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Top 2020 Tax Deductions for Hairdressers

by Alexander Brebner|2 March, 2021|Blog / Community / 

We have created a list of tax deductions so that all of our Hairstory stockists are set for when tax season rolls around. As a business owner, self-employed hair stylists enjoy more “creativity” when tax season arrives. 

While a full time employee is limited in the deductions they can claim to reduce their tax bill, the independent or freelance hairdresser can claim many more expenses that are a part of doing business as tax deductions. Here is the most common hair salon expenses list that you should be keeping track of to toe your bottom line.

HAIR STYLIST TAX DEDUCTION CHECKLIST
1. Mileage

If you’re regularly traveling between the salon and other locations to do business, whether running errands or attending classes, keep a mileage log. Use of your personal vehicle and the fuel it consumes are partially deductible – except while commuting between home and your primary workplace. You may choose to take the standard mileage deduction, but this means that you cannot deduct expenses like gas, oil changes, car repairs, and car insurance. It may be worth the extra record-keeping so you can make the best choice. Keep track of parking fees and tolls too; they’re also a deductible expense.

2. Home Workspace

This is one of the most abused deduction allowances, and the IRS is reportedly a sticker on this one, so writing off a part of your home for business use is only advisable for those with a dedicated space used only and often for business.

There are two ways to calculate this home office deduction:

  • The simpler option: Multiply the square footage of your home workspace (up to 300 square feet) by $5.
  • The expense option: List everything you spend on your home office. Supplies and repairs can be deducted in full. Divide the cost of your mortgage, insurance, and utilities by the percentage of your home that you use – exclusively – for your small business.
3. Professional Development

You may deduct tuition for any technical, creative, or business classes, seminars, or conventions you attend. The cost of subscribing to industry publications is also deductible.

4. Supplies and Tools

Cutting tools, combs, brushes, liquid products, blow dryers, aprons, capes, furnishings – anything you bought last tax year that is essential to conduct your business may be deducted. You may want to consider deducting high-ticket items such as chairs and mirrors using the depreciation method, which allows the tax deduction to be spread out over years.

5. Communication Charges

If you have a phone that you use exclusively for business, you can deduct all of its related expenses including the cost of purchase and your monthly fees. If your phone is also used for personal reasons, deduct only the portion of the time you used it for work-related calls/texts.

6. Business Stationery

The costs involved in designing and printing your business or appointment cards, as well as letterhead, envelopes, brochures, and notepads are deductible marketing expenses, including any photocopying or office-center expenses.

7. Advertising & Promotion

Online or print ads, signs, videos, and the cost of creating, hosting, or maintaining your website are all deductible. The same goes for any promotional freebies you produce such as combs, pens, or brushes.

8. Licenses

Fees that you pay to obtain or renew your required professional licenses are fully tax-deductible.

9. Insurance

If you maintain an insurance policy as protection from business claims, you can deduct your premiums.

As long your health insurance is not covered by a spouse’s or employer’s policy, your monthly premiums are fully deductible.

Note: Claim your health insurance premiums as a personal deduction on Form 1040, and not as a business expense. If you are the beneficiary of a life insurance policy, the premiums are not deductible even if it was bought to secure a business loan.

Download the full Hairdresser's Tax Deduction Worksheet here.

So carve out some time, get out those receipts, and get tapping at that calculator. Take on your hairdresser taxes 2020 by storm. Think back to years past: didn’t putting off this essential task feel worse than actually sitting down to do it? Get started and greet springtime with one less thing to worry about.


WHICH EXPENSES ARE NOT DEDUCTIBLE?

Some common salon owner expenses are unfortunately non-deductible, including:

  • Your haircuts, color, and skincare are not deductible, even though you may deem them essential for a professional appearance. Likewise, unless you are required to wear and maintain a uniform, the cost of clothing that can also be worn outside of work and its dry cleaning are not deductible.
  • Legal violations such as parking or traffic citations and court fees
  • Mileage traveled by commuting between home and a permanent workspace

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