The Constant
Starting at Impressions front desk in 2006 when he was 19 years old, General Manager Paul Petrowsky is a seasoned professional who owner Sarah Taylor says is responsible for much of her own success.
by Stacey Soble
How COVID-Related Programs Impact Your Tax Liability
How do COVID programs impact your tax liability? Should you convert your employment-based salon to rental? Have salons started submitting Paycheck Protection Plan loan applications for forgiveness? Kopsa Otte's April McDaniel tackles these burning questions.
by Staff
November 17, 2020
3 min to read
As part of SALON TODAY's Burning Questions issue, April McDaniel, CPA, CRSP, with Kopsa Otte Associates tackled some of our readers' toughest questions:
SALON TODAY: How are all these COVID-realted programs going to impact my tax liability this year?
McDaniel: It depends. We are still waiting for some answers to critical questions.
Here's what we know for sure:
Unemployment benefits are taxable
State and local grants are taxable as the federal level. States decide what they want to do individually.
We still need answers to the following:
Will expenses paid with the Paycheck Protection Plan (PPP) loans be deductile? Currently, they are not.
Will forgiven SBA loan payments be considered income?
What happens if you didn’t have taxes withheld from your unemployment benefits or if you had a PPP loan in your business and the expenses are not deductible? What if you received a State/Local grant that is subject to Federal income tax or SBA loan payments are forgiven?
The scary part about all these questions is that each one increases your Federal tax liability. In a year when many are struggling, it seems unbearable to be straddled with additional tax liability on benefit programs meant to help keep you afloat.
What can you do? Two things:
Talk to your State Senators. Email them. Call them. Write them.
Talk to your CPA about how to plan for your tax liability. You may not like the “what ifs” but at least you’ll be prepared.
SALON TODAY: Have you started submitting Paycheck Protection Plan loan applications for forgiveness?
McDaniel: Kopsa Otte is in various stages of helping clients apply for forgiveness on the PPP loans. There are a few smaller banks that are already accepting and processing loan forgiveness applications. The majority of our clients’ banks are holding off on accepting applications until final guidance is issued. The rules keep changing. Our goal is to help our clients achieve full forgiveness while subjecting them to the least amount of stress as possible. None of us need any more of that this year. That is about the only thing that is for certain. In general, as of 10.2.2020, we think it’s best to wait to file for forgiveness until more guidance is received.
SALON TODAY: I'm considering changing my commission or hourly based pay salon to booth rental. Can that work financially for me?
McDaniel:
I know that this question is weighing on many salon owners. It’s really about the numbers. For those owners in high rent areas it’s very difficult to make cash flow. You don’t just have to think about rent. Make a list of all the monthly expenses that will still exist post transition, add in what you want your profit to be plus any debt payments. Now divide that by the number of chairs you have. That’ll give you a rough estimate on the amount you must rent the chairs for to make your desired profit. Don’t forget to factor in tax.
The reality is as an owner, you need to think about more than just the numbers. Moving from a team environment with an established culture to a landlord/tenant relationship takes systems and a commitment to making big operational changes. Think about a strip mall. The stores that rent space in the strip mall don’t get instruction from their landlord on how to dress, take care of customers, when to show up at work and on and on. Nope. The tenant writes a check to the landlord and then hopes mostly not to hear from them unless they need them to fix something.
Lots of things to think about here.
Kopsa Otte Disclaimer: Because every situation is different, it is important that individuals seeking specific advice contact a professional advisor. The info provided does not constitute legal, tax, accounting or financial advice and is offered as an informational service only. No liability whatsoever is assumed in connection with the use of this info.
Subscribe to Our Newsletter
More Salon Management
The Most Wonderful Time in Salons and Spas
Planning is in full swing for the most anticipated events and promotions for the 2026 holidays. As owners share their favorite ways to celebrate, they prove that a carefully planned event can also build culture, increase client loyalty, boost sales, and set a business up for a successful 2027.
by Stacey Soble
Leading with Empathy, Humility and a Mastery of Systems
When things run amok at Mane Attraction Salon, Owners Chris and Jenny Knudsen say General Manager Sami Hernandez is their go-to resource and ultimate sounding board. Meet Sami in this installment of Meet the Manager.
by Stacey Soble
Pagoda Brings AI-Powered Operations to Skinovatio Medical Spa Locations
Pagoda, a new AI-native operating system for scheduling, payments, patient records, marketing, and client communications, launches at Skinovatio Medical Spa in Arlington Heights, Illinois.
by Staff
How Women are Rewriting the Rules of Grey Hair
At a panel discussion hosted by L’Oréal Professionnel in Paris in early July, French Philosopher Sophie Galabru explored the cultural shift where women are increasingly choosing natural, personalized color results over traditional grey coverage. In an exclusive interview with SALON TODAY, Galabru and L’Oréal Professionnel Colorist Pierrick Beringer discuss this shift and how salons and colorists respond.
by Stacey Soble
Warm Leadership and Analytical Precision
At Salon Blonde, Director of Operations treats the staff as the salon's most important guests, while her wonderful 'nerdy' side, loves data, systems, and numbers. Find out how she makes Salon Blonde tick.
by Stacey Soble
Trotting the Globe, Forging Connections, Fostering Artistic Creativity
In an exclusive interview with SALON TODAY, Salon Owner Salvatore Minardi reflects on his past 18 months as Intercoiffure America Canada's World Talent Exchange Ambassador and how his experiences will help encourage cultural and artistic exchange and support greater engagement between ICA and the global organization Intercoiffure Mondial.
by Stacey Soble
Client Retention Guidebook
Everything you need to know about client retention as a salon owner.
Success Grown from Within
Owner Shelby Bills says her general manager, Sydney Osborne, reminds her of the power of leading with heart. Find out how Osborne became a great leader in our lastest installment of Meet the Manager.
by Stacey Soble
How Salon Leaders Can Process the Pain and Lead Forward When a Team Members Leaves Unethically
In her latest blog, Kati Whitledge identifies the five stages salon owners go through when a team member leaves the salon unethically, offering advice for each stage.
How AI Is Closing Revenue Gaps for Salons and Spas
The beauty and wellness businesses pulling ahead aren’t just working harder—they’re using AI to capture demand, personalize pricing, and convert more of every guest interaction into revenue. Here’s what the benchmark data reveals about the growing gap between AI adopters and everyone else.
Sponsored by Zenoti
The Premium Talent Magnet: The Modern Salon Playbook for Attracting Six-Figure Stylists
Stop chasing recruitment ghosts on generic job boards and start curating an elite team. Discover the framework that top-tier salons use to bypass phone tag, automate visual portfolio vetting, and attract high-earning, culture-first beauty professionals directly through real-time messaging. Turn your recruitment process into an exclusive brand invitation that keeps your highest-ticket chairs permanently filled.
Sponsored by Beautista
Five Revenue Leaks Hiding in Your Salon
Your calendar looks full, but is all of that demand actually converting to revenue? From phantom rebookings to underpriced peak hours, the 2026 Benchmark Report exposes five revenue leaks that most beauty and wellness businesses don’t even know they have.
Sponsored by Zenoti
The Heartbeat of Zandi K's Success
After moving to Colorado and teaching at a cosmetology school, Allison Stock joined Zandi K as a stylist, eventually becoming part of the Leadership Team, Education Team and Master Bridal Team. Today, as Director of Operation, Stock is Owner Nicki Wenz's right hand, managing human resources and operations, education and career development, and coaching and culture.
by Stacey Soble
Rethinking Retail in the Era of E-Commerce
In a world dominated by e-commerce, salon owners push back with proven strategies to increase retail sales while motivating team members to educate their clientele and delighting clients with retail-themed events and clever merchandising displays.
by Stacey Soble
The Harper Ellis Hair Co. Certification Program Teaches Stylists a Smarter, Safer Way to Install Extensions
The company's Concealed Bead Method is raising the bar for what professional extension education can deliver.
by Staff
The Micro-Salon Blueprint: How Kat Scott Quadrupled Income by Maximizing Her Suite
Scott maximized her micro-salon by transitioning from stylist to strategic owner, focusing on recruiting and station-sharing. By prioritizing her ownership role over behind-the-chair work, she grew her team to six stylists within the two-chair, 150-square-foot space before eventually moving to a larger facility.
by Staff