Ok so I know as a creative thinker, us hair stylists think of beauty before brains. Meaning we are often more concerned with slaying our clients vs taking care of our beauty business essentials.
As its tax season, I hope you are prepared to file your taxes. Its ok if you aren't because Ive dedicated this blog to help you get prepared and filed for 2018!
Whats Your Employment Status?
First off you need to be clear on your employment status. Of course if you are the salon owner then you would be considered self employed. However if you work at a salon as a both renter or commissioned stylists that is a different matter.
As a booth renter, yes you are still considered self employed or better yet an independent contractor and would fill a 1099-MISC form. Id suggest paying your taxes quarterly. Reason being, if you pay quarterly there will be no surprises once it comes time to file your taxes. Also this allows you to avoid any penalties and gives you a better understanding of your financial situation.
So if you'll be filing a 1099-MISC form, as a self employed beauty professional, its highly suggested that you pay your taxes quarterly.
As a commissioned stylist, you'd be considered an employee of the salon. In this instance the salon owner would be required to provide you with a W2 form. Overall this mean that taxes have already been held from your pay checks. And you could potentially receive a refund check.
Regardless of your employment status, you can claim tax deductions. Unfortunatedly for an employee there are limitations of the tax deductions that you can claims as the salon owner will be claiming many.
What exactly can you deduct?
5. Professional Dues and Expenses
7.Liability/ Business Insurance
8. Subscriptions/ Magazines/ Books
Enjoy this FREE Tax Deduction work sheet!
Throughout the year, its important to get and stay organized financially. Keep records of your spendings. I have a separate business checking account and credit card. This way I do not have to keep a ton of receipts (its doesn't hurt the have them though.)
Keep monthly financial records, by doing so you will be able to keep track of your business and file taxes easily once the year if over.
As always, in 2018 I will be assisting as many hair stylist as possible to accomplish their beauty goals! Enjoy this FREE Tax Deduction Worksheet, it will help you determine what you purchased last year that can be tax deductible and hopefully help you save on your taxes.