As a massage therapist, it’s likely that you work in a self-employment capacity. This means that not only are you responsible for providing for your clients great massage experiences, but that you are also responsible for running every aspect of a small business, some of which may not naturally be your area of expertise. Many massage therapists fall short when it comes to managing their finances because, let’s face it, finance can be a complex matter. Fortunately, there are some practical steps you can take to ensure that your finances are in order, no matter what you experience is in that arena. Here are five things ever massage therapist should understand about business finance:
You should keep records of each and every business transaction you make, even down to your exact tip amounts for each massage therapy session. Keep your records in a filing cabinet, organized into groups like sales receipts, purchase records, payment received, business expenses, and whatever other information you feel might even be remotely pertinent come tax time.
No matter how big or small your clientele, you should have both massage insurance plan and a disability insurance plan in place to protect yourself, and your clients, in the event that something unfortunate happens to affect the nature of your business.
Save Now, Pay Later
Many business owners make the mistake of waiting until their tax bills come at the end of the year to think about how they are going to pay them. As a massage therapist, it is likely that your income fluctuates regularly; therefore, saving throughout the year for tax payments is a necessity if you don’t want to end up owing a huge chunk of money that you can’t afford to the IRS. How much should you put away? A good rule of thumb is refer back to last year’s tax obligation and then round up or down, depending on how business this year is going compared to last year.
You Should Have an Accountant On Your Side
Even if you don’t use the accountant regularly for business advice and other services, you should have a working relationship with an accountant so that you can be sure to stay on the straight and narrow throughout the year, so as to avoid costly business accounting mistakes.
Healthcare Worker Deductions
Did you know that there are special tax deductions for healthcare workers that you could benefit from as a massage therapist? Be sure to take advantage of these deductions at the end of the year. For guidance, consult with your accountant.
Bonus: Investing and Retirement
Ok, so this is actually 6 tips. Learn a bit about investing and don’t forget about saving for retirement. You’ll be able to find tons of information about big name investors, the Tim Skyes scam, and retirement planning online. Keep yourself up to date and find a broker to help you create a diverse portfolio.
As you can see, there are some very simple, albeit important, things you can do to protect the financial well being of your massage therapy practice. Keep all of these considerations in mind when managing your massage therapy finances.