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Social media is full of gorgeous men and women whose looks we want to emulate. So, we turn to you, our local hairstylist, barber or cosmetologist to magically transform us. And you go to work – washing, plucking, trimming and polishing to bring out our natural best. We know we can count on you. You are both beautifier and confidante – only you know our real hair color!
This National Beautician’s Day we thank you for glowing skin, fabulous hair and fierce nails as we offer tips on how to take care of your taxes.
National Beautician’s Day: How to File Taxes as a Salon Owner
Salon and barbershop owners handle a lot – staffing, payroll, customer service – all while keeping clients happy. You work hard and can benefit at tax time. Self-employment allows you to reduce your taxes by claiming a wide range of business expenses on Schedule C, Profit and Loss for Business. The rent you pay for your storefront or booth space; supplies like hair and nail utensils; smocks, blow driers, clippers, and more may be deductible. You may also claim the depreciation on assets such as styling chairs, wash stations, and hair dryers. Employee wages and benefits and your share of Medicare, Social Security taxes and unemployment insurance are also deductible. And that’s not all – click here for more information
Self-Employment and Taxes
Styles change all the time – what’s hot this season is out the next. Luckily, you can deduct the costs, including travel, of education that keeps you up to date on the latest industry techniques. However, education that qualifies you for a new trade or business, or that helps you meet the minimum requirements to become licensed are not deductible as a business expense.
Taxes and Tip Income
As a hairstylist, nail technician, barber or makeup artist, you may receive tips from satisfied customers. If you work for someone else, you must report all tips over $20 to your employer each month. Those tips will be included on your W-2 in Box 1. Monthly tips less than $20 do not need to be reported to your employer. However, they must be reported as income on your taxes along with the value of non-cash gratuities like tickets and passes. If you are self-employed, you must include all tips as part of your gross income (before expenses).
We all love to look good, but who can achieve the filtered and Photoshopped beauty we see online. With your help, we don’t need to. Thanks for helping us all shine.