My wife is a piano teacher at a local music school. They basically treat her as an independent contractor. She gets a 1099-NEC, with only box 1 filled out. However, in her contract, part of her "pay" is withheld by the business owner to pay for their building/teaching space/admin costs. In other words, she is told she makes $50/hr, but $20 is retained by the music school, and $30 is paid to her as non-employee income.
The $20 that is withheld does not show up on a tax form she gets. Is this normal? Can I report the $20 as a building rental expense? (Which would otherwise be claimable, from what I read in Turbo Tax.)
In other words:
1) Is this legal/normal? 🙂
2) Should this be reported to me on a tax form?
3) Can I claim it as a business expense?
