Posted on March 9, 2020
Sola Salon Studios
To paraphrase Benjamin Franklin, nothing is certain except death and taxes, and with April 15 creeping up on us, we asked Ashley Lantz to help navigate the murky waters of filing your taxes as an independent salon owner. Ashley is a SolaGenius Ambassador and owner of TressPassing in Avondale, Arizona, just outside of Phoenix.
Let’s face it, no one wants to be audited by the IRS, but Ashley was also afraid of not having enough money to pay her taxes on time each year. When she discovered Profit First by serial entrepreneur Mike Michalowicz, who developed a behavioral approach to accounting, her whole approach changed. His theory is simple enough: Take your profit first and divide and allocate only what remains for expenses in order to transform your business from a cash-eating monster to a profitable cash cow.
His advice was a game-changer for Ashley. “Now I set aside enough money to pay my taxes each month, but it’s based on my take-home pay, not my gross income.” As it turns out, meticulous record-keeping is crucial, and Ashley uses SolaGenius to help with that. The cutting-edge app, which is designed to accept bookings 24/7, streamline your calendar, accept payments, get analytics and run reports, also keeps track of your expenses just like QuickBooks does. “Every time I purchase something for my business, I take a picture of the receipt with Expense Tracker.”
“Don’t be afraid to ask for help,” she says, “especially if it’s your first year in business. Find someone you can trust and be candid about how much money you’re bringing in. I went to a friend from high school who works for a big accounting firm, but if you don’t know someone like that, hire an accountant.” If you’re just starting out, she says, don’t forget to keep receipts for what you spend to furnish your suite, like chairs for the reception area or salon décor. “They all fall under the category of start-up expenses.”
Because she’s also a traveling educator for two major brands, Ashley keeps track of any expenses she doesn’t get reimbursed for while she’s on the road—meals that aren’t provided, cabs or Ubers, mileage or even plane fare.
So, in light of the 2017 Tax Cuts and Job Act, here’s a list of some of the deductions beauty professionals can take each year:
Remember, you can audit-proof your business by maintaining good records, and it’s never too late to start keeping documentation. “In that respect, SolaGenius has been invaluable,” says Ashley, who self-identifies as a compulsive record keeper. Not a bad trait to have if you don’t want to get a call from the IRS.