I’m a hairstylist with a regular W-2 job, and I’m starting to see my own clients independently on the side. I’ll be paying a monthly studio/chair fee and collecting payments directly from clients. I’m planning to operate as a sole proprietor for now. I want to know how I should track income and expenses, what I can deduct, whether I need to make quarterly estimated payments, and what I should be doing now so I’m prepared at tax time

Great timing to get this sorted out before you're deep in it. Here's the practical rundown.

For tracking, open a separate bank account just for your independent work. Run all client payments in and all business expenses out through that account. This alone makes everything dramatically easier at tax time. Use a simple spreadsheet or an app to log income as you receive it and expenses as they happen. Don't wait until April to reconstruct months of transactions.

On deductions, your chair or studio rental fee is fully deductible as your primary business cost. Beyond that, you can deduct professional supplies like shampoo, color, tools, and scissors. Continuing education and licensing fees count. So do business-related portions of your phone bill and any professional liability insurance. If you buy equipment like a blow dryer or styling chair, that's deductible too. Keep every receipt, or at minimum log the date, amount, and business purpose.

For quarterly estimated taxes, yes, you almost certainly need to make them. The IRS expects you to pay taxes as you earn, not just in April. If you'll owe more than $1,000 in federal tax on your self-employment income, you're required to pay quarterly. Self-employment tax alone runs about 15.3% on your net profit, before income tax. The due dates are April 15, June 16, September 15, and January 15. Use IRS Form 1040-ES to calculate and submit payments.

At tax time, you'll report everything on Schedule C attached to your personal return. Profit from Schedule C flows to your 1040 and also gets hit with that self-employment tax.