Working as a booth renter at a salon? Consider yourself a business owner. And make sure you’re writing off the taxes that could save you money.
While there are certain items that are normally included in your rental fee, such as hair products, towel use, and utilities, it’s important to keep detailed records of any outside charges and anything you pay the salon owner. That means you need to keep track of everything and everyone you spend money on for your business. When tax time rolls around, file a 1040 for yourself and a Schedule C for your business.
Keep these points in mind:
Service Fees: If you have to pay to use equipment, towels, a laundry service, or anything else the salon provides for you, outside of the rental fee, it should be written off separately. Put it on the line best representing what the service is on the Schedule C form. If you’re unsure of where to put it, you can mark it as “other expenses” on line 48.
Booth Rental: Likely your largest expense, your booth rent can be written off entirely. If utilities are charged separately from your rental fee, you can write those off as well. The amount of rent you paid goes on line 20b and utilities go on Schedule C form, line 25.
Equipment: When renting booth space at a salon, you’re likely paying for own your trimmers, cutting tools, brushes, and irons. Any newly -purchased equipment from the year should be written off on Schedule C form, line 22, as “supplies.” Under section 179, line 13, you can depreciate or write off any equipment that lasts longer than a year.
Hair Products: Some salons will charge you for the use of shampoo, conditioner, color, and other products. You’ll include these costs on line 22 as “supplies” as well. Any products you pay for out of your pocket and use on your clients should be written off on this line.
Extra Costs: If you tip or pay someone else to do a service such as washing hair or processing color for you, those can be written of on Schedule C form, line 11 as “contract labor.” You must report a payment to anyone of over $600 a year to the IRS and provide them with a form 1099-MISC.
Check the instructions on Schedule C form for additional information on deducting additional costs for items such as business cards, classes, cell phones, and license fees. And, as always contact a professional, to ensure that you’re handling your taxes correctly.
-Easy for you, Easy to love-