As a tax professional and a makeup artist, I often find myself at the intersection of two seemingly unrelated worlds: the meticulous world of tax codes and the creative realm of beauty and cosmetics. One question that frequently arises, especially among fellow makeup artists and beauty influencers, is whether makeup can be deducted as a business expense. The answer isn’t as straightforward as you might think, and it’s crucial to understand the nuances to avoid potential pitfalls with the IRS. In this blog, we’ll explore the ins and outs of deducting makeup as a business expense, what you need to know about tracking expenses, and how to ensure you’re compliant with tax laws.

Understanding Business Expenses

Before diving into the specifics of makeup deductions, it’s essential to understand what constitutes a legitimate business expense. According to the IRS, a business expense must be both ordinary and necessary for your line of work.

Ordinary: An expense that is common and accepted in your industry.

Necessary: An expense that is helpful and appropriate for your business, though it doesn’t have to be indispensable.

For makeup artists, this means that any expense directly related to your work—such as makeup products, brushes, and other tools—could potentially be deductible. However, the key is to ensure that these expenses are solely for business purposes and not for personal use.

Can Makeup Be Deducted as a Business Expense?

The short answer is yes, but with some caveats. As a makeup artist, the makeup you purchase for clients or for use in your professional portfolio can be considered a business expense. However, the IRS is strict about ensuring that these expenses are not mixed with personal use. Here’s what you need to know:

1. Makeup Used Exclusively for Clients: If you purchase makeup that is solely used for your clients, such as foundation, eyeshadow, or lipstick, these expenses are generally deductible. The key here is that the products are not used for personal purposes.
2. Makeup Used for Portfolio Work: If you’re a freelance makeup artist or influencer, you may need to create looks for your portfolio or social media content. Makeup purchased for these purposes can also be deductible, as long as it’s directly related to your business.
3. Makeup Used for Personal and Business Purposes: This is where things get tricky. If you use the same makeup for both personal and business purposes, the IRS will not allow you to deduct the full cost. Instead, you’ll need to allocate the expense based on the percentage of business use. For example, if you use a foundation 50% for clients and 50% for personal use, you can only deduct 50% of the cost.
4. High-End or Luxury Makeup: If you’re purchasing high-end or luxury makeup brands, the IRS may scrutinize these expenses more closely. You’ll need to justify why these specific products are necessary for your business. For instance, if you work with high-profile clients who demand premium products, you may be able to justify the expense.

The Importance of Tracking Your Expenses

One of the most common mistakes makeup artists (and business owners in general) make is failing to track their expenses properly. If you forget to track even a single purchase, it could lead to missed deductions or, worse, an audit. Here’s why tracking your expenses is crucial:

1. Maximizing Your Deductions: By keeping detailed records of your business expenses, you can ensure that you’re claiming all the deductions you’re entitled to. This can significantly reduce your taxable income and save you money.
2. Avoiding Audits: The IRS may request documentation to support your deductions. If you can’t provide receipts or other proof of your expenses, you could face penalties or an audit.
3. Simplifying Tax Preparation: When tax season rolls around, having organized records will make the process much smoother. You won’t have to scramble to find receipts or guess how much you spent on business-related items.

Tips for Tracking Your Makeup Expenses

Now that we’ve established the importance of tracking your expenses, let’s dive into some practical tips to help you stay organized:

1. Use a Dedicated Business Account: One of the easiest ways to track your expenses is to use a separate bank account or credit card for your business purchases. This will make it easier to distinguish between personal and business expenses.
2. Keep Receipts and Invoices: Whenever you purchase makeup or other business-related items, be sure to keep the receipts. You can store them digitally using apps like Expensify or Shoeboxed, or keep physical copies in an organized folder.
3. Categorize Your Expenses: Create categories for your expenses, such as “Makeup Products,” “Brushes and Tools,” “Skincare,” and “Education/Training.” This will make it easier to track how much you’re spending in each area and ensure that you’re not missing any deductions.
4. Use Accounting Software: Consider using accounting software like QuickBooks or FreshBooks to track your income and expenses. These tools can help you generate reports, track mileage, and even estimate your quarterly taxes.
5. Set Aside Time for Bookkeeping: Make it a habit to update your records regularly, whether it’s weekly or monthly. This will prevent you from falling behind and ensure that your records are accurate.

What Happens If You Forget to Track an Expense?

Let’s address the elephant in the room: what if you forget to track an expense? For example, what if you realize you forgot to record $1,500 worth of makeup purchases? Here’s what you can do:

1. Reconstruct Your Records: If you’ve lost receipts or forgotten to record expenses, try to reconstruct your records as best as you can. Look through your bank statements, credit card statements, or even email confirmations to identify the purchases.
2. Estimate the Expense: If you can’t find exact records, you may need to estimate the expense. Be honest and reasonable in your estimation, and be prepared to explain your reasoning if the IRS questions it.
3. Amend Your Tax Return: If you’ve already filed your tax return and realize you missed a deduction, you can file an amended return using Form 1040-X. Keep in mind that you generally have three years from the date you filed your original return to amend it.
4. Learn from the Mistake: Use this as a learning opportunity to improve your record-keeping habits. Implement the tips mentioned above to ensure that you don’t miss any expenses in the future.

Other Deductions Makeup Artists Should Know About

While makeup is a significant expense for many artists, it’s not the only deduction you should be aware of. Here are some other common deductions for makeup artists:

1. Brushes and Tools: Just like makeup, brushes, sponges, and other tools used exclusively for your business are deductible.
2. Skincare Products: If you use skincare products as part of your services (e.g., prepping a client’s skin before applying makeup), these expenses may also be deductible.
3. Education and Training: Courses, workshops, and certifications that improve your skills as a makeup artist are deductible.
4. Travel Expenses: If you travel for work, whether it’s to a client’s location or a makeup event, you can deduct expenses like mileage, airfare, and accommodations.
5. Home Office: If you work from home, you may be able to deduct a portion of your rent, utilities, and other home-related expenses.
6. Marketing and Advertising: Costs associated with promoting your business, such as social media ads, business cards, and website hosting, are deductible.

Final Thoughts

As a makeup artist, your craft is your passion, but it’s also your business. Understanding the tax implications of your expenses is crucial to ensuring that you’re maximizing your deductions and staying compliant with IRS regulations. While makeup can be deducted as a business expense, it’s essential to keep detailed records and ensure that the expenses are solely for business purposes.

If you’ve forgotten to track an expense, don’t panic. Take steps to reconstruct your records, estimate the expense if necessary, and amend your tax return if needed. Most importantly, use this as an opportunity to improve your record-keeping habits moving forward.