Deductible for Self Employed on a Cosmetologist's Expenses
- As a self-employed cosmetologist, you are responsible for all your own supplies in most cases. Everything from shears to makeup products you use to inventory for sale, right down to a broom and dustpan that you use exclusively for your business is fully deductible, provided you are in the cosmetology trade to make a profit.
- You can deduct the costs of renting your own studio, if you have a studio, or renting a chair in someone else's salon. If you own the salon real estate, you can deduct the costs of the mortgage and insurance, and deduct the gradual depreciation of the property.
- As a self-employed independent contractor, you can deduct all the insurance and other fringe benefits normally deducted by employers. For example, you can deduct medical insurance premiums and contributions to a simplified employee pension, or SEP, plan you establish for yourself. You can also deduct contributions you make to an individual retirement arrangement, or IRA, on your own behalf. These last two items are "above the line" deductions. You do not have to itemize deductions to claim them and if your business expenses are limited, you can claim these adjustments on your Form 1040 individual income tax return and still get the standard deduction. You can also deduct the costs of maintaining your license and attending classes that will help you advance as a cosmetologist.
- You can claim business deductions against business income by filing a Schedule C, Profit or Loss from Business, along with your Form 1040. You cannot file Form 1040EZ for this purpose. Since you are self-employed, you must also file Schedule SE to file self employment tax if your self-employment earnings exceed $400 for the year.