Top 8 Tax Write-Offs For Beauty Industry Professionals
Are you a self-employed hairstylist, esthetician, makeup artist, or any other specialist in the beauty industry? You should be aware that the IRS allows ordinary and necessary business expenses as tax deductions for independent contractors. These write-offs will reduce your taxable income. In this article, you will find out the top 8 tax write-offs for beauty industry professionals.
1. Kits & Tools
Whether you are a stylist or makeup artist you require various kits and tools to operate. These can include items such as Makeup kits, a variety of combs and brushes, hairdryers, hair curlers, manicure kits, multiple creams, hair colors, etc. Whatever amount you spend on procuring these supplies are deductible business expenses.
2. Protective Garments & Uniforms
As a beautician, if you are running your own salon you might want to look professional and create a brand identity. One way of achieving this is to have a uniform for your salon staff. This will help your client to spot members of your staff when it's a busy day at the salon. Spending on uniforms is one of the tax write-offs for beauty industry professionals.
Additionally, as a beautician, you are assigned to carry out specialized tasks such as hair dying, haircutting, skin treatment, etc. You need protective garments such as an apron, smock, etc, that are necessary to wear when carrying out these specialized tasks. These expenses are deductible.
3. Facilitators Service Fees
To maintain and enhance your salon business you need several facilitators. You require dry cleaning and salon cleaning services to keep up your working space and ensure proper hygiene. You can write off the amount you pay to these services providers. Additionally, any money you spend to purchase laundry and cleaning supplies are also deductible as a business expense.
Additionally, you might want to hire an ad agency to promote your business. They might suggest that to expand your reach and find leads you need a website, presence on social media platforms & a blog to educate clients about your services. All the costs associated with the services you seek are tax-deductible.
The amount you pay to the website developers, social media managers, and content writers are a few of the tax write off for self-employed professionals.
4. Professional Development Course & Licenses
The beauty industry is strictly regulated and to operate as a beautician you generally require a license. There are two types of fees you will be paying in this regard. One is to get your license while the other is to maintain it. The IRS allows you to write off both of these fees.
Once you have a license the next step for all the beauticians whether they are estheticians, makeup artists, the hairstylist is to keep up with the emerging trends. This helps you to stay competitive in business.
All the money you spent on continued professional development by attending training sessions, conferences, etc qualify as a tax deduction.
5. Salon’s Rent & Home Office
As an independent contractor if you have rented a salon’s space you can claim it as a tax deduction because the IRS considers it a business expense.
If you use a portion of your living space as a home office you have to apportion your expenses to calculate your home office deduction. The IRS allows you to use either a regular method or a simplified option.
The regular method is calculated based on the actual expenses whereas, in a simplified option, you multiply the home office square footage by the IRS prescribed rate to calculate your deduction.
6. Equipment & Supplies
When you purchase equipment for your salons such as a computer, mirror, vanity table, styling chair, and other essentials you can capitalize and depreciate them over the years.
However, the office supplies such as printers, stationeries, etc are common expenses and are allowed to be deducted to arrive at your taxable income.
7. Vehicle Expenses
For claiming vehicle expenses, the IRS gives you two choices. One is standard mileage where you will use the standard mileage rate, which is 58.5 cents for the year 2022, to compute your annual deduction.
Another option is to claim the actual expenses incurred during the year. In this option, you have to keep track of your spending on road tolls, gas, repair & maintenance, etc.
8. Self-Employment Tax
If you have ever been employed you must have noticed that you don't get the exact amount of your decided salary. The amount withheld from your paycheck is your portion of the self-employed tax, the other half is paid by the employer.
However, as an independent contractor, you are liable to compute, report, and pay your self-employment tax which is a combination of social and medicare tax. While computing your adjusted gross income the IRS allows you to deduct one-half of the SE tax.
This is not an exhaustive list of tax write offs for beauty industry professionals. To find out more tax deductions you are eligible to claim, you should seek the assistance of a tax professional.