If you work in the beauty industry, there are a number of tax deductions that you can claim. Whether you’re self-employed or run a salon, it’s important to understand what is and isn’t tax deductible. In this blog post, we will discuss the most common tax write offs in the beauty industry. Here's what you need to know.
8 Tax Write Offs For The Beauty Industry
The first deduction you can make is for the equipment that you use in your business. This includes items such as scissors, combs, brushes, hair dryers, and irons. If you purchased these items new, you can deduct the cost of the item from your taxes. If you leased or rented the equipment, you can deduct the cost of the lease or rental.
Bonus Tip: Any clothing you buy exclusively for use in your business is tax deductible. This includes uniforms, aprons, and other clothing items that are required for your job.
Another tax deduction you can claim is for the supplies you use in your business. This includes items such as shampoo, conditioner, hair color, hair styling products, and nail polish. If you purchased these items new, you can deduct the cost of the item from your taxes. If you leased or rented the equipment, you can deduct the cost of the lease or rental.
3) Advertising and Marketing
If you spend money on advertising and marketing for your business, you can deduct these expenses from your taxes. This includes the cost of business cards, fliers, website design, and online advertising. Any publicity you use to bring in an income is tax deductible.
4) Educational Expenses
If you attend workshops or courses with the goal of helping you improve your work in your salon then this is another area that is tax deductible. Not only does the cost of the actual course qualify but any associated expenses like travel are also included too!
5) Business Licenses and Permits
If you have to obtain a business license or permit to operate your business, you can deduct the cost of the license or permit from your taxes. This would include things like a cosmetology license, a salon business license, or a special permit to operate in your city or town.
Unless you are operating entirely from your own home (which in itself can be written off for tax purposes), chances are you are going to do some amount of traveling. Whether its in your own vehicle or public transport, your commute can be tax deductible. But it doesn't stop there, if you make any house calls or travel to other locations for work then those expenses can be written off as well. Just remember to keep track of your mileage or public transport receipts!
7) Rent or Mortgage
This could apply because you run your own salon from a business location or even when you run your salon from your home. If you have a dedicated space for your salon then a portion of your rent or mortgage can be deducted from your taxes. The same applies if you use part of your home as an office space and the other part is used as living quarters, you can still claim a tax deduction.
This tax deduction covers costs such as gas, electricity, water, and trash removal. If you have a home office or dedicated salon space, you can deduct a portion of your utilities based on the percentage of the space that is used for business.
9) Staffing Costs
As you grow your salon business, there's a good chance you'll need to expand from being a one person show and manage a staff. And while this will likely be one of your biggest costs, we have some good news here too. Any money you invest in your staff can qualify for a deduction. So, whether it's tea and biscuits in the kitchen, uniforms or even entertaining like a staff Christmas party, all of this is potentially tax deductible.
Hopefully now you have a better idea of the different methods you have for saving money on your taxes as a salon owner. Just remember to keep good records of all your expenses (a reliable system like Glambook can help you do this). and make sure you are only claiming for what is actually tax deductible. And if you're ever unsure, don't hesitate to ask a barber and beauty tax specialist.
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