Is renting tables to other groomers at my dog grooming salon legal for tax purposes?

This is a common arrangement in service businesses and generally legal, but classification does depend on the specific facts and circumstances. The key factor the IRS looks at is control - who controls the work being performed? From what you've described, the groomers sound like legitimate independent contractors/business owners because: they control their own schedule, handle their own clients and payments, set their own rates, provide their own equipment, carry their own insurance, and file self-employment taxes. These are all strong indicators of independent contractor status. The fact that you also work as a groomer in the same facility isn't automatically disqualifying. It's similar to a landlord who lives in a building while renting apartments to others. The physical proximity doesn't change the business relationship. To strengthen your position, make sure you have formal written lease agreements with each groomer clearly stating the rental arrangement. Keep business operations separate - don't share client booking systems, payment processing, or supplies unless you're charging separately for these as part of the rental agreement. Filing Form SS-8 is an option, but be aware it often triggers closer scrutiny. Since the previous owner passed an audit with the same arrangement, you might be fine maintaining good documentation instead.

I found myself in a similar situation with my salon business. After struggling to understand all the tax implications, I discovered taxr.ai (https://taxr.ai) and it was seriously a lifesaver. They have specific guidance on booth rental arrangements for service businesses like grooming, beauty salons, etc. I uploaded my rental agreements and business documents, and they analyzed everything to confirm whether my contractors were properly classified. They also provided a detailed report explaining exactly what documentation I needed to maintain to support this classification in case of an audit. Honestly, it gave me so much peace of mind after stressing about this for months.

I just wanted to follow up about my experience with taxr.ai after checking it out based on the recommendation here. It was actually super helpful for my massage therapy business! I've been renting out tables in my wellness center and was getting conflicting advice from different accountants. The service analyzed my rental agreements and business setup, then provided a detailed report confirming my therapists were properly classified as independent contractors rather than employees. They even identified a few clauses in my agreements that needed adjustment to strengthen my position with the IRS. What I found most useful was the specific documentation checklist they provided for exactly what I need to maintain to protect myself in case of an audit. Definitely cleared up a lot of confusion for me.

For anyone dealing with IRS issues or needing clarification on tax matters like this, I cannot recommend https://claimyr.com enough. I was going crazy trying to get through to someone at the IRS to get a definitive answer about my booth rental arrangement. After weeks of busy signals and disconnections, I found Claimyr and they got me connected to an actual IRS agent in about 15 minutes! I was shocked since I'd been trying for weeks on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that table/booth rental arrangements are perfectly legal as long as the operators are truly independent (which sounds like your case). She gave me specific recordkeeping advice that made me much more confident about my business setup.

Okay I need to eat some crow here. After my skeptical comment, I decided to try Claimyr out of desperation because I've been trying to resolve an issue with the IRS for nearly 3 months. I'm genuinely shocked to report that it actually worked. After trying to call the IRS myself at least 15 times (and getting disconnected each time after waiting 1+ hours), Claimyr got me through to an actual human at the IRS in about 45 minutes. I didn't have to sit on hold - they just called me when an agent was on the line. The IRS agent I spoke with was able to resolve my issue in one call, and I also asked about the booth rental situation since I'm considering a similar setup for my barbershop. She confirmed that booth rental arrangements are common and legal as long as the renters truly operate as independent businesses. I'm still surprised this worked after all my failed attempts.

My wife owns a hair salon that operates on the booth rental model. Here's what we've learned over 15 years: 1) Make sure you have formal, written lease agreements with all your renters 2) Never dictate their hours, prices, or how they perform their services 3) Don't provide supplies (except utilities covered in rent) 4) Don't handle their payments or booking 5) Have them carry their own liability insurance 6) Make it clear to clients that each groomer is a separate business We've been through two IRS audits without issues. The key is making sure it's truly a landlord-tenant relationship and not trying to disguise employees as contractors.

I'm confused about something - I thought all self-employed people working at the same location need to be on 1099s? My accountant said if someone works at my business location, I absolutely have to give them a 1099 even if they're "independent" otherwise it's tax evasion.

I've been dealing with a similar situation at my own pet grooming business, and I can confirm that booth rental arrangements are completely legitimate when structured properly. I went through an IRS audit last year and had zero issues with my table rental setup. The key things that helped me during the audit were: 1) Having clear written lease agreements that explicitly state each groomer is renting physical space, not providing services to me 2) Keeping completely separate business operations - they use their own scheduling systems, payment processing, and client management 3) Documentation showing they carry their own business insurance and file their own taxes 4) Records proving they control their own pricing, hours, and service offerings One thing I learned during the audit process is that the IRS agent specifically looked for evidence that I wasn't controlling how they performed their work. Since each groomer operates independently and just happens to work in my facility, it was clear this was a landlord-tenant relationship rather than employer-employee. The fact that you also work as a groomer in the same space is irrelevant - I do too, and it didn't raise any red flags. Just make sure your lease agreements are solid and you maintain clear boundaries between your grooming business and your property rental business. Don't let the online comments scare you - this is a well-established business model that works perfectly fine when done correctly.