Like any other entrepreneur running their own business, lash artists must keep track of their finances for that particular time of year - tax season. From keeping track of expenses to sales tax from client transitions, the most important thing you can do is stay organized!
While I am not a tax professional, I have learned a few best practices to help myself and fellow lash artists regarding taxes. If you have questions or need help filing, please consult a tax professional - you won’t regret it!
Introduction to taxes as a lash artist
Kick things off on the right foot and set yourself up for future success (and tax breaks) by considering these three things when starting your lash business.
Establish your business
First, you’ll want to consider how the federal government recognizes your business. This is important because how your business is registered will impact the amount of taxes you pay. For example, if you are considered self-employed, you must pay Social Security and Medicare tax in addition to your standard taxes or self-employment tax. However, if you register your lash business as an LLC or S-Corporation, you can significantly reduce the taxes you’ll have to pay as a business owner.
Get organized
When tax time rolls around, there is nothing worse than scrambling for that one piece of paper you misplaced. You should develop a filing system early to keep track of everything, and I mean EVERYTHING. You’ll need to keep track of business expenses- equipment, rent, advertising fees, business insurance, etc. Doing this will help you with your deductions, which will help reduce your tax bill. Check out the IRS website for a list of common business expenses.
You’ll also need to keep track of your income. Things like sale amounts and income from renting a booth are important numbers to have on hand during tax time. If you haven’t already, I suggest opening a business bank account for all your expenses and income to flow through - this is an easy way to separate your personal and business expenses, saving you a major headache during tax season.
Start saving
If there is one thing I’ve learned about taxes over the years, it’s SAVE, SAVE, SAVE! Once you’ve opened your business account, save 20% of your weekly credit card and cash sales. This will help you ensure you have money for your quarterly taxes and reduce your tax bill at the end of the year. You most likely won’t have to pay out everything you’ve saved, so you’ll have a little nest egg left over to give yourself a bonus or for emergencies.
Three tax tips for lash artists
Let’s face it, no one actually enjoys filing their taxes. But there is something very satisfying about reducing your tax bill and knowing you’re prepared for whatever the tax season may bring! Here are three tips I swear by to help myself with taxes as a lash artist and business owner.
Investigate all write-offs or deductions
As mentioned above, you want to keep track of all your business expenses! Did you know you could write off your beauty license or business insurance? Remember that some of these deductions may only apply to specific situations, so knowing when and where to write off expenses is essential.
Overestimate your payments
If you’re estimating how much your tax payments will be, always lean toward the high end of your estimate! If you’re starting as a lash artist, it can be scary to shell out even MORE money but trust me. You will thank yourself in the future for putting more cash toward your tax bill. During my first year as a solo lash artist, I was so shocked by my tax bill from the IRS I actually cried when I saw it and had serious doubts about continuing my business. I don’t want that to happen to any other independent lash artists!
So, if you aren’t already having taxes taken out for the money you earn, try doing quarterly payments. This way, you can reduce your tax bill before getting it and avoid penalties if you don’t pay enough from the start.
Find a trusted tax professional
Trust me, this is the best thing you can do as a lash artist! Your clients come to you with their lash questions because you’re the expert! Working with a tax professional will help you know you’re doing things correctly, find all possible deductions, and address any concerns. This is an excellent idea if you are doing your taxes as a business owner for the first time. They can help guide you so you won’t miss anything and set you up for success.
Tax season can be daunting as an independent lash artist, but it shouldn’t be scary! Stay organized, budget for your quarterly taxes, and when in doubt, ask a professional. My biggest and most important piece of advice (that I learned the hard way) is don’t go it alone. Get a bookkeeper and an accountant, spend the money, and lean on them for support - they know what to do. You got this!