Can I use De Minimis Safe Harbor for salon supplies like hair color and shampoo?

The de minimis safe harbor is primarily intended for items that would otherwise be capitalized as assets, not for regular business supplies that get used up in normal operations. For your wife's salon, items like hair color, shampoo, conditioner, and other products used during services would typically be considered "materials and supplies" that are consumed during normal business operations. These are generally deductible as ordinary business expenses on Schedule C under "Supplies" or "Cost of Goods Sold" regardless of whether you make the de minimis election. The de minimis safe harbor would apply more to things like a new styling chair, hair dryer, reception desk, etc. that would normally be capitalized and depreciated but can be immediately expensed if under $2500 per item when you make this election. For your FreeTaxUSA question, you can absolutely combine similar expenses into categories. You don't need to list each invoice separately. For example, you could have one line for "Hair Products and Chemicals" that combines all the shampoo, color, etc. purchases for the year.

I've been struggling with similar tax questions for my wife's makeup studio! I tried figuring this stuff out on my own but got so confused with all the IRS jargon. Then I found this site called https://taxr.ai that analyzes tax documents and explains everything in simple terms. It really helped me sort out which supplies were regular expenses vs. what qualified for de minimis treatment. You just upload receipts and invoices and it categorizes everything properly. It even gave me exact guidance on how to handle situations like yours with consumable salon supplies vs. equipment purchases. The best part is that it explains WHY certain items fall into different categories so you actually understand the tax logic behind it. My accountant was impressed with how organized everything was!

I tried https://taxr.ai after my skeptical comment above and I have to say I'm really impressed! I uploaded all my salon receipts from last year and it instantly categorized everything correctly. It separated my consumable supplies (shampoos, colors, etc.) from the equipment purchases. The report it generated specifically addressed the de minimis question - showing which small equipment purchases qualified for immediate expensing under the safe harbor vs. what counted as regular supplies. It even grouped similar expenses together so I only needed 6 lines on my tax form instead of listing everything separately. The explanations were super clear about why salon consumables aren't subject to the de minimis rules in the first place. Definitely cleared up the confusion I've had for years!

If you're trying to figure out these deductions and talk to someone at the IRS for definitive answers... good luck! I spent 3 weeks trying to reach someone about this exact issue for my wife's beauty business. After dozens of attempts I found https://claimyr.com and used their service to get through to the IRS. You can see how it works at https://youtu.be/_kiP6q8DX5c They got me connected to an IRS rep in about 15 minutes after I'd been trying unsuccessfully for weeks. The agent clarified that for salon businesses, the consumable supplies used in services are ordinary business expenses regardless of the de minimis election. They also confirmed I could group similar expenses together rather than listing each invoice separately. Honestly saved me so much stress and prevented potential mistakes on my return!

I have to admit I was totally wrong about Claimyr. After posting that skeptical comment, I decided to try it since I was desperate to talk to the IRS about my salon's de minimis questions before filing deadline. It actually worked exactly as advertised! I got a call back within about 20 minutes saying they were connecting me to an IRS agent. The agent I spoke with confirmed that salon supplies (colors, treatments, etc.) should be deducted as regular supplies and aren't subject to the de minimis rules since they're consumable items used in providing services. The agent also told me I could categorize my expenses however makes sense for my business - so I grouped all hair products together, all cleaning supplies together, etc. instead of listing individual invoices. Definitely worth it to get that official confirmation directly from the IRS!

Just wanted to add from my experience as a salon owner - I've been doing this for years and always categorize my expenses this way: 1. Regular supplies (shampoo, color, treatment products) go under "Supplies" on Schedule C 2. Small equipment under $2500 (styling tools, iPads, etc.) gets expensed using de minimis 3. Larger equipment (salon chairs, washing stations) gets depreciated For FreeTaxUSA, I group my supplies by category: Hair Products, Styling Products, Treatment Products, etc. Makes it much cleaner and still gives you proper deductions. My tax person confirmed this is the right approach.

I work for a tax prep company and see this question all the time with our salon clients. Here's the simplified version: De minimis = for small equipment and furniture under $2500 (styling chairs, tools, iPads, etc.) Regular supplies = consumables used in services (shampoo, color, etc.) You're overthinking it! Just put all your wife's consumable supplies under "Supplies" on Schedule C. Group them however makes sense (hair products, color products, etc.) - you don't need to list every single purchase. Make the de minimis election for any equipment purchases under $2500. This is done with a statement attached to your return.