Hairdresser and Beauty Professional Tax Return and Deduction Checklist

The tax season might not immediately come to mind as your favourite time of year – but it shouldn't be painful either! In fact, with the right advice from an experienced tax consultant, it could actually become something to look forward to and potentially an opportunity to get a refund from the ATO.  

The key is making sure you claim every legitimate deduction and this checklist is designed to help you tick off every possible business-related expense and maximise tax refund.

This occupation category is a broad one and includes hairdressers, manicurists, masseuses, cosmetic laser specialists, make up artists, barbers and beauticians. To complete your return as an employee in one of these occupations, you'll first need an income statement from your employer (previously called a "payment summary" or group certificate). This is a summary that outlines all of your salary, wages, allowances and bonuses for the year. You won't need to have an actual copy of this statement, as it should be lodged by your employer directly to the ATO. Once this has been lodged, we can download the information for you and then help you work out your deductions. To make it a little easier, we've put together this handy guide, to help you work out some of the things to which you're entitled.

Can I claim any deductions?  

You can claim tax deductions on any money spent during the financial year on products or services that directly related to earning your income. You need to have spent the money yourself (it can't have been reimbursed by your employer) and you need to keep a record of the expense such as a receipt or invoice.

What tax deductions can I claim?

There is a wide range of deductions you can claim as a hairdresser or beauty professional, such as:

• Any items of clothing or footwear, provided it is protective, occupation specific (and not just regular clothing) or a compulsory uniform – you can also claim the costs of laundering these items
• Phone and internet expenses for any work related usage, provided your employer doesn't supply you with the phone
• Costs relating to education, study and training  related to your work such as an advanced colouring and cutting course or attending a beauty expo
• Journals and magazines connected to your employment and industry
• Tools and equipment that you have purchased yourself for the specific purpose of performing your job, such as specialist scissors. If the cost of purchasing a tool or piece of equipment is $300 or more, the amount may need to be derpeciated (claimed over the effective life of the asset)
• Repairs to tools and equipment, such as scissor sharpening
• Any meals you buy and eat when you work overtime, but only if you get an overtime meal allowance under an industrial law, award or enterprise agreement and it's included in your assessable income
   

What can't I claim?  

There are several key expenses you can't claim, including:

• Grooming products of any kind, even if being well groomed is an expectation of your job
• Driving to and from work even if it's a long distance, or any parking expenses (you can only claim car expenses if you are driving between paying jobs)
• Any study or education expenses designed to retrain you for a new area of work (such as a hairdresser training to be a make up artist)
• Any tools or equipment provided by your employer

What records do I need to keep?

Record keeping is important and it's a good idea to create an easy and reliable system to help you keep on top of this throughout the year. You don't need to keep physical receipts, and it's acceptable to keep a digital copy (such as a photo of a receipt or an email receipt) provided it is possible to read:

• The name of the supplier
• Amount of the expense
• Nature of the goods or services
• Date the expense was paid
• Date of the document

 You also don't need to keep receipts for expenses under $10 (as long as these don't cumulatively come to more than $200) and for any items where it is not possible to get receipts, it's sufficient to make a note of the purchase in your diary of all the above details.

What happens if I make a mistake in my tax return?  

It is essential that you take great care in putting together the information and supporting documentation when filing your tax return, and only claim deductions that are genuine to avoid penalties and possibly even prosecution from the ATO. But we all make innocent mistakes sometimes and if you realise you've submitted any incorrect or unsubstantiated claims then you should contact your accountant immediately and they will assist you in making the necessary amendments

Still have some questions about lodging your tax return? Talk to H&R Block. Our experienced tax consultants will be able to help. Call 13 23 25 for details or find your nearest office and  book an appointment  online