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Articles > Business > 3 Things Salon Owners Must Know About Taxes
April 12, 2021

3 Things Salon Owners Must Know About Taxes

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Tax season can be SUCH a headache. As a salon owner, you have so much to worry about—so we’re making it easier! Here are three things you should make SURE you don’t overlook!

 

1. Your employees must be classified correctly.

A common mistake is that employees are classified as independent contractors, when they are actually employees. As the owner, it’s your responsibility to ensure your business complies with state and federal employment tax laws.

 

Are you classifying employees correctly? Download our 19-page tax guide and find out!

 

2. You must collect taxes on tips.

As the owner, you must collect income tax, employee Social Security tax and employee Medicare tax on employees’ tips. Once your employees report their tips to you, the ball is in your court to appropriately report them to the federal government.

 

3. You can claim a refundable tax credit against your share of Social Security tax.

The Employee Retention Tax Credit (ERTC) allows employers to get a tax credit for their share of Social Security tax equal to 70% of the qualified wages. The max ERTC available is $7,000 per employee per calendar quarter.

 

Get more info on salon owner taxes: Enter your email address below to get the FREE 19-page PDF!