How self employed barbers and hair stylists pay themselves pt 1 | How booth renters pay themselves

Self-employed barbers and hair stylists either booth rent or lease small individual salon suites. The overwhelming majority of these hair professionals are sole proprietors or single member LLCs taxed as sole proprietors. This means as the business owner you’re only able to pay yourself by taking withdrawals from your business bank account. Here are 3 takeaways for paying yourself this way:

1. Make sure all business income is in a separate bank account from your personal funds.
2. Keep track of all your business income and expenses.
3. Save 20-25% of what you take home for taxes.

One thing to point out here, when you’re self-employed and not working as an independent contractor, you won’t receive a 1099 or W-2 at the end of the year with all of your income reported. This is why #2 is so important because as the business owner, you’re responsible for telling the IRS how much money you made throughout the year.

You’ll want to save 20-25% of what you take home for quarterly taxes that are paid to the IRS. Saving this money throughout the year and paying these taxes quarterly is not only required by the IRS but will also help you avoid a large tax bill at the end of the year.

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ABOUT ME (JENN)

Before starting my own business coaching and accounting firm I…

- Grew a struggling hair salon to a multi-6 figure business in 5 years
- Spoke to cosmetology students on the business side of the hair industry
- Worked as a tax analyst and specialist at HR Block Small Business Advisors
- Distributed hair products to hair salons and barbershops along the East Coast
- Created a product line and online hair product eCommerce store
- Imported hair products from the Dominican Republic
- Received my degree in Economics from the University of Maryland at College Park

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DISCLAIMER

This video is for informational purposes only and may not be accurate for your unique situation. Before applying anything stated in this video, please consult with your tax advisors. For unique tax situations, please consult with your tax advisor. Thanks for watching!