Hi everyone, I need some advice without any judgment please. I’ve been a hairstylist for 7 years and started working independently this February. I didn’t set anything aside for taxes and didn’t get a CPA. I’ve earned $88K this year, my chair rent is $1,350 a month, and inventory costs run between $500-$1,200 monthly. I’ve kept all my receipts and expense records, but I don’t know what steps to take now. Which professional should I contact to sort this out and figure out how much I owe? Also, I’m leaving the hair business for a regular job because running my own business has been overwhelming. Any helpful advice is really appreciated. Thank you .
Start by adding up your chair rent and supplies. Subtract those from your $88K to get your profit. Based on what you shared, your yearly expenses (rent and supplies) are around $23.5K, leaving you with $64.5K in profit. On that, you’d owe about $9K in self-employment taxes and $5K in income taxes if you’re single. If you haven’t paid anything yet, make a payment through irs.gov to reduce penalties. For help with filing, check AARP Tax-Aide or VITA in January—they’re great for small business tax questions.
@River
VITA has income limits, but AARP might work. You could also try using FreeTaxUSA to file your return. If it gets too confusing, you can always ask for more specific help here or consult a tax pro. Don’t forget other deductions like licensing fees, business phone lines, or insurance.
@Han
Good point. AARP should be fine as long as your income isn’t too high. Just make sure you categorize everything—supplies, education, phone, etc.—before you go.
River said:
@Han
Good point. AARP should be fine as long as your income isn’t too high. Just make sure you categorize everything—supplies, education, phone, etc.—before you go.
If you’re keeping inventory, though, that might make things a little tricky. It’s worth checking how AARP or VITA handle that.
@Skyler
True, but if it’s just supplies used in your work, it should be fine. If it’s actual inventory for resale, that might complicate things.
River said:
@Skyler
True, but if it’s just supplies used in your work, it should be fine. If it’s actual inventory for resale, that might complicate things.
Yeah, unless you’re selling lots of products, it’s probably just supplies.
It’s pretty common for new business owners to miss this. Try reaching out to local CPA firms to explain your situation. Since your records seem organized, that’s a great start. Just keep in mind, tax help might cost a few thousand dollars this time of year, but it’ll be worth it to get things sorted.
Don’t worry, this doesn’t sound too complex. A good tax professional should be able to handle it easily.
You’ll likely owe taxes on about $65K, which could mean around $15K for federal taxes plus whatever your state requires. It’s not fun, but it’s not the end of the world. Just set up a payment plan if needed—nobody’s going to show up at your door over this.
It’s okay—mistakes happen! I’d suggest finding a CPA who works with small businesses. They can help you figure out what you owe and set up a plan to pay it off.
Download Schedule C and its instructions from irs.gov. This form will help you report your business income and expenses. It’s a good idea to get familiar with it before filing.
Take a deep breath! You’re ahead of most people just by worrying about this early. Find a good tax preparer or CPA. You can also organize your expenses yourself—supplies, licensing, travel, etc.—and be ready for April 15. Running a business is tough, but it’s manageable with the right help.
This happens all the time. You’ll get through it!
Good on you for tackling this now. A lot of people let it pile up for years and then it becomes a bigger problem.
$88K is solid income for hairstyling. Are you sure switching to a regular job will be better? Once you figure out taxes, you might find it easier next year and grow your business.
You might have other deductions: startup costs, licenses, training, tools, furniture, marketing, and even health insurance if you pay for it yourself. Make sure to check everything.
Set up a business account and run all your work expenses through it. Use an expense tracker—Waveapps is free and works well for simple setups. And try making an estimated payment at irs.gov to reduce penalties.
Payment plans with the IRS are easy to get. If you’ve set up an LLC, you could look into becoming an S-corp to save money. A CPA might help you find options before the year ends. Don’t stress—this is fixable.
I can send you a worksheet to help organize your expenses. You don’t necessarily need a CPA for a sole proprietorship.