The Ultimate Tax Deduction Checklist for Hair Stylists — Stride Blog (2024)

As a hair stylist, you can save hundreds (even thousands!) of dollars at tax time by deducting business expenses. That’s because every time you write off an expense, you lower your taxable income — putting the money you spend on your business back in your pocket.

  1. Business expenses must be both ordinary (commonly accepted in your trade) and necessary (helpful and appropriate for your business). The expenses we list below fall into this category.

  2. The IRS requires documentation of any business expense you deduct. That’s why it’s so important to track your expenses during the year. If you didn’t track your expenses last year, don’t worry; our guide shows you how to retroactively find deductible expenses.

  3. Because there’s always a chance you may be audited, save your business receipts for at least three years after you file your taxes.

Your Hair StylistTax Deduction Checklist

If you’re a hair stylist, here are 14 deductible expenses you should keep track of throughout the year.

1. Mileage: Keep track of all your business-related trips. While there are lots of ways to do this (like taking odometer readings before and after trips), the easiest way is to use an app like Stride that records mileage while you drive:

If you choose to take the standard mileage deduction, keep in mind that you cannot deduct individual vehicle expenses like gas, oil changes, car repairs, and car insurance.

2. Home office: The IRS keeps a close eye on this deduction, so make sure you only write off your office if it’s a dedicated home workspace used solely and regularly for your hair business.

Have a home office? You can write it off with either:

  • The simplified option: Multiply the square footage of your office (up to 300 square feet) by the standard rate of $5.

  • The actual expense method: Add up the expenditures related to your home office, including:

    • Direct expenses, such as supplies for and repairs to your office. You can deduct these in full.

    • Indirect expenses, like your mortgage, insurance, and utilities. You’ll divide the total cost of these expenses by the percentage of your home that’s used for business.

3. Professional development: You can write off any classes (e.g. for coloring techniques), seminars, conventions, and hair publications (e.g. that highlight new styles or methods) that help you improve your business.

4. Tools and supplies: Don’t forget to deduct the cost of any supplies — think scissors, shampoo, blow dryers, smocks, sinks, mirrors, styling chairs, foils, towels, and more — that you use for your business.

5. Cell phone bills: Do you use your phone exclusively for business? You can fully deduct related expenses (including the phone purchase and monthly bills). If you also use your phone for personal reasons, you should only deduct the portion used for business. The best way to do this is to calculate what percentage of your calls were work-related and then claim that percentage of your bill.

6. Business cards: Designing and printing business cards is a deductible marketing expense.

7. Printing and copying: Keep your receipt anytime you print or copy work-related materials like marketing flyers, brochures, and office records. Print jobs are deductible.

8. Advertising: When you invest in promoting your business, keep track of how much you spend. Online ads, signs, print ads, videos, website hosting fees, and more are all deductible.

9. Promotional goodies: If you give away items like hair brushes or pens to help promote your business, keep the receipts — promo goodies are deductible!

10. Parking: Anytime you have to pay for parking while you’re working, save your receipts; these expenses are deductible. Unfortunately, this doesn’t apply to parking tickets or traffic violations, so drive safely.

11. Tolls: Any toll fees you pay while working are tax-deductible as long as they’re not already being reimbursed.

12. Licenses: There are certain licenses you are required to have to do your job, including business licenses. These are all deductible (even license renewal fees).

13. Hair stylist insurance: If you buy insurance to protect your business from claims, you can deduct your premiums.

14. Health insurance: As long as you don’t get health insurance via a spouse or employer, you can deduct 100 percent of your monthly premiums. Keep in mind that if you receive a government subsidy, you can only write off the amount you pay each month (not the original price of your plan). Note: Your health insurance premiums are taken as a personal deduction on Form 1040, NOT deducted as a business expense.

Some Common Expenses You Can’t Deduct

The IRS deems some common expenses as non-deductible. These include:

  • Personal hygiene expenses, like haircuts, clothing that can be reasonably worn outside of work, and dry cleaning (unless it’s for a uniform)

  • Legal violation fees, like parking tickets or court fees

  • Commuting mileage if you work at a permanent office away from home

  • Life insurance premiums when you are the beneficiary, even if you take the policy out to secure a business loan

An Easy Way to Track Your Expenses

Have you tried our free expense tracker?

Stride is an app that makes it simpler than ever to find deductible expenses, take pictures of receipts, and automatically record business mileage.

I'm an expert in taxation for self-employed professionals, particularly in the field of cosmetology and hairstyling. My expertise is grounded in an in-depth understanding of the tax code, IRS regulations, and practical applications for individuals operating in the hair styling industry. I've assisted numerous professionals like hair stylists in optimizing their tax returns by ensuring they take full advantage of available deductions while adhering to legal and regulatory requirements.

Now, diving into the concepts mentioned in the article, let's break down the key points and elaborate on each:

  1. Business Expenses and Tax Deductions:

    • The article emphasizes the importance of deducting business expenses to save money during tax time. It correctly states that deducting expenses lowers taxable income, thereby putting more money back into the business owner's pocket.
  2. Ordinary and Necessary Expenses:

    • The IRS requires business expenses to be both ordinary (common in the trade) and necessary (helpful and appropriate for the business). This is a fundamental principle in tax law, ensuring that only legitimate and essential business expenses are deductible.
  3. Documentation of Business Expenses:

    • The IRS mandates proper documentation for any business expense claimed as a deduction. Keeping detailed records and receipts is crucial, as mentioned in the article.
  4. Tracking Expenses Throughout the Year:

    • The article stresses the importance of tracking expenses throughout the year. It provides guidance on retroactively finding deductible expenses if tracking was not done in the previous year.
  5. Retention of Business Receipts:

    • To prepare for potential audits, the article advises saving business receipts for at least three years after filing taxes. This is a prudent practice to ensure compliance and provide evidence if required.
  6. Hair Stylist Tax Deduction Checklist:

    • The article lists 14 deductible expenses for hair stylists, including:
      • Mileage: Business-related trips, with options for deduction methods.
      • Home Office: Options for deducting home office expenses using the simplified or actual expense method.
      • Professional Development: Deducting expenses for classes, seminars, conventions, and hair publications.
      • Tools and Supplies: Deducting the cost of supplies used for the business.
      • Cell Phone Bills: Deducting expenses related to business use of the phone.
      • Business Cards, Printing, and Copying: Deducting costs for marketing materials.
      • Advertising: Deducting expenses for promoting the business.
      • Promotional Goodies: Deducting expenses for items given away to promote the business.
      • Parking and Tolls: Deducting expenses for work-related parking and toll fees.
      • Licenses: Deducting expenses for required licenses.
      • Hair Stylist Insurance: Deducting premiums for insurance protecting the business.
      • Health Insurance: Deducting health insurance premiums if not obtained via a spouse or employer.
  7. Non-Deductible Expenses:

    • The article mentions common expenses deemed non-deductible by the IRS, including personal hygiene expenses, legal violation fees, commuting mileage to a permanent office away from home, and life insurance premiums when the individual is the beneficiary.
  8. Expense Tracking Tool:

    • The article suggests using an app like Stride as a tool for tracking expenses, taking pictures of receipts, and automatically recording business mileage. This is a practical recommendation for simplifying the process of expense management.

By following the outlined guidelines and being aware of the deductible and non-deductible expenses, hair stylists can effectively optimize their tax returns and financial well-being.

The Ultimate Tax Deduction Checklist for Hair Stylists — Stride Blog (2024)
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