Hello everyone!
The start of every year is the tax season, and it’s no different for 2024 either. No matter what type of business you’re running, you’re going to have to keep on impressing customers, offer the best (that the competition just can’t keep up with), and on top of that, you need to also make sure you’re meeting all important compliances for your business. Of course, with it being tax season in the first part of the year, this is something that needs to take priority while still juggling everything else.
If you’re a new business owner, it might actually be something that you feel a bit lost on. It’s entirely understandable because, hey, taxes are super confusing. It’s something you’re expected to know, but how can you know it if there’s a lack of clarity on it? Well, here is everything you need to know to navigate your beauty business through the 2024 tax season.
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Are your records accurate?
One of the fundamental pillars of a successful tax season is maintaining accurate and organised financial records throughout the year. Every single business, freelancers included, needs to keep track of all of this strongly! Beauty businesses should meticulously track all income, expenses, and receipts. Also, do you know your federal EIN filing service? Every business needs to have one (this varies per country and tax authority).
A lot of businesses keep everything organised quarterly, and they also utilise accounting software since this can simplify the process. So, by using software, this usually means that they get an accountant to take a look at it, approve it, and then easily submit it. For the most part, all of this is fairly simplistic. So, you can make this really simple for yourself, but you have no choice but to be organised for it.
Understand industry-specific deductions
Now, this is the good part! The chances might be high that you won’t need to pay an arm and a leg for any of these taxes! The beauty industry often involves unique expenses and deductions that businesses can leverage to optimise their tax liability. Basically, just about any and every industry out there has something special and unique that they can deduct (even small freelancers, too).
So, for example, if you’re a salon owner, then you may be eligible for deductions related to equipment purchases, salon renovations, and professional development courses for staff. Usually, if you hire an accountant, they’ll be able to help you find these deductions.
Get those tax credits in
Each year, it seems as if there are more and more tax credits for business owners (especially small ones) to rake in. Just be sure to explore available tax credits that can benefit your beauty business. A few examples would be environmentally friendly practices or employee retention. But it’s really going to help if you familiarise yourself (as in, don’t expect an accountant to know all of these) because, with these incentives, you maximise your tax savings.
Get a good accountant.
This usually varies per business, location, and size. Some use only accounting software, while others will instead opt for a third-party service like H&R Block or even have an in-house accountant. It’s really up to you and what’s best, but make sure they’re reputable, or else it might end up being a total disaster!
Thank you for reading, and until next time, take care.
