What do I (you) need to know about Massage Therapy and taxes?
I’m going to break this down as much as possible. Income, and Business, Taxes sound scarier than they really are, you just have to stay on top of a few things!
This is the most important start to your Financial Management!! And it’s the simplest step in the Tax department of your Business.
The biggest problem? It’s also the easiest to overlook, and put off for another day. Then BOOM, you have endless amounts of receipts, paper, and unknowns staring at you! That’s when it becomes complicated, and overwhelming.
The best advice I can give you? Do it DAILY! Trust me on this. You will save time and headaches in the long run by doing your books daily.
Take the 5 to 10 minutes, each day to do this. It will also give you a clearer picture of how your business is doing. (Another piece of advice? Don’t race out and spend ‘profits’. I’ll cover this in another post as to why).
Types of Bookkeeping:
I have done all of the above, and my favorite? Quicken! (I’ll tell you why in a moment).
Handwritten Ledger can be very time consuming, and you end up doing ‘extra work’. You do your Daily, then Weekly, Monthly, and finally Yearly.
You are manually entering everything, calculator in hand, splitting categories, in your income and expense columns. I found it tedious, and often frustrating.
Excel was less frustrating, but I had to learn how to run the program itself. (And I’m still not ‘great’ at it). I can stumble through it, if needed, but I find it too much of a ‘pain in the neck’… a massage joke… LOL.
Hiring Out was a GREAT idea!! Until the bill came. I paid $1000.00 one year, just to save me the aggravation. The biggest kick? I had to correct their errors, which were many! I have since steered away from that. (Note: most bookkeepers are very professional, and know what they are doing, so should you choose to do this, shop around for one)!! I was unfortunate because I didn’t do my research.
Quicken I LOVE IT! Simple, easy to use, and does almost everything for you! This accounting, and bookkeeping software is the one I’d recommend to any small business owner! You may have to add categories that aren’t already included, but once that is done… smooth sailing! It may look expensive, but it’s worth it in the end. You will only have to upgrade as you choose, I personally haven’t yet. I’m still running my original Quicken from… mmmm…. Yeah, I forget… that’s how long I’ve had it.
The other great thing I like about Quicken? It keeps track of Client information for me as well.
- Amount Paid
- Inventory Sold
Main Categories for Expenses:
- Rent / and or Business use of Home
- Inventory Purchased for resale
- Software Purchased (this includes Quicken)
- Oils / Lotions
- Association Fees / Insurance
- Travel / Entertainment
- Transportation (essential if you are Mobile).
Copy your receipts, and staple them to your Daily. Why? Thermal receipts fade, and rather quickly in some cases. This can cause the Tax Department to refuse your Deductions at year end, or during an Audit.
Write on the back of each receipt:
- The store
- Category / items purchased
Payment Types, Federal Taxes, Income Statement, and Tax Preparation.
How often do you do your Books? I’m curious! Let me know what works for you!
Have an AWESOME DAY!