Guidelines

• Individuals--including cosmetologists--who want to claim items as business expenses must follow a simple rule from the Internal Revenue Service in determining what qualifies. The rule is that whatever you claim has to be both "ordinary and necessary" to your work. This means that others in your field would likely have the same expenses and that they relate directly to the tasks you do as a cosmetologist.
  
  

Equipment

• As a cosmetologist, you can deduct the equipment you use with your client. Examples include your scissors, hairdryers, combs, spray bottles, protective drapes and similar items. You have the choice of whether to deduct the full amount of the items all at once or deduct only a portion of the cost spread out over several years (this accounts for items as they depreciate). Many of the items cosmetologists use are fairly inexpensive, so usually, but not always, it makes more sense to claim the full value.
  
  

Health Insurance

• Health insurance is one of the most pressing needs for cosmetologists that are self-employed; in this instance, you can deduct the full cost of your premiums. If you are employed by a company, you also may deduct your premiums, but the expenses have to exceed 7.5 percent of your adjusted gross income to be deductible, and you have to itemize your deductions on Schedule A of your 1040.
  
  

Travel

• If you go to conferences or similar events directly related to cosmetology, you may deduct your travel expenses, including dry cleaning and hotel costs. If you have to travel to a temporary salon location, such as during a remodel, you can deduct the cost of traveling to and from that location. If you work primarily out of a home office, you may deduct the travel expenses you have getting to a secondary office. Regular commuting expenses from your home to a permanent, primary workplace outside of your home are not deductible. When you calculate what you can deduct related to mileage, you can deduct either the actual business expense or use the standard mileage rate. The standard mileage rate for 2011 was 51 cents per mile. Another travel expense you can deduct is 50 percent of your meals.
  
  

Entertainment and Gifts

• If you give your clients gifts, you can deduct up to $25 per person. An example of a gift might be baskets filled with shampoos, lotions and other personal care items.
  
  

Professional Dues

• Cosmetologists are regulated in most states, meaning you have to have a license. You can deduct the costs associated with getting and maintaining your license. You also can deduct fees related to keeping up with your peers and learning about cosmetology, such as subscriptions to professional cosmetology magazines or journals. Memberships in professional cosmetology associations are also deductible.
  
  

How to Deduct

• If you are employed, you'll note your deductions on Schedule A of your 1040 and on Form 2106. If you are self-employed, you'll note your deductions on your business tax return. Sole propietors and LLCs use Schedule C on the 1040. If you are a partner, use Form 1065. Those who are part of an S-Corp use Form 1120-S.