Everything A Salon Owner Needs To Know About One Big Beautiful Bill Act

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Salon owners can now claim the FICA tax tip credit, a dollar-for-dollar tax credit on payroll taxes paid on team tips that was previously only available to restaurant owners. This new legislation through the One Big Beautiful Bill Act gives salon owners the opportunity to redirect thousands of dollars back into their businesses or personal wealth development.

• Dollar-for-dollar tax credit on the 7.65% employer portion of payroll taxes paid on reported tips
• Example calculation: $150,000 in annual reported tips equals $11,475 in potential tax credits
• Real example shared of a salon owner receiving a $31,850 tax credit used as down payment on rental property
• Tax credit creates opportunity to move from E/S quadrants to B/I quadrants in Robert Kiyosaki's Cashflow Quadrant
• Four steps to claim your credit: report all tips, ensure W-2 classification, file IRS Form 8846, train team on proper tip reporting
• Team members can still receive up to $25,000 in tax-free tips annually

Text BILL to 469-283-5590 for a free step-by-step checklist on how to claim your credit and start building wealth.

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Episode Transcript

Speaker 1 (00:01):
Hey salon owners, today's episode is going to
change the way you look at taxesforever.
Yes, I said taxes, but don'tworry, this isn't boring.
It's actually brilliant becausesomething big just happened and
it's finally putting ourindustry on the map where it

(00:22):
belongs.

Speaker 2 (00:24):
Yeah.
So if you're someone who's eversaid I want to take care of my
team, but tips are killing meand taxes stick with us, you're
about to get a dollar for dollarwin, so let's dive in, love it.

Speaker 1 (00:38):
Okay so picture this here's a restaurant, you know,
and then here's a salon.
Okay so have you ever wonderedwhy restaurants have been
rewarded by the government fortipped wages for decades, but
salons were just left out?
You guys, it wasn't because ourindustry didn't matter, isn't

(01:05):
because our industry didn'tmatter, it was because no one
stood up and said what about usuntil now?

Speaker 2 (01:11):
Yeah, so, if you know this, restaurants for years
have benefited from somethingcalled the FICA tax tip credit.
And here's how it worked.
You know, restaurant owners hadbig tax savings on the other
side of salon owners, likeLindsay was saying earlier, zero
, zero, zero, zero, no taxsavings.
So every time a server reportedtax, the restaurant got a

(01:34):
credit on their taxes.
But for salon owners at thetime, nope, you paid 15.3% in
payroll taxes on every dollaryour team earned in tips and got
nothing back in return untilnow.

Speaker 1 (01:50):
Yeah, because you guys, this new legislation, the
one big beautiful bill act,finally extends the tax credit
to you.
So let me say that again You'renow eligible for a dollar for
dollar tax credit on the payrolltaxes you pay on your team's
tips.
That's not hype, that's the lawyou know.

(02:15):
So if you've ever thought tipsare just too expensive as an
employer, go ahead and toss thatbelief, because what used to
cost you thousands can now putthousands back into your pocket.

Speaker 2 (02:31):
Yeah.
So let's think of this from twodifferent salon owners.
We're going to paint thispicture of you.
We're going to have Ashley andMaya.
So we got Ashley and Maya.
You know both salon owners andboth heard about this new tax
credit, right?
So Ashley, on one hand, meantto follow up.
She bookmarked the email thatthis big, beautiful bill was

(02:54):
launching.
She was busy, but she said, oh,I'll get back to it later, come
April.
She owes more than she thoughtand she's frustrated.
But Maya, she got coached, shefiled correctly and received a
$31,850 tax credit.
Let me say that again, a$31,850 tax credit.

(03:18):
And the most amazing part ofthis is she used it as a down
payment on her first rentalproperty.

Speaker 1 (03:27):
Yeah, I love that.
I love that picture that you'repainting, jen, you know.
So let's just go ahead and fastforward 10 years.
You know, maya owns now fourrental properties and her salons
run themselves and she is nowin the investor quadrant.
You know, her money is workingwhile she's sleeping and Ashley,

(03:49):
she's still doing payroll.
She's asking herself why am Inot further ahead?
But the difference wasn'teffort, it was action.
You know, and I think if you'renot familiar with how you get
to the I quadrant, uh, one ofour favorite books, um, who our
mentor, jane, has been creditedworking with for years, is

(04:11):
Robert Kiyosaki is rich dad,poor dad.
He really dives into you,really dives into how you move
from the E to the I part of theinvestor quadrant, to where at
one point you're employed, thenself-employed, then you have a
business and then investor isthat quadrant.

(04:31):
And so when you move into thatinvestor quadrant, that's when
magic really starts multiplyingand happening inside of your
life.
And we coached to this insideof salon business school all the
time.

Speaker 2 (04:43):
Yeah.
So, like, just remember thislike, the IRS is offering you
money.
So you got two choices you caneither grab it or leave it on
the table for someone else totake.
And we're not talking about acute little bonus, we're talking
, actually, about a wealthbuilding money.
Now, for some of you might bewondering well, how much is this
really worth for me?

(05:04):
And so let's do some quick mathtogether.
If you want to write this down,this will be a great exercise
for you to go do so.
You first want to pull a tipreport from your payroll system
or POS, your CRM, whatever itmay be, and add up the total
reported tips for the year foryour employees.
Now you want to multiply thatnumber by 7.65%, and you're like

(05:27):
Jen, what does that number mean?
This is the employer portion ofsocial security plus Medicare
taxes that you paid, and thatnumber that's your potential tax
credit, dollar for dollar.
So let's say your team reported$150,000 in tips last year.
Yeah, my calculator.
Do some quick math.

(05:47):
So that'd be 150,000 times youknow the 7.65%, 65%, which
equals $11,475.

Speaker 1 (06:07):
That's $11,475 back in your pocket every year.
And this is just the beginning.
I love that.
If you're excited I'm you knowthis is such a great thing to be
able to share with anothersalon owner.
Send them the link to thispodcast now.
But here's what you'll need todo next.
You know the first thing thatyou want to do is make sure that
you're reporting all employeetips, including digital tips.
The next thing that you want todo is make sure your team is W2

(06:31):
.
So this is, you know, hourly orcommission base.
If you're 1099, you're out onthis one.
We would love to have aconversation with you how to
move into a direction whereyou're running a business.
So feel free to reach out to usif you want to make that switch
.
The next thing that you'll want, then, is file that IRS form

(06:53):
8846 through your CPA or payrollprovider.
So that's something you'regoing to want to reach out to
your CPA or your payrollprovider right away to start
getting the ball rolling there.
The fourth thing that you wantto do is make sure you're
training your team to reporttips properly.
You know, because they stillget to keep up to $25,000 in

(07:15):
tax-free tips per year.
So communicate that with them.
Make sure that they're properlyreporting tips, make sure that
they're clocking in and out,cause you'll need that to be
compliant with everything.
Um, you know, because you mightbe worried, hey is my team
going to freak out?
You know we got you.
You know we'll help you explainit in a way that builds trust

(07:38):
instead of fear.

Speaker 2 (07:41):
Yeah.
So let's zoom out when think toyourself, like what would you
do with an extra 10,000, 20,000,or even $30,000 a year?
You know, lindsay, wasmentioned the cashflow quadrant,
esbi, and you can stay in E orS, which is exchanging time for
money, or start investing, andthis tax credit is the bridge

(08:06):
that can take you there.

Speaker 1 (08:10):
Yes, you know.
Yes, We'll help you prepare,yes, We'll help you talk to your
team, but more than that, we'llhelp you use this money
strategically to build realwealth.
So in 2035, you're not stillasking what if I had started
back then?
You know, let's pick the paththat leads to freedom.

(08:31):
You're right on time.
Freedom, you're right on time.
So if, if, if this has spokento you, if you're ready to claim
your credit and make it count.
Text the word bill, that's B IL L to four, six, nine, two,
eight, three, five, five, ninezero.
And did I say two, six, three?

(08:53):
I meant two, eight, three.
So that number is four, six,nine.
Two, eight, three, five, five,nine, zero.
With the word bill B I L L andWilson, you are free
step-by-step checklist.

Speaker 2 (09:07):
Yeah, cause this is your moment to stop surviving
and start building somethingthat lasts.
So until next time, keepgrowing, keep leading and keep
building that beautiful legacySalon Success Secrets.
We're out and we'll see younext time.