Stylists: Tax Filing Updates Include Changes To Venmo Charges
4 Things Stylists Should Know Before Filing 2023 Taxes
There are three guarantees in a stylist’s life: Death, taxes and a closet filled with bleach-stained clothes. And while we can’t help you with the first and last—we do have a list of must-know tips that’ll make doing your own taxes easier. Before you file your 2023 taxes, see below for updates on write-offs, where to file and the dreaded “$600 Venmo Rule.”
1. What To Know If You Accept Payments Via Venmo & Other Third Parties
Last tax season, we learned about the so-called “$600 Venmo Rule,” stating workers who received $600 or more in business transactions via credit card or third-party payment networks like Venmo, PayPal, Square or Cash App will receive Form 1099-K. Well, good news: The IRS has delayed this new rule again for 2023 federal tax returns.
However, even though the IRS has postponed the $600 rule, you could still receive a 2023 1099-K in the coming weeks from any provider that paid you through an online platform. If you receive a 1099-K, ensure it matches the information in your records. You should also still be prepared for this filing shift.
Download our FREE tax guide to learn how to prepare for filing when you use third-party payment methods.
2. How Covid-19 Relief Programs Can Still Affect Your Taxes
If you participated in any of the below Covid-19 relief programs for small business owners, be sure to download our FREE tax guide to learn how they can affect your 2023 filings.
- Paycheck Protection Program (PPP) Loans
- Pandemic Unemployment Assistance
- Employee Retention Credit (ERC)
3. There Are Now More Free-Filing Options
This tax season, the IRS has updated the Free File program. It now allows people with an adjusted gross income (AGI) of $79,000 or less to file their federal income tax returns for free. That’s a $6,000 increase over last year’s income limit for the service. The program connects taxpayers with the agency’s trusted tax prep partners.
4. Must-Know Write-Off Tips For Stylists
A write-off is a legitimate expense that you can deduct from your taxable income, lowering your taxable income and in turn, lowering your tax obligation.
To be a legitimate expense, the IRS says the business expense must be:
Ordinary: Commonly accepted in the trade
Necessary: Helpful and appropriate to your business
We have a massive list of potential deductions you can possibly claim, but remember—knowing the tax vocab and the ins and outs of tax deductions is important. And finally, if your deductions add up to less than the standard deduction, you may be better off claiming the standard deduction.
Disclaimer: We are sharing this info to be helpful, but we are not certified CPAs or tax attorneys. Use this info to discuss and analyze your own tax situation with a professional tax preparer.