With a busy day booked with appointments and keeping on top of hair trends, the last thing on your mind is how to claim your expenses and taxes. This year, we teamed up with Canada Revenue Agency to make this tax season as flawless for you as possible. Here are a few tips:
Expensing Supplies and Tools
a). Whether you’re a salon/spa owner, part time worker or paid via salary or commission, you’re considered an employee on a payroll. You can deduct the cost of supplies you purchased for work. Hairspray, shampoo, waxing strips, cotton balls…the list goes on.
For more info, visit: www.cra.gc.ca/employmentexpenses.
b). You could also deduct the cost (up to $500) of eligible tools, such as: curling irons, blow dryers and UV lamps for gel nails. What’s considered an eligible tool? Click here to find out: http://bit.ly/17fbY0l
For this expense, you’ll need your employer to authorize that the tools were purchased by you and used for your work.
For more info, visit: www.cra.gc.ca/trades.
Tips and Gratuities
As a Hairstylist or Esthetician, the majority of your income comes from tips and gratuities. Talk to your employer if any or all of the tips you earn will be included on your T4 slip. If it doesn’t, it’s your responsibility to keep track of it and report them on line 104 of your income tax and benefit return.
Whether you’re renting a chair, working from home or own a salon/spa, you can deduct any applicable business expenses. This includes: chair rental fees or supplies such as hair colour, shears, microdermabrasion tips, nail polish and much more!
- Is your salon or spa based out of your home? If so, you can deduct household expenses such as insurance and heating. Who knew!!? For more info, visit: http://bit.ly/1AP8cH
Apprenticeship Job Creation and Tax credit
Are you a salon owner who recently hired a Red Seal apprentice Hairstylist? If so, you can claim the apprenticeship job creation tax credit. This tax credit is equal to the lesser of $2,000 or 10% of the eligible apprentices’ salaries or wages. You can carry the whole credit amount three years back or carry it forward for up to 20 years!
For more info, visit: http://bit.ly/1DnjwvX
Where do you file your taxes?
You can file your taxes with various income tax software, such as: Netfile or Turbo Tax. Don’t want to do it yourself because ‘ain’t no body got time for that’?! Visit your local H&R block and they’ll help you out!
Owning a salon or spa is more than just cutting hair, doing chemical peels, marketing or hiring employees. As a salon or spa owner, you have to ensure that employee contributions, premiums and tax amounts are properly deducted and sent to the Canada Revenue Agency.
For more info, visit: http://bit.ly/1ABN5JA
The deadline to file your personal income tax and benefit return is April 30, 2015. If you, your spouse, or common-law partner is self-employed, the deadline to file is June 15, 2015. BUT, if you’re self-employed and have a balance owing for 2014, you still have to pay it on or before April 30, 2015.