Hey, fabulous salon owners and beauty pros! As we approach the end of the year, it's time to start thinking about wrapping up your finances and getting ready for tax season. The process might seem daunting, but with a little preparation, you can make it smooth and stress-free. I've put together some important dates to remember and a handy checklist to help you get organized for year-end tax preparation. Let’s dive in!

Key Tax Dates to Remember:

September 15, 2024: Extended Tax Filing Deadline for S-Corporations and Partnerships

For S-Corps and partnerships that filed an extension, this is the last day to submit your 2024 tax return.

October 15, 2025: Extended Deadline for Individual and C-Corporation Income Tax Returns

If you filed an extension for your individual or C-Corp tax return back in April, this is your final deadline to submit. 

January 15, 2025: Fourth Quarter Estimated Tax Payments Due

If you’re a salon owner or an independent contractor who pays estimated taxes, mark this date on your calendar! Your fourth-quarter estimated tax payments for 2024 are due.

1. April 15, 2025: Individual Income Tax Filing Deadline

   The big day! This is when your personal income tax return is due. Make sure all your documents are organized and filed, or request an extension if needed.

2. September 15, 2025: Tax Filing Deadline for S-Corporations and Partnerships (with Extension)

   If your salon is an S-Corp or a partnership and you've filed for an extension, this is your last chance to submit your 2024 tax return.

3. October 15, 2025: Extended Deadline for Individual Income Tax Returns

   For those who filed an extension back in April, this is the final deadline to submit your individual tax return.

Quick Checklist to Prepare for End-of-Year Tax Season:

1. Organize Your Financial Records
   Start by organizing your income and expense records. Gather all your receipts, invoices, bank statements, and any digital transaction records. This step is essential for accurate bookkeeping and a smooth tax filing process.

2. Reconcile Your Books
   Reconcile your bank and credit card statements to your bookkeeping software (like QuickBooks). This ensures that all transactions are recorded accurately, and no income or expenses are missed. Clean, reconciled books will make tax time much less painful!

3. Review Your Estimated Tax Payments
   If you’ve been making quarterly estimated tax payments, now is the time to review what you’ve paid versus your expected tax liability. Adjust your final payment (due January 15) if necessary to avoid underpayment penalties.

4. Categorize Business Expenses Properly
   Salon professionals often have a variety of deductible expenses, from supplies to rent and marketing costs. Make sure every expense is correctly categorized in your books. Consider less obvious deductions, like professional development courses, mileage for business errands, or home office expenses if you qualify.

5. Track Inventory
   Take an inventory of your salon supplies and products. This helps in adjusting your Cost of Goods Sold (COGS) and ensures that you have a clear picture of what’s on hand going into the new year. Accurate inventory tracking can affect your taxable income.

6. Gather Your 1099 Forms
   If you’ve paid any independent contractors $600 or more during the year, you’re required to issue them a Form 1099-NEC by January 31, 2025. Similarly, if you’re a booth renter or an independent stylist, be on the lookout for your 1099 forms from clients or salons.

7. Consider Retirement Contributions
   Contributing to a retirement plan like a SEP IRA or a Solo 401(k) can reduce your taxable income. It's a great way to save for your future and reduce your current tax burden.

8. Consult a Professional
   If you’re feeling overwhelmed, reach out to a tax professional who specializes in the beauty industry (like me!). They can help you maximize your deductions and keep you in compliance with tax laws specific to your business. (Work With Us)

9. Plan for the Upcoming Year
   Use this time to evaluate your current financial status and set goals for the coming year. Consider implementing a more robust bookkeeping system, such as QuickBooks Online, and setting aside regular time each week or month to stay on top of your finances.

Final Thoughts:

The key to a stress-free tax season is preparation. By staying organized and knowing the important dates, you’ll have more time to focus on what you do best—making your clients look and feel fabulous. Take these steps now, and you’ll glide into tax season with confidence! ~ The Beauty Barber Tax Pro