There are all sorts of small business tax deductions out there. Some are universal, which means people can claim them in just about any line of work.
Others are more specific to your industry. In this case, we'll look at tax deductions for self-employed hair stylists.
Note: This article is only for educational purposes. Consult with a licensed tax professional for guidance on your specific hairdresser tax situation.
What are hairdresser tax deductions?
As you probably know, you need to pay self-employed hair dresser tax on your income. This is either done quarterly or annually, depending on exactly how your business is structured.
The taxes you pay are based on how much you earned, your marital status and the state where you do business, among other factors. Essentially, the more you make, the more taxes you pay.
Tax deductions are a way to reduce your taxable income, so you end up paying less in taxes. For example, if you earn $10,000 in a year and have $2,000 in deductible expenses, you would only need to pay taxes on $8,000, since the rest of it is considered deductible.
In other words, hair stylist tax deductions are a nice way to save some money on your taxes, which increases the amount of money you get to keep.
What can a hairdresser claim on tax write-offs?
Some people mistakenly think that every expense can be used as a tax claim. This is untrue. Most hair stylist tax write-offs need to be either true business expenses for day-to-day operations or directly related to helping your business grow.
Keep in mind, even when something is tax deductible, there may be limits on how much you can claim.
Common Hair Stylist Tax Write-Offs
Maximizing your deductions sounds interesting to you (and it should!), the next question is: What can a hairdresser claim on tax? Your options include:
1. Tools and supplies
When it comes to tax deductions for self-employed hair stylists, tools and supplies may be the easiest and most common option. Items can include things from scissors, shampoo, blow dryers, sinks, mirrors and styling chairs.
Just make sure to keep your receipts in case you get audited.
2. Car mileage and travel expenses
Car expenses like gas and milage can be tax write-offs if they are directly related to your travel for work, excluding commuting. If you take public transportation, your expenses are similarly deductible.
Keeping up with trends and improving your skills is always good for business. Plus, it’s good for your taxes, with relevant courses and trade magazines recognized as business expenses by the IRS.
If your state or local jurisdiction requires a hair stylist license, you can write-off that fee.
5. Hair stylist insurance
Your hair stylist insurance can protect you from the business risks you face when working with clients. It is also usually a deductible expense from your taxes.
6. Office expenses
In general, many things related to running your office can serve as tax write-offs, including your rent if you lease a commercial space or a chair at a salon, utility bills, basic business equipment and even some upgrades.
Final tips on self-employed hairdresser tax deductions
While there are plenty of tax deductions for self-employed hair stylists available out there, you’ll need to do your research and consult with a licensed tax professional to maximize your returns.
How Next Insurance helps hair stylists
We offer an easy online option to get affordable hair stylist insurance customized to fit your business.
Whether you're looking for basic general liability protection or an insurance package that includes workers' compensation, we can help you find the right coverage at the right prices.
It only takes a few minutes to answer a few basic questions and get a free quote online.