own equipment, setting prices, payment processing), and your relationship is a landlord-tenant agreement rather than employer-employee. The confusion people have likely stems from seeing similar setups where salon owners try to classify workers as independent while still controlling their schedules, clients, prices, etc. That's wage theft and tax evasion. Your situation is different. Form SS-8 is exactly the right approach if you want certainty. It allows the IRS to make an official determination. Just know it can take 6+ months to get a response. The owner could also consult with a tax professional who specializes in small business classifications to get documentation supporting the arrangement. Keep good records of your business operations separate from the salon owner's business. That independence is your best evidence.

0 coins

Thanks for the detailed response! Question though - does it matter that we're all providing the same service (dog grooming) in the same location? I've heard that can be a red flag for the IRS. Also, are there any specific records you'd recommend keeping to demonstrate independence?

0 coins

Providing the same service in the same location isn't automatically a problem. Think of it like a co-working space for groomers. What matters is maintaining that true independence in how you operate. For records, I'd recommend keeping copies of your lease agreement, your own business registration documents, copies of your own insurance policies, records of purchasing your own supplies, your own client list and appointment schedule, and documentation of your own payment processing system. Also keep track of how clients find and book with you specifically rather than the salon generally.

0 coins

I was in a very similar situation running my own mobile massage business while renting space in a wellness center. What really helped me was using taxr.ai to analyze my business structure. I uploaded my rental agreement and business formation documents at https://taxr.ai and their system confirmed I was operating as a legitimate independent business rather than a misclassified employee. They analyzed the 20-factor IRS test and showed exactly how my operation met the independence requirements. It gave me peace of mind and documentation I could show if ever questioned. The analysis highlighted specific aspects of my business that demonstrated proper classification and suggested a few small changes to strengthen my independent status. Might be worth checking out before going through the longer Form SS-8 process.

0 coins

How long did it take to get results back? And does it actually give you official documentation that would hold up if questioned by the IRS?

0 coins

I'm skeptical about these online services. Did you have to provide sensitive financial info? I'm always worried about identity theft with these kinds of things.

0 coins

The analysis came back in about 48 hours, which was much faster than I expected. It's not an official IRS determination like Form SS-8, but it provides expert documentation of your business structure that shows you've done due diligence in establishing proper classification. For your second question, I only needed to provide my business formation documents and rental agreement - no sensitive personal financial information like SSN or bank accounts. They analyze the business relationship structure, not your personal finances. Their privacy policy was very reassuring, and they use bank-level encryption for all document uploads.

0 coins

Just wanted to follow up - I was initially skeptical about taxr.ai but decided to try it after dealing with some classification concerns in my barbershop. I'm really glad I did! The analysis was comprehensive and pointed out several aspects of my chair rental agreement that actually needed strengthening. They identified that my agreement didn't clearly establish my control over my own client records and suggested specific language to add. Made those changes and now feel much more confident about my status. The documentation they provided has already come in handy when talking with my accountant about tax planning. Definitely worth it for the peace of mind alone.

0 coins

Been dealing with the IRS for YEARS trying to get someone on the phone about a similar situation with my tattoo shop. After countless hours on hold, I finally used Claimyr (https://claimyr.com) and had someone from the IRS call ME back within an hour. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent confirmed that booth/chair/table rental models are completely legitimate when properly structured. The key is having a proper rental agreement and true independence. They explained that they mainly look for misclassification when the "rental" is actually a commission split or when the owner controls scheduling, client assignment, pricing, etc. I was honestly shocked at how quick and painless the process was after struggling for so long to get answers. They also sent me some official guidance documents after our call that I keep with my business records.

0 coins

How exactly does this work? I don't understand how they can get the IRS to call you when I've waited on hold for 3+ hours multiple times.

0 coins

Sounds like BS honestly. Nobody can magically make the IRS call you back. They're probably just selling your info to scammers.

0 coins

It's a callback service that navigates the IRS phone system for you. They use technology to wait on hold in your place, and when they reach an agent, they transfer the call to your phone. It's completely legit - they don't talk to the IRS for you or access any of your tax info. The reason it works is because they have systems that can handle the waiting process automatically. You're right to be skeptical - I was too! But they don't ask for any sensitive information. They just need your phone number to connect the call when an agent is reached. The IRS has no idea you used a service - they just think you were the one on hold the whole time.

0 coins

I need to apologize for my skeptical comment. I actually tried Claimyr yesterday after continuing to get nowhere with the IRS on my own. Not only did I get a callback in about 45 minutes, but I was able to speak with someone who completely cleared up my misclassification concerns. The agent confirmed that my booth rental arrangement at my nail salon is perfectly legal since I have a written lease agreement, set my own hours, handle my own clients and payments, and purchase my own supplies. They even emailed me some documentation afterward that I can keep for my records. I'm still surprised it actually worked. After trying for weeks to get through on my own, it was kind of amazing to just receive a call with an IRS agent already on the line. Saved me hours of frustration.

0 coins

Former IRS employee here. Table/booth rental arrangements are completely legal when properly structured. What the IRS looks for is whether the facts support the classification. The key factors specific to salon situations: 1. Written rental agreement with fixed payments (not commission-based) 2. Renter controls their own schedule and clients 3. Renter has their own business name, cards, advertising 4. Renter purchases their own supplies and equipment 5. Renter handles their own payments from clients 6. No requirements about hours, services offered, or prices Based on what you described, you're on solid ground. Just make sure everyone has proper documentation. The salon owner should consider having a tax professional review their setup and draft a proper booth rental agreement template if they don't already have one.

0 coins

What about shared resources like washing equipment, reception area, etc.? Does that muddy the waters at all? Our salon has these common areas that everyone uses.

0 coins

Shared resources are perfectly fine and actually very common in these arrangements. Think of it like renting an apartment that includes shared laundry facilities or a common lobby. The rental agreement should specify what shared resources are included in the rent payment. As long as those common areas are available to all renters without the owner controlling when or how they're used, it doesn't impact independence. Just make sure the agreement clearly separates the rental payment from any control over how you conduct your business.

0 coins

I had almost the exact same situation at a pet salon in Texas. Make sure your contract specifically states you're renting SPACE, not working for a percentage. Also, double check your state's regulations too - some states have additional rules beyond the IRS requirements. In my case, we all had to get our own business licenses, display our own price lists, and maintain separate appointment books to clearly show we were independent. Our shop owner actually got sued by someone who claimed they were misclassified, but the case was dismissed because we had all the proper documentation.

0 coins

Thanks for sharing your experience. I didn't even think about checking state-specific regulations. I'll definitely look into that. Did your salon owner do anything special with the rental agreements or business structure after going through that lawsuit?

0 coins

After the lawsuit scare, our owner got much more formal with everything. She had a lawyer create a standardized booth rental agreement that explicitly stated we were not employees and had no expectation of benefits or protection under employment laws. She also required all of us to provide proof of our business registration and insurance policies annually. One smart thing she did was create a separate LLC that owned the building, and then her grooming business just rented space there like the rest of us. That extra layer of separation made it super clear that the relationship was landlord/tenant rather than employer/worker. The owner also stopped providing any supplies at all - even things like shampoo and cleaning products had to be purchased individually or through a cost-sharing agreement between groomers. It was slightly less convenient but much cleaner from a business separation standpoint.

0 coins

IRS AI

Expert Assistant
Secure

Powered by Claimyr AI

T
I
+
20,087 users helped today