Salon Tax Deductions 101 (Without Getting Lost in the Weeds)
Introduction
Every tax season, the same questions pop up in salon and spa circles:
“Can I write off my shears?”
“What about my suite rent? My phone? My education?”
“Do I need to keep every little receipt for every little thing?”
It’s a lot.
On one side, you have people saying, “Write everything off!”
On the other, you have fear that if you get it wrong, the IRS will show up at your shampoo bowl tomorrow.
The truth lives somewhere in the calm middle:
Yes, there are many legitimate salon tax deductions.
No, you don’t need to become a tax expert to use them.
Clean, organized books make all of this much easier for you and your accountant.
In this guide, we’ll cover:
What a tax deduction actually is (in plain English)
Common, everyday deductions for salons and spas
A few gray areas to bring to your tax pro (not DIY guess)
How clean bookkeeping sets you up to claim more of what you’re allowed
A free Salon Tax Deduction Brainstorm worksheet to spark a calm conversation with your accountant
I’m not here to be your tax preparer or CPA—that’s their lane. I’m here to help you have the organized, clear numbers that make their job (and your life) easier.
1. What a Tax Deduction Actually Is (In Plain English)
Let’s strip out the jargon.
A tax deduction is simply a business expense that the tax rules say you’re allowed to subtract from your income before calculating how much tax you owe.
Very simplified, it looks like:
Money in (revenue)
– Money out (allowed business expenses)
= Profit (what you’re taxed on)
So if you:
Earn $100,000
Have $40,000 in legitimate, deductible expenses
You’re not taxed on the full $100,000—only on the $60,000 in profit (how this’s taxed depends on your entity and situation).
Deductions are not “free money” and they aren’t cheating. They’re simply the recognized cost of doing business.
📌 Practical Tip:
Write this somewhere you can see it during tax season:
“Deductions = the real costs of running my salon. My books help tell that story.”
Your job isn’t to know every rule. It’s to keep honest, organized records of those costs.
💡 FACT:
Research on small business tax compliance shows that confusion—not bad intent—is the main reason many owners underclaim legitimate deductions.
2. Everyday Salon Deductions You’re Probably Already Paying For
There are categories your accountant almost always expects to see for a salon or spa. These are expenses that are typically deductible when they’re ordinary and necessary for running your business (always confirm specifics with your tax pro).
Common examples:
Rent / Lease
Salon suite, storefront rent, shared space fees
Utilities & Internet
Electricity, water (if you’re responsible), internet used for booking, marketing, POS
Software & Subscriptions
Booking systems, POS, accounting software, Canva, marketing tools
Insurance
Liability insurance, property insurance, sometimes health insurance depending on setup
Professional Fees
Bookkeeper, accountant, legal fees related to the business
Education & Training
Classes, workshops, online courses, industry events
Supplies & Backbar
Color, developer, lightener, shampoo/conditioner used in backbar, foils, gloves
Retail Inventory
Products you purchase to sell to clients
Marketing & Advertising
Website hosting, branding, online ads, printed materials
Equipment & Furniture
Chairs, shampoo bowls, dryers, mirrors, smaller tools (depending on cost and useful life)
Clean books make sure these aren’t lost in a giant “miscellaneous” bucket.
📌 Practical Tip:
On your Salon Tax Deduction Brainstorm, you’ll have a section listing these common categories with space to jot:
“Do I have this? Where does it show up in my books?”
Even this one step can help you spot expenses you are paying for but haven’t been categorizing clearly.
💡 FACT:
Studies have found that many small businesses underclaim legitimate deductions simply because their expenses were not tracked or categorized accurately during the year.
3. Less Obvious Deductions Salon Owners Sometimes Miss
Then there are expenses that are easier to forget or feel unsure about (your accountant is key here), such as:
Education-related travel
Travel costs to attend a class or conference (when primarily for business)
Phone
The portion of your phone bill used for business (booking, client communication, social media)
Home office (if applicable)
If you have a dedicated space at home used regularly and exclusively for business admin (not just your couch), part of your home expenses may be deductible
Small tools and supplies
Shears, brushes, capes, carts, decor, ring lights, etc.
Bank & payment processor fees
Fees from Square, Stripe, your bank, etc.
Memberships & professional dues
Industry memberships, trade groups, relevant subscriptions
These are exactly the kinds of things that get missed when your books are patchy or when personal and business are mixed.
📌 Practical Tip:
Your Brainstorm worksheet can have a “Hmm, do I have these?” section:
Things I Might Be Paying For That Count as Business Expenses:
☐ Education travel
☐ Portion of phone/internet
☐ Home office (ask tax pro)
☐ Small tools & decor
☐ Bank & processor fees
☐ Memberships & dues
You’re not deciding what’s deductible alone—you’re getting ready to have a better-informed talk with your tax pro.
💬 Quote:
“It’s not your job to know all the answers. It’s your job to know when you need help.” – Unknown
💡 FACT:
The IRS allows deductions for “ordinary and necessary” business expenses; the gray area is how much and how, which is why having a tax professional + clean books is so valuable.
4. Gray Areas You Shouldn’t DIY (Bring These to Your Tax Pro)
There are a few categories where it’s especially helpful to have a tax professional weigh in, because the rules can be nuanced:
Home office
Requires a dedicated, regular, exclusive business use area; methods of calculating vary.
Vehicle / mileage
Standard mileage vs. actual expenses, commuting vs. business travel.
Meals & entertainment
Rules have changed a lot over the years; some meals are partially deductible, some not.
Owner health insurance & retirement contributions
Potentially deductible in specific ways depending on your entity and setup.
Trying to DIY these from a post on the internet can lead to missed opportunities—or unintentional mistakes.
📌 Practical Tip:
On your Brainstorm, include a “Talk to my tax pro about…” box:
Questions for My Tax Professional:
Home office? Yes/no, and how much?
Vehicle/mileage: what’s realistic and safe for me?
Meals: what should I be tracking?
Health insurance / retirement: any opportunities I’m missing?
Bring this to your tax appointment (along with your Cozy-ledger-clean books, ideally).
💡 FACT:
Tax rules around home office, vehicles, and meals are some of the most frequently misunderstood by small business owners, making professional guidance especially important.
5. How Clean Books Make Deductions Easier (and Safer)
This is where organized bookkeeping quietly changes everything.
When your books are clean and categorized:
Your Profit & Loss already shows totals for major deductible categories (like rent, supplies, education).
Your Balance Sheet helps track assets and loans correctly.
Your accountant can quickly scan for:
Reasonable levels of common expenses
Missing or oddly low categories
Areas where you might be under-claiming deductions
When your books are messy:
You might forget whole buckets of expenses.
Your accountant has to guess or spend extra (billable) time recreating the year.
You may leave real money on the table in unclaimed deductions.
📌 Practical Tip:
If you’re already working with The Cozy Ledger (or another bookkeeper), ask:
“Can we pull a year-end Profit & Loss and walk through my main expense categories together before I talk to my tax pro?”
If you’re not yet working with a bookkeeper, your Brainstorm worksheet can help you at least list out what you know you’ve been paying for.
💡 FACT:
Accurate, categorized bookkeeping throughout the year is one of the biggest predictors of whether small businesses successfully capture all the deductions they’re entitled to.
6. Using a Deduction Brainstorm (Instead of Guessing at the Last Minute)
The Salon Tax Deduction Brainstorm I created for you is not a tax form. It’s a conversation starter.
You can use it to:
Jog your memory about what you actually spent money on last year.
Match those expenses to categories in your books (or make notes if they’re missing).
Create a short list of questions and edge cases to hand your accountant.
Think of it as a bridge between:
Your lived experience of running the salon (“I paid for XYZ all year”) and
The more formal world of tax rules and returns
📌 Practical Tip:
Before your tax appointment:
Fill in your Brainstorm as best you can.
Mark anything you’re unsure about with a little “?”
Attach it to an email or bring it in person to your tax pro.
They’ll appreciate that you’ve thought this through—and you’ll feel less like you’re walking in empty-handed.
💬 Quote:
“Clarity is kind.” – Brené Brown
💡 FACT:
Clients who come to tax appointments with organized notes and categorized books tend to have shorter, smoother meetings and more confidence in their final return.
7. Deductions Are a Team Sport: You, Your Books, Your Tax Pro (and Maybe Your Bookkeeper)
You don’t have to hold all of this in your head.
Your role:
Run your salon
Keep or support honest, organized records (or hire someone to do it)
Share context with your tax pro (“Here’s how my business actually works”)
Your bookkeeper’s role (like The Cozy Ledger):
Categorize income and expenses
Reconcile your accounts
Help you see your spending in clear categories
Provide clean reports for you and your accountant
Your tax pro’s role:
Apply the tax rules to your real-world numbers
Decide which expenses are deductible and how
File your return and advise on bigger-picture strategy
You’re not supposed to be all three. You just need to make sure someone is handling each part with care.
📌 Practical Tip:
At the bottom of your Brainstorm, you might add:
Support I’d like for next tax season:
☐ Monthly bookkeeping
☐ Year-end review of books
☐ Tax planning meeting mid-year
Because I don’t want to DIY: __________________________ again.
You’re allowed to build a team that lets you focus on the work only you can do.
💡 FACT:
Small businesses that work with both a bookkeeper and a tax professional tend to have more accurate filings and a better understanding of their numbers than those who try to DIY everything indefinitely.
Conclusion: You Don’t Have to Know Every Rule to Claim What’s Yours
You don’t need to memorize the tax code to benefit from salon tax deductions.
You just need:
Honest, organized books
A basic understanding of what kinds of expenses matter
A tax pro you trust to make the final calls
The Salon Tax Deduction Brainstorm is a simple way to get your thoughts in order, so you walk into tax season feeling less scattered and more supported.
You’ve worked hard all year to keep your salon running. You deserve to fully and fairly claim the costs of doing that.
You don’t have to get it perfect. You just don’t have to do it alone.
Want to Feel More Prepared (and Less Guessy) About Salon Tax Deductions?
You don’t have to memorize the tax code to claim what you’re allowed—you just need clean books and a clear starting point.
Download the free Salon Tax Deduction Brainstorm and, in a short calm session, you can:
Jog your memory about the real costs of running your salon
Match those expenses to categories in your books
Create a thoughtful list of questions for your tax professional
👉 Grab your Salon Tax Deduction Brainstorm here.
And if you’re realizing your books aren’t organized enough to even start this conversation, that’s exactly where I come in with calm, done-for-you bookkeeping at The Cozy Ledger.
