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6 | APRIL 2017 | CALIFORNIA STYLIST & SALON |

WWW.CALIFORNIASTYLIST.COM

The Board of Barbering and Cosmetology does not endorse any article,

product, advertisement, or service contained in this newspaper. If you have

questions or concerns about the contents of this newspaper and believe that

it may affect you as a licensee, you may write to the address listed above.

Board of Barbering and Cosmetology

State of California

Department of Consumer Affairs

P.O. Box 944226

Sacramento, CA 94244-2260

1-800-952-5210

www.barbercosmo.ca.gov

Kristy Underwood — Executive Officer

California Board News

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at @CA_BBC

KnowYour Tax Obligation

The barbering and cosmetology industry offers

a number employment options. A licensee may

own his or her own business, or work for someone

else at their shop. Or he or she may simply rent a

booth and function as an independent contractor.

One thing all these options share with each other

and all jobs is a tax obligation because all income

is taxable, according to the U.S. Internal Revenue

Service (IRS). It’s important to be familiar with the

tax rules for your particular situation.

If you’re directly employed by a shop, then your

situation is likely familiar to you: your employer will

record your pay on a W-2 Wage and Tax Statement

that you will receive at the end of the calendar

year. It is the responsibility of the employee to

report their tips to the employer for inclusion on

the W-2.

If you’re a shop owner, then you will be respon-

sible for recording all income and expenses at your

salon, as well as the wages of any employees and

taxes they have paid. You will also need to collect

and pay sales taxes.

If you’re an independent contractor such as a

booth renter, you will be responsible for recording

all income and expenses as well as the filing of re-

turns and payment of taxes related to the business.

The IRS maintains a Web site that caters to

small businesses such as salons:

www.irs.gov/ smallbiz.

Be aware that as a business owner you

may also be responsible for state and local taxes,

in addition to your federal obligation. For more

information, visit the California Tax Service Center

at

www.taxes.ca.gov .

While no one likes to pay taxes, there are benefits

to reporting one’s income accurately. These include:

• An improved financial profile for loans based

on earnings, such as mortgage and auto loans;

• Greater Social Security, Medicare, Workers’

Compensation and unemployment benefits;

• Possibly qualifying for the Earned Income Tax

Credit.

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New Board Member

Jacquelyn Crabtree of Sacramento has been

appointed to the Board. Crabtree has been

owner of four Aveda Salon and Spa Stores since

2005. She was manager and a hairstylist at

Maida’s Touch Salon from 1999 to 2005 and a

bookkeeper at Wild Carter and Oliver Law Firm

from 1991 to 1999.