Self-employed hair stylist taxes: Write-offs for barbers, salon owners and the beauty industry

Self-employed hair stylist taxes: Write-offs for barbers, salon owners and the beauty industry

Kim Mercado
By Kim Mercado
Feb 29, 2024
10 min read

If you rent a booth in a salon and/or you’re issued a 1099 independent contractor form from a salon owner, chances are you’re eligible for self-employed hair stylist tax write-offs.

Even if you’re the salon owner or barber in your shop or someone else’s, there may be some beauty industry tax deductions for you to take advantage of.

If you’ve got questions about your upcoming taxes, including write-offs and deductions, jump ahead to learn:

What are self-employed hair stylist taxes?

When you’re a W2 employee, your employer automatically takes taxes out of your pay. But if you’re self-employed, you need to figure out what you owe the IRS on your own. Self-employed people typically pay quarterly or annually, depending on how their business is structured.

The state and federal taxes you pay are based on how much you earn, your marital status and the state where you do business.

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 money on your taxes because they reduce the taxable amount and lower your tax payments.

Typically, you would use the Schedule C form to report income and expenses from your business.

What are some tax write-offs for the beauty industry?

Some taxpayers mistakenly think every expense can be used as a tax claim. While that would be terrific, most barber or 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.

According to the IRS, a deductible business expense must be both “ordinary and necessary.” An ordinary expense is considered commonplace in your industry and that you need to run your business. Similarly, necessary expenses are helpful and appropriate costs for your business. 

Also, even when something is tax-deductible, there may be limits on how much you can claim.

For example, you can deduct only so much for automobile mileage, business-related entertainment, charitable donations and even your retirement plan.

Check the IRS’s website or ask your accountant about what is and isn’t deductible.

10-step hair stylist tax deduction checklist

So what can a hair stylist write off to reduce their income tax?

1. Tools and supplies 

When it comes to hair stylist tax deductions, tools and supplies may be the easiest and most common option. Items can include scissors, smocks, shampoo and conditioner, blow dryers, sinks, mirrors and styling chairs.

All your tools of the trade, from combs to clippers, are likely deductible. Just make sure to keep your receipts in case you get audited.

2. Car mileage and vehicle use

Car expenses like gas, parking and mileage can be beauty industry tax write-offs if they are directly related to travel for work, excluding commuting. If you take public transportation, your expenses are similarly deductible.

This is good news if you have a mobile hairdressing business or if you’re on a work-related errand like a supply run. You can deduct certain things like purchasing your vehicle, gas, insurance, licensing, tolls, parking and even your car’s depreciating value.

Beginning January 1, 2023, the standard mileage rate for business vehicles  is 65.5 cents per mile, up three cents from the midyear increase in the second half of 2022.

3. Continuing education and professional development

Keeping up with hair trends and improving your skills is always good for business. Plus, it’s good for your taxes. Taking seminars on the latest coloring techniques, attending conventions or workshops and virtual events/webinars counts as deductible expenses.

Similarly, the IRS recognizes relevant trade magazines and professional subscriptions as related expenses.

4. Self-employment tax

As a self-employed person, you’ll pay the full 15.3% self-employment tax on your income. This is because you’re paying both the employer and employee sides of Social Security and Medicare taxes. Yeah, not great.

The IRS knows this isn’t really fair, so they allow you to deduct half of your self-employment tax when figuring out your adjusted gross income.

5. Licensing

If your state or local jurisdiction requires a hair stylist license, you can write off that fee.

6. 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.

Typically, you can deduct premiums for many different kinds of business insurance, including general liability insurance, business vehicles, commercial property insurance and more.

7. Health insurance

100% of your health insurance is a deductible business expense for self-employed beauty professionals. Like business insurance, you can deduct medical, dental and vision premiums.

As long as your spouse or employer isn’t paying for your health insurance, you can deduct the cost of your premiums. However, if you’re getting a government subsidy, you can only write off what you pay each month (not your plan’s original price).

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8. Business operations expenses

Hair stylists have lots of places they can call an office. Maybe you’re a hair salon owner with a brick-and-mortar location, you rent a chair at a salon space or you work from home.

Business expenses related to running your office can serve as tax write-offs. They might include your rent if you lease a commercial space or a chair at a salon, utility bills, basic business equipment and even some upgrades.

You can also take advantage of a home office deduction if you run your business from home. 

While your workspace needs to meet certain criteria, any space you use exclusively and regularly for your business — regardless of renting or owning — can be deducted. You can calculate your deduction using either the simplified or regular method.

If you use the regular method, which involves keeping track of actual costs, business deductions can include your mortgage interest, insurance, utilities, repairs and depreciation. 

9. Marketing expenses

Any money you’re spending to market or advertise your business can be written off.

Hair stylist tax deductions include buying local ads, printing business cards and flyers, participating in local events and more. Digital advertising such as Facebook, Google or Yelp ads and website design and maintenance all count.

Don’t forget the promotional swag you might give away to customers, like pens, combs or travel shampoo — they also count.

10. Professional services

You may need extra help running your business as a business owner, whether it’s cleaners who come monthly to tidy your space, or a laundry or linen service to help with chores.

For example, you may need to consult a lawyer who helps you with a client threatening to sue you for damaging their hair. Or you may hire someone to manage your bookkeeping and record your costs and earnings properly.

Whatever the case, if the fees are necessary for operating your business, write them off.

There are plenty of tax deductions for self-employed hairstylists available out there. However, determining what qualifies and deducting business expenses on tax returns can sometimes be time-consuming. 

It’s wise to research and consult with a licensed tax professional or certified public accountant (CPA) to maximize your returns.

How NEXT helps support hair stylists, barbers and the beauty industry

NEXT has customized and affordable hair stylist insurance to fit your business.

For general liability insurance protection or a policy that includes commercial property coverage, we can help you find the right protection at the right price.

Answer a few basic questions and get a free quote online. Get insured and have a certificate of insurance in about 10 minutes, plus access to your policy 24/7 via web or mobile app.

Start a free quote with NEXT.

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Kim Mercado
About the author
Kim Mercado is a content editor at NEXT's blog, where she writes and edits posts for small business owners. She enjoys helping entrepreneurs solve their business challenges and learn about insurance. Kim has contributed to Salesforce, Samsara and Google.

You can find Kim trying new recipes and cheering the 49ers.

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