As a hair stylist, your employer is required to supply you with a Form W-2, Wage and Tax Statement. You may also receive additional income in the form of tips, which will be reported with your regular income in Box 1. You don’t have to report tips less than $20 each month to your employer, however you will still need to pay tax on such income. You’re also required to state the value of additional tips or gifts received that were not in the form of cash, such as tickets to an event.
Some hair stylists rent a chair from a salon. If this applies to you, you may be considered self-employed and will have to report your income on Schedule C, Profit or Loss from Business.
Whether or not you work for a salon or rent a chair, you can lessen your tax liability by claiming deductions of expenses related to your job. Expenses can be claimed on Schedule A, Itemized Deductions, or a Schedule C for self-employed individuals. Like all deductions, you need to provide receipts as documentation of your expenses. You can deduct:
- Cleaning and upkeep fees for uniforms required for work. These uniforms must not be suitable for normal streetwear, and must be a significant uniform, such as a white service uniform in order to be deductible.
- Licensing fees or occupational taxes that you paid.
- Any medical exams you were required to undergo for the job but were not reimbursed by your employer.
- Supplies you paid for, such as scissors, combs, styling tools, or shampoo.
- Industry specific magazine or publication subscriptions
- Liability insurance you were required to pay
- Services such as scissors sharpening
If you take additional training courses, you may be able to deduct any associated costs, as long as the courses meet specific requirements. Refresher courses or those that familiarize you with new developments are generally deductible. Travel can also be deducted if you take a business trip to learn about new color options and techniques, or extra training. Be advised though, courses that help you meet the minimum requirements of the trade, as well as thought that allow you to get a new occupation are not deductible.