Issue link: https://www.massageandbodyworkdigital.com/i/434495
TA X PL ANNING FOR MASSAGE THERAPISTS F r e e m u s i c d o w n l o a d s f o r C e r t i f i e d m e m b e r s : w w w. a b m p . c o m / g o / c e r t i f i e d c e n t r a l 91 Employees If you are an employee (defi ned by the IRS as anyone who receives a W-2), there is not a lot of planning you need to do, beyond looking for deductions to claim. If you don't have a substantial amount of deductions, don't worry about itemizing them: the government gives you a $12,400 married/$6,200 single write-off without itemizing. Here, however, are a few itemized deductions you may want to consider: • If you have a high-deductible health insurance plan, consider a Health Savings Account (HSA). You put money into this account to pay medical expenses, but you also receive a tax deduction for the money you put in. It's a way to get back some of your out-of-pocket costs on your medical bills. • Look into which of your retirement contributions are deductible. If your employer has a retirement plan in which they match a portion of your contribution, make sure you contribute at least enough to receive the matching funds. For other retirement savings, consider a traditional or Roth IRA. • If you are still paying off a student loan, the interest on this loan may be deductible. • If you have medical expenses that exceed 10 percent of your adjusted gross income, anything over that limit is deductible. Keep an eye on your medical expenses throughout the year, and if you're getting close to the 10 percent minimum, it can be worthwhile to spend money on elective medical expenses, like dental checkups, in the same year to boost you over that line and get a write-off. • The same is somewhat true of your employee business expenses. These are also deductible, but only the amount that exceeds 2 percent of your adjusted gross income. Knowledge is Power By knowing and understanding important tax laws and regulations, you can avoid some potentially huge mistakes that could cost you signifi cant amounts of money. One of the best ways to prevent these kinds of mistakes is to seek professional tax planning help. You need to develop a business relationship with someone who can be a tax planner beyond simply preparing tax returns. Set up a meeting to discuss your situation and fi nd out what you can do to minimize the tax you pay. Look for someone who knows your industry, or at least someone who knows small businesses. Tax-planning professionals have a wealth of knowledge and experience in tax planning, accounting, and consulting that will not only save you money once a year, but will also help you understand your numbers and keep more of your hard-earned money in your pocket. Larry Kopsa is a certifi ed public accountant and former salon owner who is now a partner of Kopsa Otte, the only CPA fi rm that specializes in salons and spas. He works with clients across the country, speaks at events worldwide, has written numerous articles, and has worked with Milady to develop fi nancial tools for salon and spa owners. Visit www.kopsaotte.com for more information. Editorial Note: The information provided here does not constitute accounting, fi nancial, legal, or tax advice, and is offered as an informational service only. Those seeking specifi c advice should contact a professional advisor. No liability whatsoever is assumed in connection with the use of this information. H&R Block o ers a discount to ABMP members. Log in to the member section at www.abmp.com and scroll down to "Discounts for Members." Knowledge = Power