No Employer 401(k) Means You're on Your Own
Booth renters and 1099 stylists don't have an employer-sponsored retirement plan — you have to open one yourself, and a SEP-IRA is the single biggest tax-saving move most beauty pros never make.
How a SEP-IRA Can Reduce Your Income Tax
A SEP-IRA lets you contribute up to 25% of net self-employment income, up to $70,000 in 2025 (rising to $72,000 in 2026). Contributions are deductible for income-tax purposes — they reduce your taxable income, not your self-employment tax, which is calculated on net profit before the retirement deduction applies.
Setting One Up Takes About 10 Minutes
Any major brokerage can open a SEP-IRA in about 10 minutes, with minimal paperwork. There's no reason booth renters with strong income should be skipping this — the barrier isn't complexity, it's just not knowing it exists.
If Your Income Is Lower: The Roth IRA Alternative
If you're below the income limit, a Roth IRA ($7,000/year in 2025 (rising to $7,500 in 2026)) offers tax-free growth instead of an upfront deduction — a real option if you're newer to booth renting and your income doesn't yet justify a SEP-IRA's larger contribution room.