Verus Tax Service › Barbershops & Salons
Barbershop and salon books, done properly
I know this trade from the inside. The tax questions that come up in a barbershop are specific, and most general preparers get at least one of them wrong.
What I watch for
Booth rent and 1099s
Whether your barbers are chair renters or employees changes everything — payroll obligations, insurance, and your exposure if the classification is challenged. If they are renters, rent collected is income to you and you may have filing obligations for what you pay out. This is the issue that most often surfaces in an audit.
Cash handling
A largely cash business needs a deposit record that tells a consistent story. Not because anyone is doing anything wrong, but because unexplained deposits are what draw scrutiny, and reconstructing them two years later is painful and expensive.
Product sales and sales tax
Services and retail product are taxed differently in Illinois. Shops selling pomade, oils or tools alongside cuts often have a sales tax obligation they did not realize applied to them.
Chair, equipment and build-out
Chairs, stations, mirrors and dryers are assets, not supplies. Depreciated correctly they shelter income for years. Expensed carelessly, you lose the deduction and create a mismatch that is hard to unwind.
Academy and student income
If you run training or an academy alongside the shop, tuition income and the shop are usually best tracked as separate books even under one entity. It makes both sides legible and protects you if either is ever examined.
Bring last year's return and a few months of statements. I can usually tell you within one meeting whether your classification and sales tax position are sound.
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