Massage & Bodywork

March/April 2011

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visit abmp.com TAX TIME: STRESS LESS, PAY LESS Every year, as April 15 approaches, a lot of massage therapists find themselves feeling a mixture of dread and panic at the thought of filing their taxes. Fortunately, it really doesn't have to be that way. With a little organization, planning, and help from the right source, you can be ready for a stress-free tax experience. ORGANIZATION IS THE KEY If you're one of those people who saves every receipt and warranty card, and has a nice, neat file cabinet filled with carefully labeled folders, you're already ahead of the game. If you prefer dumping everything into a box or a drawer, you're still in the game. If you haven't been saving receipts or been diligent about keeping good financial records, it's time to revamp your habits to avoid the stress of tax-time disorganization, and ensure you're taking every allowable expense for your business. I keep one folder on my desk for unpaid bills; my file cabinet is organized with labeled hanging folders, and inside the hanging folder is a regular file folder for holding the receipts and invoices that have been paid, organized chronologically. On December 31, I just pull out all the file folders, store them in a labeled file box, and replace them with new file folders in my hanging file. It's an easy system. PLANNING AHEAD April 15 has been "tax day" since 1955. You know it's coming every year, so all it takes is for you to make up your mind to be prepared. Depending on the structure of your business, you may have deadlines to meet throughout the year, not just in April. Self- employed business owners, as well as those who work for someone else as an independent contractor, must pay self-employment tax, also known as quarterly estimated tax, every quarter. Filing dates for quarterly estimated taxes are April 15, June 15, September 15, and January 15 for the final payment of the preceding year. Paying your quarterly estimated tax is going to save you from the shock of finding out you owe a big tax bill at the end of the year. When taxes aren't automatically deducted from your paycheck, as they are for employees, it's easy to forget that all that money doesn't belong to you. SEEKING HELP The tax-paying public tends to head for the accountant's or tax preparer's office as April 15 draws near. In reality, the best time to have an appointment is before you go into business, or the beginning of a new year if you're already in business. A certified public accountant, or certified financial planner, can give you advice on the best type of business structure to choose for your particular business situation, offer guidance on how much money you should be setting aside for your taxes (and your retirement), clarify what your deductions are according to your employment circumstances, and advise you on getting your budget back on the right track if it has fallen off. DEDUCT, DEDUCT, DEDUCT! Most people are aware of the obvious deductions, like advertising, rent, and utilities. earn CE hours at your convenience: abmp's online education center, www.abmp.com 21

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