Tax Services Built for
Beauty Salon Owners

Booth renters are self-employed independent contractors who pay their own taxes via Schedule C, make quarterly estimated payments, and receive a 1099 (if rent paid exceeds $600). Employees receive a W-2 and have taxes withheld by the salon. The IRS applies a strict multi-factor test to determine true worker status — misclassifying employees as booth renters can result in back payroll taxes, interest, and significant penalties. Arrieta Tax ensures every worker at your salon is correctly classified and properly filed.

Beauty salons and self-employed cosmetologists can deduct: booth rental or business rent, professional products and supplies (shampoos, color, nail polish, wax, lashes), tools and equipment (scissors, dryers, nail drills, pedicure chairs), uniforms and protective gear, salon software and payment processing fees, licensing renewal fees, continuing education and cosmetology courses, advertising and website costs, business insurance, and payroll for employees. Equipment and furniture may qualify for Section 179 accelerated depreciation. We review every available deduction to minimize your tax liability.

In New York, most personal care services — haircuts, manicures, massages, and skin care treatments — are generally exempt from state sales tax. However, retail product sales (shampoos, nail polish sold at the counter) are taxable, and New York City adds additional local taxes on certain beauty services. The rules are nuanced and change based on exactly what is being sold or provided. Arrieta Tax stays current on New York State and NYC sales tax rules for salons so you collect exactly what is required — no more, no less.

Yes. Self-employed stylists, booth renters, and independent cosmetologists who expect to owe $1,000 or more in federal taxes must make quarterly estimated tax payments (due in April, June, September, and January) to avoid IRS underpayment penalties. As a self-employed individual you pay the full 15.3% self-employment tax plus income tax. Arrieta Tax calculates your quarterly payments, reminds you of every deadline, and ensures you never face a surprise tax bill at year-end.

For salons earning above approximately $40,000/year in net profit, an S-Corp election can significantly reduce self-employment taxes by splitting income between a reasonable owner salary and distributions. An LLC provides liability protection and pass-through taxation with less administrative overhead. The right choice depends on your revenue, growth plans, and personal financial situation. We analyze your specific case and recommend the most tax-efficient entity structure for your stage of business — with a clear projection of the tax savings.