As professionals in the beauty industry, your income sources, deductions, and tax obligations may differ from those in traditional nine-to-five jobs. This article is focused on understanding self-employed hair stylist and barber taxes. We will walk you through reporting requirements, eligible deductions, self-employment taxes, and more.
Key takeaways on self-employed hair stylist taxes
- Self-employed stylists are responsible for paying federal income tax, state income tax, self-employment tax (15.3% for income over $400), and making quarterly estimated tax payments.
- Some of the tax deductions you can claim as a self-employed hairstylist include supplies, equipment, marketing, mileage, and insurance.
- Self-employed stylists renting a booth or providing services from home receive 1099 forms for earnings over $600, though not all salon owners issue them
- When reporting your total earnings for the year, include all types of income: service fees, wages, tips (over $20/month), and retail sales.
How does your employment status affect your taxes?
It’s important to understand whether you are self-employed or an employee because it will affect the tax forms you’ll receive and how your income is reported and taxed. If you are someone who works in a salon under the supervision of a manager or owner, you are likely considered a W-2 employee. At tax time, you’ll receive Form W-2, which shows how much you earned during the year and how much of your income was withheld for taxes.
However, if you are a stylist who rents a booth in a salon or services clients from your home, you are considered self-employed (or independent). Self-employed professionals receive 1099s like 1099-NEC or 1099-K from anyone who pays them more than $600 per year. If you rent a salon space, you might receive a 1099 from the salon owner (but not every salon does this, so it’s important to keep records of your own – invoices, receipts, etc.).
A self-employed hairstylist can operate as a sole proprietorship or limited liability company (LLC). Choosing between the two ultimately depends on your specific business goals and personal priorities. A sole proprietorship is a simple and inexpensive business structure to set up, giving you total control. The owner of a sole proprietorship is entitled to all profits while also being responsible for any business debts, losses, and liabilities.
On the flip side, an LLC protects personal assets from the business’s debts and offers more control and tax flexibility. Though owners must pay taxes on their share of profits, this structure ensures a clearer distinction between personal and business assets.
How to file taxes as a self-employed hair stylist
If you’re self‑employed, you’re responsible for paying your own tax liabilities. You’ll report your income on Form 1040, using Schedule C to outline business income and expenses and Schedule SE to calculate self‑employment taxes for Social Security and Medicare. Below is a breakdown of the different tax types you may need to account for.
Federal Income Tax: Your federal income tax rate depends on your filing status and your total income for the year. Everyone pays federal income tax, no matter what their employment status is.
State Income Tax: Depending on the tax laws in your state, you could be required to pay state income tax in addition to federal income tax. Do you cross state borders to go to work? This affects your state tax filing requirement.
Quarterly Estimated Payments: When you are self-employed, money is not withheld from your paychecks for income tax, so the IRS requires that you make regular tax payments during the year, called quarterly estimated taxes. You make quarterly estimated tax payments using Form 1040‑ES if you expect to owe at least $1,000 after credits and withholding.
What income should you report as a self-employed hair stylist?
When you’re reporting your total earnings for tax purposes, you should include these types of income:
- Service fees: Any money you receive for your services counts as income.
- Wages: If you work a second job where you are paid a regular wage, that is also part of your total income.
- Tips: When you earn more than $20 in tips for a given month, you’ll need to report and pay taxes on the total amount. Under the OBBB, eligible workers in tip‑based occupations may be able to claim a federal income tax deduction for qualified tips – up to $25,000 per year – for tax years 2025 through 2028.
- Retail items: Do you sell beauty products in addition to your services? That counts as income, too.
Common tax deductions for self-employed hair stylists
Tax deductions reduce your taxable income, so you pay less in taxes. To claim a business deduction when you are self-employed, the expense must be “ordinary and necessary” for the success of your business. It is important to be organized and keep track of your expenses throughout the year. Let’s take a look at some common deductions for hairstylists.
Car mileage
As a stylist, you may offer house calls as a service to your clients. If you’re self-employed, you can deduct the miles you travel to and from your client visits. But, if you rent a space in a salon, your miles to and from your work location are not deductible.
Home office deduction
Do you see clients in your home? You can claim the deduction if the space you call your “home office” is used exclusively and regularly for your business. For example, if you use a spare bathroom as a salon space and nothing else, that could qualify for the home office deduction. But if you set up a temporary salon in your kitchen, but it’s also where you prepare meals and eat with your family, that space would not qualify for the deduction.
Self-employment tax
Self-employment tax is essentially how you contribute to Social Security and Medicare as a self-employed person.
If your net income for the year is more than $400, you will need to pay self-employment tax. The current self-employment tax rate is 15.3% (12.4% for Social Security + 2.9% for Medicare).
Hair tools & supplies
You can deduct all the tools and supplies you use for your services, including hair styling tools, scissors, combs, styling products, and other necessary items.
Equipment
If you rent a booth or chair at a hair salon, the rental fees are generally deductible as a business expense.
Licensing
Hairstylists may qualify for deductions on any licensing fees required by their state or local jurisdiction to operate legally.
Insurance expenses
If you are self-employed and don’t have access to health insurance through an employer, you may be able to deduct the cost of your health insurance premiums. Additionally, expenses associated with liability insurance to protect your business can also be deductible.
Marketing
Marketing expenses include various costs aimed at promoting your service. This could include designing and printing business cards and flyers, creating and maintaining a professional website to showcase your portfolio and attract clients, as well as investing in online advertising to reach a broader audience through social media.
Charity
Charitable contributions can qualify as a write-off. Generally, you can deduct up to 50% of your adjusted gross income. If you file your business taxes as part of your personal tax return, you must claim the deduction on Schedule A of your personal return.
Do salon assets depreciate?
Bonus depreciation allows you to fully expense qualifying equipment (new or used) in the year you put it into service. After phasing down, the One Big Beautiful Bill passed in July 2025 restored and made 100% bonus depreciation permanent for assets placed in service after January 19, 2025. That’s great news if you’re buying things like salon chairs, dryers, or studio equipment. Just keep in mind that some states don’t follow the federal rules, so bonus depreciation may not be allowed on your state return. For smaller purchases, depreciation might not be necessary – the IRS’s de minimis safe harbor lets you deduct equipment costing $2,500 or less ($5,000 with financial statements) as a regular expense, which self‑employed stylists typically list under supplies on Schedule C.
