There is a common saying that you have to spend money to make money, and while that is true, some of that money can be earned back if the items purchased are tax-deductible. There are certain expenses deemed ordinary and necessary for one to practice business by the IRS. Most deductible expenses fall under the category of things needed to conduct business. This article will list applicable write-offs for beauticians, barbers, nail technicians, tattoo artists, and other beauty professionals. 

Rent and Utilities

Whether you rent a shop, a booth, or work out of your home, expenses for space to run your business are tax-deductible. The same goes for utilities. If you work from home the rules are slightly different, and audits are more likely, but you can still write off a portion is your bills calculated by the percentage of space that is used for business. 

Furniture and Equipment 

This includes computers, tablets, and software used for booking, salon equipment like chairs, carts, and other tools, credit card readers, waiting room furniture, products such as shampoos, soaps, tattoo guns, and ink are all applicable. 

Education and Training 

Training, classes, books, and other learning resources are fair game deductions. While you are not allowed to deduct any education used to start your career, any education or resources used to expand your skillset or keep you in compliance are applicable. 

Insurance 

No matter the business, it is always smart to have insurance. It is not just a good idea legally; it is tax-deductible too! This tax deduction applies to both liability insurance and your healthcare. Protect yourself and your wealth. 

Travel Expenses

While your daily commute cannot be deducted, any extra driving you do on behalf of work can. Travel to related functions like classes and seminars are applicable, as well as hotels and meal expenses related to travel. 

Employee Expenses

If you’re a seasoned shop owner and have employees such as a receptionist, or janitor, those wages are considered a deductible expense. Employee expenses include wages, health insurance, and workman’s compensation.

Miscellaneous

Other expenses that can be deducted from taxes are advertising costs, charitable donations, bank fees, cell phone bills, tolls, parking, and printing. If you are unsure if an item is tax-deductible, reach out to a trusted CPA before filing. 

Tax forms can be complicated and are full of tax jargon that you may be unfamiliar with. For most people who are self-employed, the state requires you to file a 1040 Form. Start with hiring a CPA to make sure you aren’t overlooking any details in your monthly bookkeeping. You risk being audited, or worse fined. Contact MATS today to discuss your accounting needs.