Can I file taxes without my nail license if I do nails from home?
I've been doing nails from my home for extra cash for almost a year now. I make around $250-300 a week depending on how many clients I get. I'm wondering if I can report this income when I file my taxes even though I don't have an official nail technician license yet? I'm saving up for cosmetology school but haven't gotten my license yet. I'm worried about what might happen if I include this income - would the IRS flag me for an audit because I'm working without proper licensing? Or is it worse to not report the income at all? Really confused about the right thing to do here for the 2025 filing season!
25 comments


Malik Thomas
You should definitely report the income regardless of whether you have a license or not. The IRS cares about your income, not your licensing status with state boards. You'd report this as self-employment income on Schedule C as part of your tax return. Not reporting income is a much bigger problem with the IRS than working without a professional license (which is a state regulatory issue, not a federal tax issue). Just make sure you're tracking all your business expenses too - products, tools, a portion of your utilities if you're working from home, etc. These can offset your income and reduce your tax burden.
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Isabella Oliveira
•But won't reporting the income on taxes basically be telling on yourself that you're operating without a license? Couldn't the state find out from federal tax records?
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Malik Thomas
•The IRS doesn't routinely share tax return information with state licensing boards. These are separate systems with different purposes. Your concern about "telling on yourself" is understandable, but not reporting income to the IRS is tax evasion, which carries much more serious penalties than operating without a professional license. If you're concerned about the licensing issue, you should work on getting properly licensed for your state, but that doesn't mean you should hide income from the IRS in the meantime.
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Ravi Kapoor
I was in a similar situation last year doing makeup for events without my cosmetology license. I was so confused about how to handle all my income, especially with clients paying me through different apps. I found this service called taxr.ai (https://taxr.ai) that was super helpful for sorting out my self-employment situation. They walked me through exactly how to report my income as a self-employed person, what expenses I could deduct (SO many things I didn't know about!), and how to handle the fact that I was working on getting licensed but wasn't there yet. They even helped me understand how to calculate my quarterly estimated tax payments so I wouldn't get hit with penalties.
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Freya Larsen
•Did they tell you anything about home office deductions? I do hair from my spare bedroom and I'm wondering if I can deduct part of my rent?
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GalacticGladiator
•How much did this service cost? I'm barely making any profit as it is and can't afford expensive tax help.
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Ravi Kapoor
•They helped me figure out exactly how much of my apartment I could deduct based on the dedicated space I use exclusively for my makeup business. It's not just rent - you can deduct a portion of utilities, internet, and other home expenses based on the percentage of your home used for business. As for the cost question, I found it really reasonable especially considering how much they saved me in deductions I would have missed. They have different options depending on what help you need. For me, the peace of mind was worth it since I was worried about the same license issues you are.
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GalacticGladiator
Just wanted to update everyone - I tried taxr.ai after seeing the recommendation here and it was exactly what I needed! I was super nervous about my unlicensed hair braiding business, but they helped me understand that reporting income and having a license are separate issues. I uploaded my payment records and they sorted everything out, showed me which supplies were deductible (even stuff I didn't realize like my phone bill since I use it for booking!), and explained how the self-employment tax works. They even helped me set up a system for tracking everything going forward. I'm still working on getting my license, but at least I know my taxes are handled correctly. Honestly wish I'd known about this last year!
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Omar Zaki
If you're worried about the IRS, just know that trying to contact them directly is almost impossible these days. I spent weeks trying to get someone on the phone when I had questions about my side gig income. Finally used https://claimyr.com and got through to an actual IRS agent in like 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I asked specifically about working without industry licenses and they confirmed what others have said - the IRS cares about you reporting income, not whether you have state-level professional licensing. They're separate issues. The agent actually gave me really clear advice about how to properly report my crafting business income even though I was selling without proper permits at the time.
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Chloe Taylor
•Wait, you're saying this service actually gets you through to a real IRS person? How is that even possible? I thought those phone lines were basically black holes.
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Diego Flores
•This sounds like a scam. Nobody can magically get you through to the IRS faster than anyone else. They're probably just recording your call and stealing your information.
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Omar Zaki
•Yes, it actually connects you with a real live IRS agent! The service basically waits on hold for you and then calls you when they get a human on the line. It saved me hours of hold time. I totally understand the skepticism. I felt the same way at first! But it's legitimate - they don't ask for any sensitive information, they just call the IRS and wait on hold so you don't have to. When an agent answers, you get connected. It's like having someone wait in line for you.
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Diego Flores
I have to admit I was COMPLETELY wrong about Claimyr. After posting that skeptical comment, I decided to try it myself because I was desperate to talk to someone about my side business tax situation. It actually works exactly as described - they called me back when they got an IRS agent on the line! I was able to ask directly about reporting income from my unlicensed woodworking business. The agent confirmed that I need to report ALL income regardless of licensing status and explained exactly how to fill out Schedule C for my situation. Saved me hours of stress and hold music, and now I know exactly what to do. Sorry for doubting!
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Anastasia Ivanova
Just want to add something important - make sure you're setting aside money for taxes as you go! Self-employment income gets hit with both income tax AND self-employment tax (15.3%). I learned this the hard way with my photography side hustle and ended up owing WAY more than I expected. A good rule of thumb is to save about 25-30% of what you make for taxes. Better to have extra money saved than not enough when tax time comes.
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Emma Wilson
•Omg thank you for mentioning this! I haven't been setting aside anything. Do you think I should start putting money aside now or am I gonna be in big trouble for what I've already made this year?
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Anastasia Ivanova
•It's never too late to start setting money aside! Start now with your current earnings and moving forward. For what you've already made this year, try to calculate roughly how much you've earned so far and set aside 25-30% of that amount if possible. If you can't save the full amount right away, save what you can and make a plan to catch up. Remember that you can also reduce your tax liability by tracking and deducting legitimate business expenses, so start keeping those receipts!
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Sean Murphy
Just a heads up from someone who's been doing nails without a license for years - yes you should DEFINITELY report the income, but be smart about your deductions! Keep ALL receipts for: - Nail products and tools - Sanitizing supplies - Portion of your utilities - Advertising costs (even if just Instagram posts) - Mileage if you ever drive to clients - Continuing education (youtube premium if you learn techniques there!) The IRS doesn't care about your license, but they do care if you're not reporting income. I got away with no license for years but got in trouble when I didn't report some cash clients.
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StarStrider
•This is super helpful! Do you use any special app or system to keep track of all these expenses? I'm terrible at organizing receipts.
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Giovanni Moretti
•I use a simple phone app called Expensify to snap photos of receipts right when I buy stuff. It automatically categorizes most things and you can export everything when tax time comes. Way easier than trying to keep track of paper receipts! Also wanted to add - if you're using a room in your house exclusively for your nail business, you can deduct a portion of your rent/mortgage too. Just measure the square footage of that room vs your whole house and use that percentage.
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Megan D'Acosta
I'm in a similar situation with my small tutoring business! I've been putting off dealing with taxes because I wasn't sure about the proper way to report everything. Reading through all these responses has been really eye-opening. The key takeaway I'm getting is that the IRS requirement to report income is completely separate from state licensing requirements. It makes sense when you think about it - the federal government wants to know about your income for tax purposes, while professional licensing is handled at the state level. I'm definitely going to start keeping better track of my business expenses. I had no idea things like a portion of my phone bill or home utilities could be deductible! Also going to start setting aside that 25-30% for taxes - I've been spending everything I make and would be in trouble come tax time. Thanks everyone for sharing your experiences. It's reassuring to know I'm not the only one navigating this gray area between getting licensed and reporting income properly.
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Aisha Hussain
•I'm so glad this thread has been helpful for you too! I was in almost the exact same boat with my pet-sitting business - making decent money but totally clueless about the tax side of things. One thing I learned the hard way is to also keep track of the dates and amounts for each client, not just the expenses. The IRS likes to see organized records if they ever have questions. I started using a simple spreadsheet to log each appointment with the date, client name (or initials for privacy), service provided, and amount paid. Also, don't forget that if you're making over $400 in self-employment income, you'll likely need to file quarterly estimated tax payments to avoid penalties. I missed this my first year and got hit with an underpayment penalty even though I paid everything when I filed my return. Better to pay as you go! Good luck with your tutoring business - it's actually pretty empowering once you get the hang of tracking everything properly.
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Zara Ahmed
This thread has been incredibly helpful! I'm in a similar situation doing freelance graphic design without any formal business registration. I've been terrified about reporting the income because I wasn't sure if I was "official" enough. Reading everyone's experiences really clarifies that reporting income and having proper licensing/registration are two completely separate issues. The IRS wants to know about ALL income regardless of whether you have the right permits or certifications. I'm definitely going to start implementing some of the tracking systems mentioned here - especially using an app to photograph receipts right away. I've probably missed out on so many legitimate deductions because I'm terrible at keeping paper receipts organized. The advice about setting aside 25-30% for taxes is also a wake-up call. I've been treating all my freelance income as "fun money" and would be in serious trouble come tax season. Starting a separate savings account for taxes this week! Thanks to everyone who shared their real experiences - it's so much more helpful than trying to figure this stuff out from confusing government websites.
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Ella Harper
•I'm so glad this thread exists! I just started doing freelance bookkeeping from home and was having the exact same concerns about whether I need to be "officially registered" to report my income. One thing that really helped me was actually calling the IRS directly using that Claimyr service someone mentioned earlier. The agent I spoke with was super clear that income reporting requirements are totally separate from business licensing or registration requirements. She said even if you're just doing odd jobs for cash, you still need to report it if it's over the filing threshold. I also wanted to add - for anyone doing freelance work, make sure you're getting 1099s from clients who pay you over $600. It makes your record-keeping so much easier and ensures you don't accidentally under-report income. Some of my clients didn't know they were supposed to send them, so I had to educate them too! @Zara Ahmed - definitely start that tax savings account! I use a high-yield savings account specifically for taxes so the money at least earns a little interest while I m'holding it for the IRS.
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Miguel Herrera
This whole discussion has been a lifesaver! I've been doing mobile pet grooming without proper licensing and was losing sleep over whether to report my income. Seeing everyone's experiences makes it so clear that the IRS and state licensing boards operate completely independently. I'm definitely going to implement the expense tracking tips mentioned here - I had no idea I could deduct things like my phone bill or even YouTube Premium if I use it to learn new grooming techniques! I've probably been leaving hundreds of dollars in deductions on the table. The 25-30% tax savings rule is going to be a game changer too. I've been spending everything I make and would have been in serious trouble come tax time. Opening a separate savings account tomorrow and starting fresh with better habits. One thing I wanted to add for other mobile service providers - don't forget to track your mileage between clients! I drive all over town for appointments and apparently that's a legitimate business deduction I've been missing out on. Every mile adds up! Thanks everyone for sharing your real-world experiences. It's so much more helpful than trying to decode IRS publications on your own!
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Emma Johnson
•This is such great advice about tracking mileage! I just started doing mobile massage therapy and hadn't even thought about deducting travel between clients. Do you use a specific app to track your mileage automatically, or do you log it manually? I'm also curious - for those of us doing mobile services, can we deduct things like car maintenance and gas as business expenses too, or is it better to stick with the standard mileage deduction? I'm trying to figure out which method would save me more money. The expense tracking tips in this thread have been eye-opening. I had no idea so many everyday things could be legitimate business deductions when you work from home or provide mobile services!
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