In general, an expense is tax deductible if it meets three conditions established by the Internal Revenue Service:
- You incurred the expense in connection with your practice.
- The expense is ordinary (common or accepted as an expense of running a massage therapy practice) and necessary (appropriate or helpful for developing and maintaining your practice).
- The deduction is based on precedent and on the reasonable belief that it is accurate.
Keep Your Receipts
When it comes to claiming a business expense as a tax deduction, it is important that you keep all receipts. If you set up a filing system and spreadsheet that allows you to keep your expenses and receipts organized as you incur them throughout the year, the job of compiling your tax information at the end of the year will be much easier.
Common Deductions for a Massage Practice
The inclusion of an item on the following list does not mean that it is necessarily eligible as a business tax deduction. Consult with your accountant, tax advisor, or the IRS on all questions about appropriate deductions.
- office supplies
- massage supplies
- cost of acquiring merchandise
- magazine subscriptions
- fees for consultants
- credit card fees
- bank account fees
- wages or fees paid
- telephone charges
- property tax
- sales tax
- business tax
- license fees
- depreciation on fixed assets
- rent/mortgage payments
- utilities for office space
- linens and/or cleaning service
- gifts to clients
- business travel
- business mileage
- business meals
- home office expenses
- continuing education
- business conference fees
- business books or references
- association dues
- music for client sessions
Always Get Professional Advice
Rules for what is allowable and not allowable as a tax deduction change almost every year. Also, some deductions, such as expenses for travel, entertaining, and percentage of space used for your practice, are limited, so it is necessary to understand the specific rules that apply to these areas. Penalties and interest for paying the wrong amount of taxes can cost much more than the fees you might spend to hire a professional tax advisor.
For more information regarding taxes, contact a professional tax advisor.
Taking Care of Your Taxes for Massage Therapists
3 CE Credits
Whether you are a new massage therapist or have had a practice of your own for many years, the need for a complete, timely record keeping system is mandatory. Learn the benefits of such an accounting system, including preparation of accurate income tax returns and managing information to more successfully run your massage therapy business.
Register now for this CE course »