Taxes and makeup! I know I know it’s like a rollercoaster of emotions mentioning both of these words in the same sentence. It’s the lows; taxes, receipts, accounting, estimated payments and keeping track of it all compared to the highs of makeup artistry; supply shopping, creating, enhancing people, making money and so much more!
As a freelance makeup artist, taxes can be an intimidating subject to tackle. With multiple streams of income from all your different clients, different payment methods like Venmo, PayPal, cash, credit card, check and deductions, and self-employment taxes, it can definitely be overwhelming to navigate.
In this blog post, we’ll break down what you need to know about taxes as a freelance makeup artist. First and foremost, it’s important to understand the difference between an employee and a self-employed individual. As a freelance makeup artist, you are considered self-employed. This means that you are responsible for paying your own taxes and keeping track of your income and expenses.
One of the biggest benefits of being self-employed is the ability to deduct expenses related to your business. This includes things like makeup products and tools, travel expenses, advertising costs, gifts for clients, mileage and even a portion of your home office if you work from home. These are just a few examples. It’s important to keep track of all of these expenses throughout the year so that you can accurately deduct them come tax time. It’s also VERY important to stay on top of organizing and entering your receipts each month rather than wait until the end of the year to start this process.
When it comes to paying taxes as a self-employed individual, there are a few different types of taxes you need to be aware of. The first is self-employment tax, which is a tax on your net earnings from self-employment. This tax is calculated at a rate of 15.3% and is used to fund Social Security and Medicare.
In addition to self-employment tax, you will also need to pay federal income tax on your earnings. The amount of federal income tax you owe will depend on your total income for the year, as well as your tax bracket.
To make sure you are paying the correct amount of taxes throughout the year, it’s important to estimate your tax liability and make quarterly estimated tax payments. This can be done using Form 1040-ES, which is available on the IRS website. Tip: If you can swing it, I do recommend hiring an accountant to work with you on your taxes, setting up estimated tax payments and filing.
Another important aspect of taxes as a freelance makeup artist is keeping track of your income. Since you are self-employed, you will not receive a W-2 form from an employer unless you work on commercial productions. In many cases when working on commercial projects, you will be paid as if you were an employer so it’s possible you will receive a combination of W-2’s and 1099’s from clients if the company paid you more than $600 during the year.
It’s important to keep track of all of your income throughout the year so that you can accurately report it on your tax return and eliminate the overload of trying to record a year’s worth of receipts within a week or two when tax day is drawing near. This includes income from both clients and any other sources of income like sponsored content, another side hustle and any type of product sales.
In addition to keeping track of your income, it’s important to keep accurate records of your expenses. This includes receipts for makeup products and tools, travel expenses, advertising costs, gifts for clients, mileage and even a portion of your home office if you work from home. By keeping accurate records, you can ensure that you are deducting everything you are entitled to and avoid any issues with the IRS. Important note: Keep all receipts, income documents and tax returns for AT LEAST 7 YEARS!
In conclusion, taxes can be a complicated subject for freelance makeup artists, but it’s important to understand the basics in order to stay compliant with the IRS. By keeping accurate records of your income and expenses, estimating your tax liability, and making quarterly estimated tax payments, you can ensure that you are paying the correct amount of taxes throughout the year. With a little bit of effort and organization, you can take control of your taxes and focus on what you do best – creating beautiful makeup looks for your clients and creating those brand messages on commercial productions!
Reminder...taxes are due April 18th.