Obtaining your license grants you permission to generate income as a beauty professional, but nothing demonstrates your commitment to being professional like paying your taxes. That’s what professionals do; they play and pay by the rules.
We don’t aspire to pay taxes, but our legal obligations make it necessary.
Before proceeding, let me clarify that I’m not a lawyer or tax professional, nor should anything I write be taken as legal advice. You’re responsible for your own tax obligations; seek guidance from a qualified professional to ensure your compliance with federal, state and local tax laws.
Speaking of laws, recent changes at the federal level have caused confusion. The Professional Beauty Association has compiled fact sheets for the 45B FICA Tip Tax Credit (permanent) and No Tax on Tips (temporary) to provide basic information. Rather than make assumptions, please consult with a qualified professional about the impact of these changes on your business and tax liability.
The IRS relies on your voluntary compliance to accurately report your income, including cash and tips, under penalty of perjury. The effort required varies according to your employment status. Being an employee makes it simple, using information from the Form W-2 (Wage and Tax Statement) provided by your employer.
For professionals collecting payments through credit cards, apps and/or online marketplaces, the IRS requires that a payment settlement entity (PSE) issue you a Form 1099-K (guidance updated in October, 2025).
If your salon owner issues a Form 1099 for your work, more likely than not you’re being misclassified as an independent contractor. Either the worker or owner can submit IRS Form SS-8 for an official determination.
As an employee-based salon owner, I had a legal responsibility to process payroll, report and pay tax withholdings and track income and expenses throughout the year. Needless to say, the more complicated your business structure, the more important it is to engage a tax professional.
Timely payment of taxes due should be relatively easy with adequate withholdings from your paychecks (employee) or quarterly payments of estimated taxes (self-employed). That may sound condescending and insensitive, particularly toward those who struggle to pay their taxes, but it’s not meant to be. We all could benefit from knowing how to better manage our personal and business finances.
“The only thing that hurts more than paying an income tax is not having to pay an income tax.” – Thomas Dewar
I’ve written extensively about being professional and frankly, I’m tired. Not of providing services to clients, but of explaining to other beauty pros, salon owners and consumers why professionalism matters. Is it really that hard to do the right thing? Given the proliferation of salons and individuals who could generously be described as being “unprofessional,” it’s obvious that you don’t need to be “professional” to make money in the beauty business. If consumers don’t care whether or not their beauty pro holds a valid license, do they care if taxes get paid? Probably not, and that’s unfortunate for beauty pros and taxpayers everywhere.
An earlier version was published by Beauty Cast Network.