In the beauty industry there are several deductible expenses you may be eligible to claim on your tax return. However, keep in mind that tax laws can change, so it's essential to verify these deductions with the Australian Taxation Office (ATO) or consult with a tax professional before claiming them.
Business Expenses
As a lash and brow artist, you can claim expenses related to running your business, such as:- Supplies and Equipment: Deduct the costs of lash extensions, brow products, tools, and any other materials essential for your work.
- Uniform and Protective Gear: If you have a specific uniform or protective clothing (e.g., aprons, gloves) required for your job, you can claim the expenses.
- Training and Professional Development: Any courses, workshops, or training relevant to improving your skills and knowledge as an artist are deductible.
- Licenses and Memberships: Costs associated with professional memberships and licences needed for your business can be claimed.
- Software: Booking software, website and email marketing platforms are all business expenses.
- Advertising: Google Ads and social media advertising can also be claimed as a deductible expense.
Home-based Business
If you operate your lash and brow business from home, you may be able to claim a portion of your home expenses as a deduction. This includes a portion of rent/mortgage interest, utilities, and internet bills, based on the proportion of your home used for business purposes.
Keep in mind if you own your property and you ever sell, you will need to pay capital gains tax on the portion of mortgage you have claimed for business purposes.
- Travel Expenses: If you travel for work-related purposes, you can claim expenses such as transport costs, accommodation, and meals. Keep records of your trips to support your claims.
- Marketing and Advertising: Money spent on marketing your services, such as flyers, business cards, website hosting, and social media ads, is deductible.
- Insurance Premiums: If you have business-related insurance, such as public liability insurance, you can claim the premiums as a deduction.
- Bank Fees and Charges: Deduct any fees associated with your business bank accounts or credit cards.
- Business Use of Mobile Phone and Internet: If you use your phone and internet for both personal and business purposes, you can claim a percentage of these expenses based on their business use.
- Accounting and Bookkeeping Fees: The fees you pay to a tax professional or accountant to help you manage your tax affairs are deductible.
Keeping accurate records of all your income and expenses is crucial to support your claims. Maintain receipts, invoices, and any other relevant documentation throughout the year.
This is something you can easily automate to reduce the amount of time you spend on this whilst ensuring every expense is captured so you can claim the maximum amount.
There are many software options out there that provide this function. With Xero accounting software you can forward email any invoices through to your account and it will be automatically uploaded. Another option is Dext, an app which you can use to upload and store receipts and invoices.
If you do whenever invoices or receipts come in it's all ready for you or your accountant come BAS or end of financial year when your tax return is due, minimising stress and your workload.
This article is merely a guide and does replace advice that can be given by a financial professional. We recommend you seek advice from a qualified tax professional or visit the ATO website to get the most up-to-date and accurate information regarding tax deductions for your specific circumstances.