- Your first step as a freelance hairstylist is to get organized. Purchase several file folders or large manila envelopes to file documents, expenses and proof of revenues. Dedicate a place in your desk or file cabinet to your hairstyling business and keep all important documents filed for easy access. Being organized will help tax time go more smoothly because you can lay your fingers on necessary paperwork at a moment's notice. The key is knowing exactly where it is - and that requires consistent organization.
- Save documentation of all revenue you earn and expenses of your business. To document revenue, save bank statements, copies of checks and cash receipts. Documentation of expenses may include chair rental, professional fees paid, educational expenses beyond your initial hairstyling certification, supplies, equipment, advertising, telephone charges, travel expenses, office supplies and contracted fees, such as legal or accounting fees. Some people like to record all expenses and revenues in a ledger book, but it is important to save receipts and documentation as well, in case you are asked for proof of particular expenses by the IRS.
- Prior to visiting a tax preparer or sitting down to fill out state and federal income tax documents, have all your information on one worksheet. Several tax worksheets especially developed for individuals in the hair dressing trade are available at no charge online, or simply ask your tax preparer for a worksheet. At the end of the fiscal year, sort through revenue and expense files and document all pertinent information on the worksheet.
- Stylists who are hired by a salon and receive a W-2 form at the end of the year should still keep a record of items such as receipts for continued education beyond the initial hairstyling certification, and any equipment, travel and supplies that are not provided by the employer, which you purchase with your own money. Hairstylists who own their own salon can claim building and utility expenses or rent in addition to the deductions mentioned above.
Get Organized
What to Save
Preparing Information
Other Considerations
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