Many tax deductions for barbers and beauty professionals are missed each year!
You’re in the world of perfecting your client’s physical appearance whether it is through hair, fashion, or makeup.
The last thing you want to worry about is making sure your taxes are prepared correctly and with optimal care. I am definitely aware of this and I always want to make your life easier when it comes to helping you prepare your taxes.
The first thing you will want to do is to make sure all your documents are in line. In this article, I will show you how to get the most business deductions and lower your tax bill.
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Getting Ready for Tax Season
When preparing for the tax season, please keep in mind that you can write off expenses that are common for your profession and ones that are necessary to help you run a business.
As a self-employed hair stylist, you can reduce your taxable income through business deductions for ordinary and necessary expenses.
However, if you are an employee receiving a W-2, unreimbursed employee expenses are no longer deductible after the Tax Cuts and Jobs Act of 2017.
I’ve put together a quick and FREE generalized tax deductions checklist for stylists, barbers, manicurists, and other beauty professionals for you to download below.
Update: Since the beginning in 2018, employees are no longer able to deduct their unreimbursed employee expenses on their taxes.
What is a Tax Deduction?
A tax deduction is money that you subtract from your earned income, which will lower the amount of money you are taxed and the amount of tax you may possibly owe.
6 Common Tax Deductions for Barbers, Stylists, or Beauticians
1 – Clothing/Uniforms
Your work outfit has to be specific to the work you do as a stylist, beautician, or barber. For example, an apron, a smock, or shoes are items you can write off when doing your taxes.
If you’re thinking about something more in the fashion sense, you’d have to be able to prove its necessity for accomplishing your job.
2 – Supplies
Any amount you spend on materials you purchase as a stylist or barber for your business or job.
These items include:
- Blow dryers
- Clippers
- Combs and brushes
- Makeup kits
- Scissors
- Shampoo and conditioner
- Towels, etc.
Power Tip: Keep a good record of each item you buy, just in case you need it in the future for the IRS.
3 – Licenses and Education
Being licensed is a common requirement for professionals in the beauty industry. The good thing for you is that you can write off the fee associated with getting your license and maintaining your license.
You can also write off fees for your local business license.
When it comes to your education, which is highly important to stay competitive, these fees can also be written off. Along with any travel associated with obtaining your continued education, such as hair shows or conferences.
Once licensed, you can deduct the cost of any continuing education classes needed to improve your skills.
Subscriptions to magazines related to your job also count as deductions since you need them to stay up-to-date with the latest trends and fashions.
Tuition for school has to be done separately from the 1098-T form that you will receive from your school.
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4 – Start-up and Operating Expenses
Start-up expenses are everything you spend to get the business running such as equipment, rent, marketing, etc.
The IRS treats these differently, in the fact that you can write off up to $5,000 of your taxes, with the rest being depreciated over 15 years. Your CPA (Certified Public Accountant or trusted Tax Advisor can go into more detail on depreciation with you).
Depreciation means you can claim some of the equipment costs for a smaller tax break over a few years (read more about the process called depreciation here).
Operating costs are the expenses needed to maintain your business such as uniforms, insurance, booth space, etc.
5 – Home Office Deduction
The home office deduction can provide substantial tax savings but requires meeting strict IRS requirements.
The space must be used regularly and exclusively for business.
Homeowners calculate the deduction based on the percentage of homes used for business, while renters deduct a portion of rent.
Ensure your home office meets the rules to claim this valuable deduction.
6 – Any Services
Services such as dry cleaning, advertising, or having the salon clean are examples of services needed to maintain the integrity of your business.
Other Tax Deductions for Barbers, Beauticians, and Stylists
Work Tools
- Office Phone
- Answering Service
- Cell Phone
- Internet Service
Supplies
- Laundry Supplies
- Cleaning Expense
- Office Supplies
- Postage
- Products
Professional
- Dues
- Licenses
- Memberships
- Legal & Professional
- Insurance
- Seminars
- Publications
Equipment
- Computer
- Software
- Desk
- Chair
- Filing Cabinet
Vehicle and Travel
- Vehicle Description
- Car Rental
- Parking & Tolls
- Total Miles Driven
- Business Miles Driven
- Airfare
- Taxi, Bus
- Lodging
Miscellaneous
- Meals
- Entertainment
- Advertising
- Rent
- Client Gifts
- Work Clothing
- Donations/Charity
- Bank Fees
- Hosting your website
Recordkeeping Tips
Meticulous recordkeeping is crucial for maximizing hair stylist tax deductions. Save receipts for all purchases and track mileage logs for business travel.
Take pictures of receipts or use apps to scan and organize them. Calculate the percentage of cell phone use for business vs. personal.
Maintain an expense tracking spreadsheet. Proper documentation is key in case of an audit. Adopting good recordkeeping habits ensures you capture all eligible write-offs.
Forms Needed to Claim Tax Deductions as a Beautician or Barber
Barbers, stylists, and beauticians are generally independent contractors, meaning self-employed. Whatever way you are paid, you’ll want to keep track of every amount of money you receive.
IRS Form 1040 is needed to write off your expenses as a barber, beautician, or stylist. The expenses of your business will be placed inside the deductions area of Form 1040.
Power Tip: Use the standard deduction only if your total expenses do not exceed the dollar amount set by the IRS.
An itemized deduction is only needed if your expenses are more than the set standard deduction dollar amount. You can use the IRS Form 1040 Schedule C if you need to itemize your deductions.
Remember: Keep track of your expenses and income on a spreadsheet or bookkeeping program such as FreshBooks.
How can you tell if you’re a self-employed/independent contractor or an employee?
It depends on the tax form the hair salon gives you: W-2 = employee and 1099-MISC = self-employed/independent contractor.
Remember: Keep track of your expenses and income on a spreadsheet or bookkeeping program such as FreshBooks.
How to Keep Your Files Tax Information Organized
- Hold on to your W-2 forms and 1099 forms
- Save receipts of items you bought for your business if you’re a contractor
- Keep track of expenses in an Excel spreadsheet or through a bookkeeping software such as FreshBooks
- Have a tax preparation checklist completed
- Keep a detailed barber, beautician, or stylist tax deduction checklist handy
Final Thoughts on Tax Deductions for Barbers, Stylists and Beauticians
Hope this tax deduction checklist helps you navigate through the sometimes muddy waters of the income tax season.
Remember to keep track of your receipts and if there’s a question about any possible deduction be sure to contact me. I definitely do not want you to miss out on any deductions.
Overlooked deductions mean you put less money into your own pocket and you may end up paying too much in taxes.
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If you enjoyed this article, then you’ll love these:
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Get started on your taxes early here!
Until the next money adventure, take care!
Handy
Disclaimer Statement: All data and information provided on this site is for informational purposes only. The Handy Tax Guy makes no absolute representation of the correctness, mistakes, omissions, delays, appropriateness, or legitimacy of any information on this site. **Note: Each client circumstance will vary on a case-by-case basis**
(Original Article Date: December 3, 2018/Updated September 11, 2023)
