As your trusted partner in the hairdressing industry, the team at Haircare Group has been working hard to find simple ways to get the most out of your tax return. Here are our top tips on what to avoid this year’s tax season, plus the ultimate tax time Q&A with Salon Rising the Podcast.
1. avoid DOing your tax YOURSELF (CALL IN THE PROS)
Running a salon and being your own hair boss is rewarding and challenging in equal measure, so no shade on your skills as a bookkeeper, but let’s be real; if you don’t let your clients use box dye at home, why not leave it to the experts when it comes to your taxes? Accountants live and breathe tax, so you don’t have to.
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2. leaving out your work from home expenses
Working from home as a hairdresser is a dream, make sure you count all your 'working at home' expenses including equipment and salon supplies. Here's a few ideas to help you if you work as a mobile stylist or at-home hairdresser:
RECORD IT, CLAIM IT
If you work from home as a hairdresser or stylist to earn an income (even if it’s on a part-time basis), there are several things hairdressers can claim on tax. You may be able to claim a percentage of your rent, utilities and internet (to name a few) for your overall tax return. You just need to keep a record of these expenses and consult with a tax professional as to how much you can claim.
You deserve an upgrade
Just like working in a salon, a working-from-home set-up still needs up-to-date styling equipment, furniture, and tools to do the job. Whether you’re a sole trader or an incorporated small business that works from home, you may be able to claim all these professional expenses at the end of the financial year. Make sure you keep all of your receipts for any equipment, from even very small purchases such as foils and colour to large-scale equipment upgrades like basins and bulk-buy electrical goods and tools.
Split decisions
When you’re working from home, your work and home life might blur into one, so your personal purchases and professional expenses can become one big pile of receipts. To keep work and life as (financially) separate as possible, it’s a great idea to have multiple bank accounts on the go to split your professional expenses, and living expenses, and even have an extra account for your quarterly tax bill (the dreaded BAS!)
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3. FORGETTINg PHONE, TRAVEL & STUDY COSTS
Between life at a busy new salon and studying, tax is the last thing you think of when you’re a hairdresser. Here are a few ways to get the most out of your return when you're too busy to think!
CLAIM YOUR TOOLS & PHONE USE
From buying tools to using your personal phone to record in-salon work and buying tools, all of these expenses such as internet, phone, computer equipment, scissors, styling tools, uniform and footwear (if a certain style has been specified by your employer) can potentially be claimed as a work expense on your end of financial year tax return. You just have to make sure they are all legitimately linked to your work and study as an apprentice, and you can check the ATO’s website to find out which expenses you can claim.
record your work & study travel
If you’re required to travel for your work or to different salon locations you may be able to claim your travel expenses as a deduction. Costs like fuel, public transport and parking fees can all add up to a sizable sum. All you have to do is keep track of your travel expenses and keep your receipts to submit your claim for these expenses on your tax return.
Track your education expenses
As a proactive apprentice, you’re probably attending online workshops or in-person education seminars. Thankfully, you can claim self-education expenses if it relates to your employment. Make sure you keep a record of all your costs associated with any hairdressing educational courses, materials, and subscriptions.
Tax Time Q&A with Salon Rising the Podcast
Have you ever wondered how other successful salons navigate the not-so-fun tax time? Well, wonder no more! Successful business owner and leader of La Sorella Salon and principal mentor of Salon Rising, Samara Palazzi shares her tax time tips with us in a Q&A about all things tax related. From setting up separate bank accounts to what you can claim as a hairdresser, Samara shares some of her wisdom from her 14 years as a successful business owner.
Credit: Salon Rising
Rising Finances (Salon Rising's dedicated finance program)
To recap, here are our top tax tips if you’re in the hair care industry:
- Reach out to the people who love tax more than you, AKA an accountant
- Don’t underestimate the power of hair salon bookkeeping
- Upgrade with new tech, new equipment and supplies before June 30
- Have separate bank accounts for work and living expenses
- Claim working-from-home expenses and self-education
See, we told you we’d help you out!
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Disclaimer: Any tax tips or advice provided in this article are for informational purposes only. Always seek professional advice before making any decisions related to your personal or small business finances and taxes. Haircare Group cannot be held responsible for any losses, damages or expenses that may arise from using or relying on the information provided.
