Tax Help for Beauticians and Estheticians

Whether you rent a room in a salon, work from a suite of your own, or travel to clients, you are most likely self-employed for tax purposes — though the room or the travel is not what decides it. The IRS applies the common-law test and sorts the evidence into three categories: behavioral control (does the salon direct what you do and how you do it?), financial control (who pays for your equipment and product, can you take clients from anywhere, and do you stand to make a profit or a loss?), and the relationship of the parties (what the agreement says, whether you receive employee benefits, and how permanent the arrangement is).

Where those point to independence, it means no withholding, self-employment tax on top of income tax, and estimated payments expected through the year rather than in one lump at filing time. The full test is in Topic no. 762, Independent contractor vs. employee, and Form SS-8 asks the IRS to decide a case that is genuinely unclear.

The part we most often fix is inventory. Retail product sitting on your shelf is not the same as the product you put on a client’s skin, and treating them the same distorts what you owe in both directions. It is worth twenty minutes to set up properly once.

We also see people paying for equipment across several years when they could have claimed it in the year of purchase, or the reverse. Which is better depends on what your year looked like, and that is a conversation rather than a rule.

If you are just starting out, come and see us before your first full year ends rather than after. Setting the record-keeping up correctly at the beginning costs you an hour; reconstructing it afterwards costs considerably more.