What expenses can hair stylists deduct on taxes?
Your employment status determines what you can deduct. If you’re a W-2 employee at a salon, you generally cannot deduct work expenses on your federal taxes anymore. The 2017 tax law eliminated most unreimbursed employee expense deductions. If you’re self-employed as a booth renter, independent contractor, or salon owner, nearly every business expense is deductible.
Booth rent or studio rent is usually your biggest deduction. Whatever you pay monthly to rent your station or space comes directly off your taxable income. This alone can be thousands of dollars per year.
Products and supplies add up faster than most stylists realize. Shampoo, conditioner, styling products, hair color, developer, toner, foils, gloves, capes, and towels are all deductible. Track these purchases as they happen rather than trying to remember them at year end.
Equipment purchases count too. Scissors, clippers, blow dryers, flat irons, curling irons, styling chairs, and mirrors are all business expenses. Expensive items might need to be depreciated over several years or deducted immediately using Section 179. Your accountant can determine which approach works better for your situation.
Continuing education and licensing fees are fully deductible. Cosmetology license renewals, advanced training courses, industry conferences, and trade shows all qualify. These keep you current and competitive, and they reduce your tax bill.
Professional liability insurance protects your business and reduces your taxes. Same with any general business insurance you carry. Salon and personal care businesses often overlook insurance as a deduction because it feels like just another bill rather than a legitimate write-off.
Marketing expenses are deductible. Your website hosting, business cards, portfolio photography, social media advertising, and any local advertising you do all count. Building your client base is a business activity.
Vehicle mileage adds up if you drive to supply stores, attend training, or travel between locations. Keep a mileage log or use an app to track business trips. Your regular commute to the salon does not count, but everything else business-related does.
Phone and internet costs are partially deductible based on business use percentage. Scheduling software, payment processing fees, and professional organization memberships round out the common deductions.
The key is tracking everything throughout the year. A $15 trip to Sally Beauty every week becomes $780 in deductions by December. A bookkeeper near Bentonville can help you set up a system that captures these expenses so nothing slips through the cracks at tax time.
Keep receipts or use a dedicated business card so your statements show exactly what you spent. The deductions only work if you can prove them.
Northwest Arkansas's Dedicated Bookkeeping Partner
The Next Step:
A Quick Conversation
Tell us about your business and where you need help. We'll listen, ask a few questions, and give you a clear plan and honest price.
More Questions
What expenses should contractors track on each job?
Track materials, labor hours, subcontractor payments, equipment costs, permits, delivery charges, and waste disposal for every project. Missing the smaller expenses is what makes job costing inaccurate.
Read answerWhat records do I need to keep for an IRS audit?
Keep documentation that proves your income and expenses. This includes bank statements, receipts, invoices, payroll records, and anything that supports the numbers on your tax return. Most records should be kept for at least three to seven years.
Read answerHow do I handle lumper fees in my bookkeeping?
Track lumper fees as a separate direct expense, and handle reimbursements carefully so you don't overstate your costs. The key is recording both the fee you paid and any reimbursement from the settlement.
Read answerCan a bookkeeper work remotely for my business?
Yes, and for most small businesses, remote bookkeeping is now standard practice. Cloud-based accounting software and secure digital tools make location irrelevant. What matters is finding a bookkeeper with good systems, clear communication, and expertise in your industry.
Read answerHow do I calculate cost per mile for my trucking business?
Divide your total operating costs by total miles driven. The key is capturing all costs correctly, including fixed costs like insurance and payments, variable costs like fuel and maintenance, and driver pay.
Read answerHow do I set up sales tax in QuickBooks for Arkansas?
Register with the Arkansas Department of Finance and Administration first, then enable automated sales tax in QuickBooks Online. Enter your business address so QuickBooks calculates the correct state and local rates for your location.
Read answer
