Self Employed Hair Stylist Tax Deductions & Tips For Filing

What'S up, you guys welcome back to my channel holy hair, I'm Laura Ashley and today I'm going to talk about how to filing your taxes and go about organizing all your stuff to get you the most out of your tax return when you're filing as a 1099 Business owner, so I have been running my own business as a salon suite renter for five and a half years now and this past year that I did my taxes. I actually got a return, so I feel like I've kind of mastered the process here, but it has definitely taken me some time to figure this out. Let me tell you it is a bit overwhelming at first and it is a bit confusing. So what I want to do in this video is simplify all of the junk and make it as least stressful as possible to keep track of your expenses. Do your taxes and get you some money back. So let's get right into the video okay. So my first major tip like most important thing, is you find a way to stay organized through the entire year? It'S going to make your life a lot easier. When you sit down to do your taxes, I actually have a drawer upstairs in my office, like I say, pick one spot, one location where you put all of your receipts throughout the entire year. I also have this filing cabinet that I keep my past year's receipts and tax records in just in case. I need to refer back to anything anytime. You buy something for your business. You save that receipt, you put it in your wallet when you get home, you put it in that drawer. I don't care if you have a million things to do you just it's so important, and I cannot stress this enough - save all of your receipts. I'M gon na get into what kind of receipts you should be saving and what you should keep track of in just a little bit. If this is your first year, starting out as a business owner, I would definitely suggest that you put a little bit of money aside for taxes if you haven't already set up your quarterly payments, so I like to pay quarterly personally for my taxes that way at The end of the year, I don't over some huge lump sum amount. I actually pay every three months so that at the end of the year, hopefully I will not Oh anything, so you can go through an accountant to set this up. You know look for somebody that does taxes that you can kind of link up with and just go over a plan for the year. I definitely suggest using an accountant. I have someone that I use and I trust - and I can reach out to her with questions and different stuff like that. It really does not cost much in the long run and it's a write-off I like to make my accountants life a lot easier and go ahead and get everything organized for her the first year that I did my taxes, I did not stay organized. I was not the best at keeping track of everything, and I was just more focused on my business and just keeping my clients happy like in the salon, so I got to the end of the year. We went through everything I had all my. I thought I had all my receipts and everything like laid out. We added everything up. I waited until I got there to add everything up which like took forever. It was honestly like a stressful experience and we get to the end, and I find out that I actually owed $ 12,000 in taxes my first year doing business, because I did not pay quarterly taxes. Naturally, I cried. I just so happened to have a Bible study meeting at church that night and I could not hold it together like it was all I could think about so I'm at church. I just like break down. I'M like I need prayer, please pray for me. So a group of friends at church like gathered around we prayed about it, and I kid you not the next morning I woke up - and I just had this feeling what if I had some more receipt somewhere. What if I had some write offs that I didn't know about, so I searched the house sure enough. I came across a folder that had about 4 months worth of expenses in receipts in that folder and that ended up honestly, like saving my life. That was God himself full-on coming through and saving me, because I was freaking out, so I ended up going back to the accountant and I told her the situation and I gave her all of the receipts we added it up. I went from owing $ 12,000 to Owen $ 4,000, which is a huge difference when I say that expenses matter like. That is why you want to make sure that you're getting the most out of your write-offs and that you are also being honest and truthful with your write-offs. You don't want to take advantage, but you want to put in everything that you rightfully spent for your business. So that you can get it right off for it, so let me just show you my list. I have come up with this awesome list and you guys can change. You know certain categories on here to tailor to your business, but this is all of my categories. In which I write off stuff, you can take a screenshot or take notes or whatever here it is expenses and fees. When I run credit cards they have credit card fees, so that is a tax write-off, so my credit card fees for the year dollar amount. I write it right there then I had eyes my monthly expenses for the whole year Spotify I play music at work, so that is a write-off. Vegara is the online software that I use for booking and scheduling if you're a hair stylist, I definitely recommend vegara. I write off my Amazon Prime, because I buy a lot of stuff for work off of Amazon, so I write that off my rent at the salon we pay rent per week, but I add that up for the year and get the amount, my cell phone bill, I used my phone for work so that counts and my internet. Then we have my business expenses for the year, so salon supplies everything that goes into salon. Supplies is like hair, color, shampoo and conditioner back bar supplies, stuff that I sell at work. All that goes under here, workplace fixtures. If I need to get a new stand, a new chair, a new mirror for work. I moved a couple years ago, so they had a lot of workplace fixtures. That year, I don't always have a ton of workplace fixtures, but sometimes I need to replace something electronics which is going to be like if I needed to get a new computer, a new cell phone and iPad things like that. Client refreshments is going to be wine. Beer, water that I supply for my clients, while they're at the salon, hair, shows and travel say you traveled to New York City for a hair class that you wanted to take and you got certified in something from that hair class. You'Re going to write that off. You'Re going to write off the hotel, the food you ate, while you were there, the uber rides anything you bought at the show. All that is going to go into hair, shows and travels. I try to go to at least two hair shows a year. One is always local in my city and then usually I'll, go to like one other one in a different state. You, the items is going to be your cleaning supplies, basically, any like miscellaneous items that you buy for the salon. You'D be surprised like how many miscellaneous items you end up buying and then my licensing fees. We pay fees every year to have your cosmetology license and then I have donations down here. I always donate to Goodwill, leftover shampoos and conditioners clothes whatever. That call goes in to donations, so then I get everything organized so that I can log them in to this list. Oh another thing that I forgot to add on here, because I don't do a ton of miles, but if you drive really far for your job or say you do a wedding and it's like two hours away and you did hair and makeup for it. You would log in your mileage here so different from hair shows and travels, because that's more like flights and stuff, this would be like mileage that you drove in your car. So that's basically like gas money. You'D do another category that would be like mileage, so that is another expense that you can add all of my monthly expenses. I don't typically have receipts for so those are just things that I know how much comes out each month and I just times that by twelve and then I get the amount for all of these expenses up here. But for my business expenses these are things that typically change each year, so I definitely make sure I have a receipt for everything and I go through and I organized my receipts and I put them into piles. I know that if it was from you know, typically total wine or Target it was going to be client refreshments, and then you know my licensing fees salon. Expenses is always my big one. I get orders at the salon every other week of hair color extensions. All that good stuff - this is a thick pile for the year and, as you can see, it's twelve thousand six hundred and five dollars for last year that I spent on salon supplies so that there's a lot of money to write off. So I organize everything in two piles and then what I do is, I add up one by one with a calculator. I know it's a pain in the butt, but it really does not take that long peach receipt to get the amount in the entire pile. And then I take a post-it note and I write the amount on that category and I either staple it or pin it together somehow, and I keep this all in a folder after I get everything added up. I get my credit card fees on the vegara website. So I logged that number in there and then I get all of these numbers filled out. I give this sheet to my tax lady, and I also give her my 1099 and any other information from that year. That you think is necessary like, for instance, I bought a house last year, so I had a piece of paper come in the mail. That was, I don't know it was like a it said, use this sheet when you file your taxes, so I gave her that she as well and again, I am just showing you guys, my list that I personally use that has worked for me, renting a salon Studio space and working as a hairstylist, so if you have a different kind of business, you can always change these categories, but I hope that I have some helpful tips in here for you guys to use. So I really hope you guys took away some helpful tips from this video. I tried to make everything easy to understand and break it down into parts so that you can stay organized when you do your taxes. I hope that this video helped in some way to make you feel a little less stressed during tax time and a little more confident in yourself as a hairstylist and as a business owner, so that you don't have to owe a ton of money when it comes To the end of the year, thank you guys for watching, don't forget to subscribe button and I'll see you in the next video