Top 11 Freelance Makeup Artist Tax Deductions
Are you a beautician preparing your self-employed makeup artist tax return? While doing so remember the IRS allows you to write off ordinary and necessary business expenses to lower your taxable income. In this article, you will learn about the Top 11 freelance makeup artist tax deductions to reduce your taxable income.
1. Startup Cost And Other Business Expenses
Imagine you have set up your makeup artist studio and spent $15,000. Out of which the IRS allows you to deduct $5,000 as a one-off deduction. You can capitalize the remaining amount of $10,000 and deduct it over years.
Additionally, while setting up your makeup studio you might have purchased a dressing table, mirror, computer, and other stuff that are necessary for running your business. The IRS considers all these costs as capital expenses which you can depreciate over years.
2. Fees, Dues, And Subscriptions
While building your makeup collections you may avail the discount card that many brands offer. To use it you might have to pay annual fees for some of these programs. These fees qualify for an allowable deduction under professional dues and subscriptions.
You can also deduct payment processing and legal fees incurred during the tax year.
3. Promotional Costs
Once your business is up and running you need to get the word out and for that you will obviously spend some money on printing your business cards, creating a website, hiring a copywriter and social media manager, designing brochures, free giveaways, etc. All these costs will be freelance makeup artist tax deductions for you.
4. Cost Of Working Space And Studio
Whether you rent an office or decide to dedicate a working space at your home certain directly attributable costs for maintaining it are deductible in full or in portions. While setting up a home office you need to keep in mind that the extent of the usage will determine how much expense you can claim as a deduction.
To calculate home office deduction you can either opt for the regular method or the simplified option. In the regular method, you will use actual expenses as a basis for computing deduction whereas in the simplified option you will multiply your home office square footage by the rate prescribed by the IRS to figure out the deduction.
If you rent office space the rent is deductible. And if you have a home office, you’ll be able to deduct a portion of costs like mortgage interest, utilities, and home insurance. You can also apportion your monthly phone and internet costs and write it off.
If you have set up a makeup studio to specifically work on your clients then insurance, rent, and utilities are some of the expenses that are eligible for makeup artist tax deductions.
5. Makeup Kit And Office Supplies
Being a makeup artist the makeup kit is an essential tool to perform your services therefore you can write off makeup costs incurred during the tax year. Your makeup tax deductions can include brushes, wipes, disposable makeup applicator, lipsticks, eye shadows, etc. Apart from this, you can also deduct office supplies such as pens, printers, etc.
6. Software Expenses
Whether you use software for managing client relationships, emails, or for keeping your accounting records you can deduct costs associated with it.
7. Automobile Expenses And Transportation Costs
For claiming automobile expenses you can use the standard mileage rate to figure out the deduction. Simply multiply your total annual business-related mileage by the IRS prescribed mileage rate which is 58.5 cents for 2022.
Alternatively, you can keep track of your actual expenses and claim deductions on the basis of them. Other expenses such as gas, repairs and maintenance, parking fees, car insurance, and road tolls are allowable deductions. It is noteworthy that if you opt for a standard mileage rate then you cannot deduct these individual expenses.
8. Continuing Professional Development
With the fast-paced world, the rapid changes in makeup techniques will require you to constantly pay attention to your professional development. To learn new techniques you may decide to attend a training session conducted by a leading makeup artist.
Additionally, to keep up with changing trends you might wish to read magazines, attend online makeup seminars. You can write off the costs associated with your continuing professional development.
9. Health Insurance
Unless you are covered through your spouse’s employer you can write off your long-term health insurance premiums and dental expenses. Apart from this if you pay health insurance premiums for your dependents you can deduct them too.
10. Hiring Professionals And Other Contractors
Once your business expands you might need the services of experts such as an accountant to keep track of your transactions, a tax experts’ advice on what freelance makeup artist tax deductions you qualify for. You may want to hire a virtual assistant to schedule your client’s appointments and respond to their queries. The payment you make to these professionals and contractors for their services is an allowable deduction.
11. One Half Of Self Employment Tax
While figuring your adjusted gross income you can deduct one-half of the SE tax. As a self employed makeup artist you are responsible to compute and report your self-employment income tax SE tax. The self employment tax consists of social security and medicare tax. You will compute your self-employment and income taxes by using relevant tax forms.
To sum up
You might be eligible to claim more freelance makeup artist tax deductions. Talk to a professional tax specialist while filing your income tax return to make sure you don't miss out on any deductions that would lower your taxable income which ultimately will reduce your tax liability.