This article was updated for Tax Year 2023, last edited on January 22nd, 2024.
Highlights
Hair stylists or salon owners may be considered independent contractors which means they can receive a 1099 rather than a W-2.
As an independent contractor, certain expenses can be deducted from your income such as booth rentals and supplies.
As a hair stylist or salon owner, you may be considered an independent contractor. Per the IRS, if you are an independent contractor, then you are self-employed. As an independent contractor, your income will be reported on a 1099 rather than a W-2.
Note: If you need to pay estimated taxes to the IRS, you may also need to pay estimated taxes at the state level. Refer here for more information.
What is the 1099? Are there different types?
There are two separate 1099s that you could receive:
Even if for some reason you do not receive a 1099, the IRS expects you to report all of your income. Keep in mind that tips are also considered taxable income.
What is my IRS business code as a stylist?
As a hair stylist or salon owner, your NAICS business code could be 812112, which is for Beauty Salons.
If this doesn’t fit your business services, or you’d like to see other options, you can find your NAICS code here.
Do I qualify for education tax credits?
If you're taking professional training to further your career as a stylist or barber, you may be able to qualify for the Lifetime Learning Credit. The credit can be up to $2,000.
What deductions are there for mobile phones?
A smartphone can be deducted, but only the expenses related to your business use. If you choose to use your personal phone, it is recommended that you get an itemized phone bill so you can accurately measure your personal versus business use.
Deductions related to a phone can include the cost of the phone, billing charges, and any related accessories such as chargers and cradles.
What are some additional deductions?
The IRS's most basic guideline is that to be deductible, the business expense must be ordinary and necessary.
Ordinary means that it’s common for other stylists or those in your industry to deduct these items.
Necessary means that it’s needed for the success of your business.
Common deductions for hairstylists are listed below, but are not limited to the following:
Supplies paid out-of-pocket for client services
Rent paid to a salon owner
Advertising costs
Website domain and hosting fees
Hair show fees
Common deductions for hair salon owners are listed below, but are not limited to the following:
Repairs on the salon space
Licenses and property taxes
Supplies for the salon as a whole
Advertising/recruitment expenses
Additional Resources:
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