Tax Write-Offs for Hair Dressers
A hairdresser has many business expenses that are tax deductible, such as scissors, brushes and other hairstyling equipment. Keeping a good record of all the expenses can impact their taxable income. A hairdresser can reduce their tax liability and keep more of their money by following these money saving tax tips.
Equipment expense
Every hairdresser is required to have their own shears, combs, brushes and other hair cutting equipment. A hairdresser is responsible for the purchase and upkeep of their tools of the trade. A self-employed hair dresser can depreciate the tools over their useful life or take a one-time full deduction for the purchased equipment. If the hairdresser is an employee the equipment deduction will appear as a miscellaneous deduction on schedule A of their tax forms. A hairdresser that is an employee can take this deduction for any expense that exceeds two-percent of their gross income.
Business travel expense
Business mileage is tax deductible for both the employee and the self employed hair dresser. Keep a log book of your business mileage. If you drive to different salons to see clients, that mileage is tax deducible. Check the IRS mileage rates as they can change each year. If your car is only used for work then maintenance and repairs to the vehicle are also tax deductible.
Entertainment expense
Tax deductible expenses also include dinners and entertainment expense. You can deduct up to 50 percent of your business entertainment and meal expenses. Keep all the receipts to claim the entertainment expense deduction. There is one exception in that the employer of the employee can deduct 100 percent of the entertainment expense. The self-employed hairdresser can deduct 100 percent of the entertainment expense if the expense is for a client.
Tax deductible gifts
Gifts the hairdresser provides for their clients are tax deductible. The maximum deduction is twenty-five dollars per gift. So keep track of all the gift giving at the holidays as it can pay off with a nice tax break.
Insurance
The self-employed and the employee hairdresser can deduct their health care insurance premiums. The self-employed hairdresser can deduct 100 percent of their health care premiums. The employee hair dresser can also deduct their health insurance premiums, and is limited to deducting premiums that are over 7.5 percent of their gross income.
Clothing and dry cleaning expense
If your salon requires you to wear certain attire, the clothing is tax deductible. If the clothing is used specifically for work the dry cleaning expense is also tax deductible. For the self employed hair dresser this would be a business expense. For the employee hair dresser this would appear as a miscellaneous deduction on schedule A.