Issue link: https://www.massageandbodyworkdigital.com/i/259468
I t p a y s t o b e A B M P C e r t i f i e d : 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 31 include chiropractors, doctors, estheticians, hair stylists, physical therapists, etc. I would start with my client list; maybe an accountant is among them. Or perhaps a client can refer you to one. Other research avenues could include your local Chamber of Commerce, small business development center, or other business organizations (Rotary, etc.). Also, you can search your state society of accountants. Do it like many clients find you—word of mouth. KC: If you'd like referrals for accountants from other therapists in your area, don't forget about your online community of therapists and bodyworkers at www.massageprofessionals.com. Les, Angela L. asks, "What percentage of a private practitioner's income should be saved to pay taxes without stress?" LS: Hmm … Angela, the fact that you have stipulated "without stress" makes this question extremely challenging! Everything is variable—including factors not directly related to your business, like whether you have a wealthy spouse, or four children, or donate heavily to charity. There are many factors that contribute to your tax responsibility. First and foremost is your income level. The United States has a progressive tax system—that means the more you make, the larger percentage you pay. If you will owe more than $1,000 in taxes (that will not be collected by withholding) during the year, you are obligated to pay quarterly estimated taxes. Uncle Sam wants to be paid during the year, not just at the end. How much you should pay quarterly again depends on your income level, as well as what you think your taxable income will be, meaning your income less your deductible expenses. Once you have an estimate of what your taxable income will be, you can determine your tax responsibility. There are several ways to do that—using the tax tables, calculators, and worksheets at www.irs.gov; using a tax planner; or using tax preparation software, such as TurboTax. It sounds a bit complicated, but it's not too bad. KC: Once you come up with an estimate of the amount you'll owe, put a percentage of every deposit aside so you're not scrambling to come up with your quarterly or annual payment the day before it's due. Some therapists employ the out-of-sight, out-of-mind method and open a separate account so they're not as tempted to spend that money. Here's a question that affects our readers who work for someone else. Marie C. asks, "As an employee, should I try to get as large a refund as I can?" LS: No. Absolutely not. And by that I mean no! Refunds feel good, and are better than owing, for sure, but the object of the game should be to get to zero. If you owe nothing, and receive nothing, that means you had the right amount of tax withheld. Don't let the government keep your money all year! You earned it—you keep it. Conversely, don't keep the government's money all year! You owe it; spread it out so April isn't too painful. KC: The key thing to remember is that taxes don't have to be intimidating or scary. They're just a regular part of running a business. Once you learn what to track and put a system in place to record the information throughout the year, it becomes just one more—very doable—part of being a business owner. LS: Agreed. Not a big deal. Just part of life. IRS Records? Now that's a big deal—R.E.M., The Go-Gos, The English Beat, Camper Van Beethoven … Les Sweeney is ABMP's president and resident blogger. Contact him at les@abmp.com and read his blog on www. abmp.com. Kristin Coverly, kristin@abmp.com, is an ABMP education facilitator who teaches workshops for therapists and instructors across the country. Both are massage therapists with business degrees who care about you and your practice. Want more? Check out their ABMP BizFit video tips on www.abmptv.com. Want more in-depth tax support? • Download the ABMP BizFit Taxes Toolkit on www.abmp.com/taxes. • H&R Block offers ABMP members a $15 discount at participating retail offices, 35% off of online tax prep, or 20% off of tax prep software. For more information, visit www.hrblock.com/offers/abmp.