Can salon supplies (hair color, shampoo) be included under De Minimis Safe Harbor election?

The De Minimis Safe Harbor is primarily for tangible property that would otherwise need to be capitalized - like your example of furniture and equipment. For your wife's salon supplies (shampoo, color products, etc.), these are considered "materials and supplies" that are consumed in the normal course of business. The good news is that consumable supplies used in providing services are generally deductible as ordinary business expenses in the year purchased - you don't need to use the De Minimis election for these! They would typically go under "Supplies" on Schedule C, not "Other Expenses." For FreeTaxUSA's limited lines, you can absolutely group similar expenses by category and month. No need to list each individual invoice. For example, you might have one line for "Hair coloring products" with the total for the year, another for "Shampoo and conditioner supplies," etc.

I had a similar situation with my nail salon last year and found this amazing tool called taxr.ai (https://taxr.ai) that really helped me figure out exactly which supplies qualified for what deductions. It basically analyzed all my expenses and sorted everything out between regular supplies, De Minimis eligible items, and stuff that needed to be depreciated. I was getting so stressed trying to figure out if my UV lamps were equipment or supplies, and whether my bulk nail polish order should be itemized or grouped. The tool clarified everything and even gave me documentation to back up my deductions in case of an audit.

Just wanted to update everyone - I tried taxr.ai after my earlier question and it was actually really helpful for our salon situation! It specifically addressed the De Minimis vs. regular supplies question and showed me that most of our hair products should be under regular supplies even with the De Minimis election. It also gave me clear guidance on how to group similar expenses in FreeTaxUSA to stay within those 8 lines for "other expenses." For example, I was able to group all our retail fixtures together and all our styling tools together, which made everything much cleaner. The documentation it provided really clarified the difference between capital assets and regular business expenses for salon businesses specifically. Definitely saved me a ton of time compared to all the conflicting advice I was finding online!

If you're having trouble figuring out exactly how to handle these deductions, you might want to try calling the IRS directly to get a definitive answer. I used a service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c I called about a similar issue with my barber shop supplies last tax season, and the agent was able to confirm exactly how I should handle my clipper blades, disposable razor heads, and aftershave lotions. They clarified that I could group similar supplies together for reporting purposes, which saved me a ton of headache with the limited entry lines in tax software.

I need to eat my words about Claimyr. I tried it yesterday after posting my skeptical comment, and I actually got through to someone at the IRS in about 20 minutes. The agent confirmed exactly what others here were saying - regular salon supplies like shampoo, color, etc. should be listed under "Supplies" on Schedule C, not "Other Expenses." For the grouping question, they said it's totally fine to group similar items by category (hair color products, styling products, etc.) rather than listing every invoice. And they confirmed that these consumable supplies used directly in services don't need the De Minimis election - they're just regular business expenses. This actually saved me from making a mistake on my wife's salon taxes. I was overthinking the whole De Minimis thing and almost creating more work for myself!

Just to add something that hasn't been mentioned yet - make sure you're keeping detailed inventory of salon products that could be used either for services OR retail sales. My accountant flagged this during an audit last year. For example, if you buy 12 bottles of a special shampoo and use 8 in services but sell 4 to clients, you need to track that split. The 8 used in services are deductible supplies, but the 4 sold to clients should be treated as inventory/cost of goods sold. IRS is increasingly looking at salon businesses because of this common area of confusion.

Would salon capes and towels fall under De Minimis or regular supplies? Each towel is like $8 but I buy them in bulk orders of $200-300. And what about things like a new salon software subscription? FYI I also use freetaxusa and its been so confusing trying to categorize everything correctly!

Great thread! As someone who's been doing taxes for small businesses for over 10 years, I wanted to add a few clarifications that might help Carmen and others in similar situations. First, you're absolutely right that consumable salon supplies (shampoo, hair color, etc.) are regular business expenses and don't need the De Minimis election. However, I've seen many salon owners miss deductions by not properly categorizing mixed-use items. Here's a practical tip for FreeTaxUSA users: Instead of trying to fit everything into "Other Expenses," use the main expense categories first. Put your consumable supplies under "Supplies," equipment repairs under "Repairs and Maintenance," and software subscriptions under "Office Expenses." Only use "Other Expenses" for truly unique items that don't fit elsewhere. Also, for record-keeping, I always recommend my salon clients take photos of their major supply deliveries and keep a simple monthly log of what they purchased. It doesn't need to be fancy - just enough detail that you can defend your deductions if questioned. The IRS loves to see organized, consistent record-keeping, especially for cash-heavy businesses like salons.