The transition from hair stylist employee to owning your own booth can mean the difference in setting your own hours and saving money in taxes. Know the tax deductions that are available to you as a hair stylist with a booth rental. Owning your own business brings benefits when tax season comes around.
Booth rental requires you to possess a business license and a professional license to operate, both which are tax-deductible. Other salon expenses that are allowable deductions include those that are necessary to run the salon, such as the expenses you pay toward electricity, cable television, water, trash and towels. If you pay a portion of the receptionist’s salary, that portion is deductible, as is any insurance you pay for your own employee, such as an assistant or shampoo girl. Professional and liability insurance premiums also are a tax deduction.
Keeping current with the latest trends and newest products might require you to attend workshops, trade shows, conventions and classes. The cost for these is deductible, along with the mileage and any hotel and food costs. Magazine subscriptions, style and color books, both for your knowledge and to occupy your clients while processing are able to be deducted from your taxes. So are items such as DVD, online applications or video classes and material to enhance your training.
While many hair clients for your booth may come from word-of-mouth, marketing tools are a deductible expense. This includes items such as magnetic business cards, calendars, T-shirts, small notepads, pens, combs, address books, water bottles or other small items that contain your name and booth address. The cost to design and make a website, flyers, brochure, newspaper, phonebook or magazine ad for your booth are all tax-deductible expenses. Radio and television commercials and their costs can be deducted as part of your marketing or business expenses.
All equipment you use to style your clients’ hair is deductible, including the combs, brushes, blow dryer, diffusers, scissors and curling irons. So are the products, such as:
- hair dye
- perm solution
Other items to deduct include capes, towels, cotton bands and mirrors. Computer equipment to keep notes on the clients and store their addresses is also an allowable expense. So is your cellphone for the amount of use that pertains to the business.