ax season is here once again, and as a self-employed pet groomer or salon owner, knowing how to protect your income from Uncle Sam is essential to maximizing your profits. Understanding how to properly report your business activity, leverage deductions and take advantage of tax credits—especially with the major changes introduced by the One Big Beautiful Bill (the Bill)—can significantly reduce what you owe.

Whether you file independently or work with a tax professional, this guide aims to help you navigate the 2025 tax season with clarity and confidence.

Whether you’re a salon-based or mobile pet groomer, it is imperative to report all income, including:

• Payments from grooming services
• Tips
• Cash transactions
• Electronic payments processed through Square, Cash App, PayPal, etc.
• Income reported on a W-2 or 1099 tax form

Even if you don’t receive a tax form, the IRS requires you to report every dollar earned. Unreported income can trigger audits, penalties, or difficulty qualifying for loans when expanding your business or trying to purchase large assets like a home or vehicle.

Being self-employed allows you to deduct expenses that are both ordinary (common in your profession) and necessary for running your pet grooming business. Maintain receipts, logs and documentation for these common deductions:

• Grooming Equipment & Supplies: Clippers, shears, shampoos, brushes, dryers, tables and other tools essential for grooming.
• Rent & Utilities: Salon lease payments, booth rental fees, phone expenses, etc.
• Advertising & Marketing: Business cards, social media ads, website hosting and printed materials.
• Continuing Education: Grooming-specific courses, certifications and industry seminars.
• Business Travel: Costs incurred to attend out-of-town industry expos, trade shows or continuing education events.
• Vehicle Expenses: Mobile grooming vehicle costs (fuel, depreciation, maintenance, etc.) or mileage when driving to the salon, for supply runs or business travel.
• Home Office Deduction: If you perform administrative tasks, such as managing appointments, bookkeeping or marketing from home, you may qualify. This will also help maximize your vehicle deductions.
• Merchant & Bank Fees: Bank and credit card fees, processing fees from Square, Stripe, PayPal, etc.
• Insurance Premiums: Professional liability and other business insurance. Health insurance premiums may also be deductible, but not as a business expense.
• Retirement Contributions: Employer contributions into a Solo 401(k) or SEP IRA can reduce your business income while helping you plan for the future. Contributions to a traditional IRA may also be deductible, but not as a business expense.

As a result of the Bill, the 2025 tax year marks one of the biggest tax overhauls since 2017. Below are the key changes that may impact your 2025 tax filing:

• Permanently Increased Standard Deduction: The Bill makes the higher standard deduction permanent and eliminates personal exemptions for most taxpayers. For 2025, the standard deduction is $15,750 for single filers and $31,500 for married couples.
• QBI Deduction (20%) Made Permanent: Self-employed pet groomers and S Corp shareholders can continue to claim the 20% Qualified Business Income deduction without fear of expiration.
• No Income Tax on Tips: The Bill creates a temporary deduction for qualified tips, claimed on Schedule 1-A. All tips must still be reported as income, but up to $25,000 of eligible W-2 or 1099-reported tips (cash tips do not qualify) may be deducted for income-tax purposes. The deduction applies only for tax years 2025–2028 and may be limited or disallowed at higher income levels. Most importantly, it does not reduce self-employment tax, you’ll still owe tax on all your tips.
• No Tax on Car Loan Interest: If you bought and financed a new vehicle with a gross weight rating under 14,000 pounds in 2025, you may be able to deduct up to $10,000 in interest on your personal car loan thanks to the Bill. The catch? The “final assembly” of the vehicle must have occurred in the United States, there are income limitations that may disqualify you for the deduction and it is temporary, set to expire after the 2028 tax year.
• New Trump Accounts & $1,000 Pilot Contribution: A new tax-advantaged savings account for kids created in the Bill, parents can contribute up to $5,000 annually, though contributions are not tax-deductible. Funds cannot be accessed until the child turns 18, and some rules remain unclear pending further guidance. Most importantly, children born in 2025 may qualify for a $1,000 federal baby bonus, expected to be deposited into the account in 2026. To receive it, you must elect to do so on Form 4547 when filing your 2025 Form 1040.
• Early Expiration of the Clean Energy Vehicle & Home Improvement Credits: The Used, New, and Commercial Clean Vehicle Credits now expire early, ending September 30, 2025 (originally set to expire in 2032 or later). No credit is allowed unless an eligible vehicle was purchased before October 1, 2025. The Energy Efficient Home Improvement Credit and Residential Clean Energy Credit are also cancelled effective December 31, 2025, meaning they may still be claimed on 2025 returns for prior-year improvements but are eliminated for 2026 and later.
• Major 1099-K Reporting Changes: Beginning in 2025, payment processors no longer must issue 1099-K’s until total gross payments exceed $20,000 and there are more than 200 transactions for the year.
• Retirement Contribution Limits: The IRA contribution limit is $7,000 ($8,000 for individuals aged 50+), while the SEP IRA and Solo 401(k) limit is $70,000.
• 100% Bonus Depreciation Restored Permanently: First-year bonus depreciation for business assets is now back to 100%—and it’s permanent! This could be used whenever you purchase grooming equipment over $2,500, such as tables, tubs, computers, laptops, tablets, even your mobile grooming van.

If you expect to owe at least $1,000 in taxes, you are required to make quarterly estimated tax payments on or before the 15^th of April, June, September and January to avoid penalties.

If you’re a self-employed pet groomer, you’re responsible for the full 15.3% self-employment tax (Social Security and Medicare), which is in addition to your regular income taxes, so be sure to plan ahead. Proper bookkeeping and staying on top of your quarterly estimated payments can prevent an unpleasant surprise at tax time.

If you own a grooming business through an LLC, confirm every year with the state that your business registration is active and up to date. And if your income is substantial, making an S Corp election could help you shield a portion of your income from that nasty 15.3% self-employment tax. However, always consult a tax professional to determine if this is the right strategy for you, otherwise it could end up costing you more than it saves you.

If you’re not ready to file your 2025 tax returns by April 15^th, you can request an extension to October 15^th, 2026. But remember: An extension delays your filing deadline, not your payment deadline. You must still estimate and pay your taxes by April 15^th to avoid penalties.

Tax laws for 2025 are more complex than they’ve been in years. Working with a tax advisor who understands the pet grooming industry, and the extensive changes under the Bill, can help you avoid mistakes and maximize your tax savings. Here’s to a smooth and profitable 2025 tax season!

Friedman & Friedman Accounting & Tax Advisors, PLLC (aka Friedman Tax) is a family-owned accounting and tax-advisory firm dedicated exclusively to tattoo artists, pet groomers, body piercers, hair stylists, barbers and salon/shop owners. Founded and operated by two CPA brothers, the “Tattoo Tax Guys,” they bring deep experience in complex tax and accounting work, a passion for helping creative entrepreneurs, and a strong focus on exceptional client service. They offer full-service tax preparation and bookkeeping, LLC formation, strategic tax planning, back-tax cleanup, and consulting, all tailored to the unique needs of artists, stylists and pet grooming professionals.