Tax Write-offs

topic posted Fri, February 8, 2008 - 7:26 PM by  Molly
Does anyone know the going rate on mileage for tax write-offs?
I always write off my supplies and such....does anyone know any creative massage write-offs?
Any way to write off electricity? It sure takes a lot of heat to do massage.....
posted by:
SF Bay Area
  • In 2007 the rate was .485 cents per mile.

    It has gone up for 2008, you can check on the IRS website at:

    then do a search for 2008 mileage rate

    Your electricity is deductible, how are you set up? Are you in a home massage office or do you rent? If you rent a space for massage, all your utilities are deductible. If you're in a home massage office a portion relative to the square footage is deductible.

    Of course any education you take is deductible. When you say creative? Anything in particular you're thinking of?

    FYI - I'm an accountant fulltime at a CPA firm with a massage license on the side. Haven't gotten the massage practice going yet, I'm too busy teaching Middle Eastern belly dance parttime!!!!!!!!!!

  • Unsu...
    I went to the body worlds exhibit in San Jose and wrote that off.
    Make sure to write off tolls if you have to go across Bay Bridges.
    Half of business meals if you are discussing massage business or planning workshops with other therapists.
    Write off laundry if you pay with quarters.
    Insurance if you are an AMTA ABMP.
    Creative massage write offs kind of sounds like creative accounting which is a euphemism for cheating on taxes which is easy enough to do in a cash business.
    • Hi Zeke,

      I think they're enough deductibles you can write off with out being "creative" aka cheating. :)

      I have tons of stuff to write off for belly dance... music, instructional dvds, mp3 player & speaker, publications, workshops, mileage to workshops, hotel at workshops, and a percentage of meals at a workshop. Then I have liability insurance for teaching dance, the rent I pay on space, etc.

      My accountant side speaking. :)
      • By "creative" I just mean things that aren't obvious, that we may not have thought of. I'll have to figure out the square footage on electricity thing....does this only work in a space where it's legal to do massage from home? In SF, I have an "outcall" license and did "outcall" from my home for a while in a loophole of the law, as recommended by my massage school teachers.
        Thanks for the ideas! Writing off CDs is a good one.
        Also- I bought a bunch of equipment off of craigslist and have no receipt. Can I still write it off?
        Bridge toll, that's a good one!
        Stereo equipment is brilliant as well. What a great reason to upgrade!
        Do courses count if you're not given ECUs for taking them? (Like small, private workshops?)
        Thanks so much for the advice! 2007 was my first year as a therapist and I feel a little lost....
        perhaps I should find an accountant looking for a massage!
        • I don't think that the IRS has time to check locality law to see if massage is "legal" in the home. When you did outcall did you keep up with your mileage? If not, I go on mapquest, put in my address and the address where I went and get the mileage.

          Also, do you wash your linens at home? Think percentage of your laundry costs, cost of any special detergents for linens that you wouldn't normally purchase such as those that remove oil from your sheets.

          When you purchased off of craigslist did you pay with a check? That is certainly deductible.
          Even if you don't get continuing education and the courses were to further your education in massage I would say write them off as education expense. As long as you have proof of paying for them, cancelled check, etc.
  • It has been my experience that taking an in-home deduction can be Difficult, and subject to all sorts of review and problems.

    I do not know how critical it is to incorporate (or get an llc or whatever), but I do believe that it is far better to pay "commercially reasonable rent" and include utilities, etc., even if the business is effectively sub-letting space in a home. If this level of rent is in excess of the actual rental expense, the "profit" is taxable income, but one does not pay SSN taxes on those gains, so there is a tradeoff to consider.

    I am also very happy to pay an accountant to handle my taxes, and while 20 years ago ideas like these were not well-known, in the interim I have found that accountants do know about lots of these things, and I'm perfectly happy to pay them to sign their name as paid preparers, so if there ever is a question or an audit, it's *their* problem, not mine.

    • Unsu...
      Accountants are so valuable. I love mine. One of the reasons I am in massage is I do not get along with numbers and paperwork. Mine is awesome she used to be a forensic accountant with the IRS so she really knows whats works for a deduction and what does not. I am responsible for bringing deduction ideas to her and she gives me the scoop. If i present my receipts it is 2 billable hours a year---I would spend 20 hours pulling my hair out and still get the numbers wrong--when my accountant was viewing my IRS file she found that one year I filed on a form that was totally not the form that I should have filed on because I had just gone down to the post office and plucked one off the wall--as I was saying I do not know what I would do without my accountant
      • also i would like to note that i always make sure to include the use of m y vehicle which transports me to massage clients, including jobs where you are independent contractor.
        also make sure to remember how much you spent on office supplies, cleaning supplies, music, lightbulbs, clothing for work, anything...
        • Self employed folks can also deduct:
          postage, advertising, printing costs, books and trade publications, classes and communication systems i.e. pager, DSL, business use of homephone etc.

          I also get receipts for all my donations to Goodwill or public libraries.
  • Just saw in another post mention of a website, of course that is a writeoff.
    • ah yes and cell phone costs that are "directly" related to your business operations are also an office expense in my book
      • Unsu...
        I know that is a tough one. i charge of 100 monthly because my bill is a bit higher (120-160) but a large proportion of the minutes are family and friends and I have roaming because I work in many places. It seems like a reasonable write off and compromise. . .
  • First of all, if you are taking the actual mileage rate, you are probably short changing yourself. IRS bases their mileage rates on a vehicle the size of a Ford Focus. If you have anything bigger, your deduction would probably be higher for taking the actual expense deduction instead of the standard mileage. If you have a work space at home, you are entitled to the "home office" deduction. You can not only take a partial writeoff of electricity, but water, mortgage interest (or rent), other utilities, repairs, etc. Actually, there are dozens of write-offs that most self-employed individuals can take, but do not know about them. (p.s. - I am not guessing at this ... I do a significant amount of tax work, and am writing a book on tax deductions for self employed people.)

    Did you know that for every dollar you deduct, you are saving about 45 cents in taxes?

  • How about writing off massages for yourself? Not sure where to put it or if it's even a valid expense. An accountant told me to call it personal maintenance. Another therapist said she says it's Research. I guess I just am wondering what the consensus on this is, if anyone else has claimed massages for themself as a write off in their business as a massage therapist, and what to call it, etc.. thanks!
    • If people (the public in general) could write off massages as "personal maintenance" on their tax returns, don't you think we'd get a LOT more clients?

      Guess we should write off our haircuts, pedicures and such too.
      Personal maintenance.

      Writing this as an accountant who works for a CPA and a CMT.
      • "If people (the public in general) could write off massages as "personal maintenance" on their tax returns, don't you think we'd get a LOT more clients? "

        This is true, but for a CMT it is professional maintenance. Athletes deduct this as a business expense as well.

        • Unsu...
          the cosmetic dentist I do marketing for writes off weekly massage as maintenance, or something like that. She spends so much of her professional time hunched over, using her hands, that I can certainly see the value in getting massage in allowing her to work effectively.

          I used to work in pro hockey, and I know they all have personal trainers and massage therapists, apart from what the team offers. When you engage in a profession where you use your body, there is some allowance for taking care of your body.

          There is a *huge* difference in a massage therapist or athlete getting a bodywork treatment for wellness than in getting a pedicure.
  • I was told getting a massage or any spa experience can be used as a "research and/or training" tax write off. For instance, I wanted to know how an herbal body wrap is done so I can offer it at my spa. I ordered the products and video on the subject, but wanted to get hands on experience. So I paid to have one done on me. I consider this expense as "research and training" necessary to enhance my business.

    My question is for those who are Holistic Health Practitioners. Can the purchase of herbs be taken as a tax write off?
    • "My question is for those who are Holistic Health Practitioners. Can the purchase of herbs be taken as a tax write off? "

      Certainly if these are used in your practice. A little dicier if you are researching the use on yourself. You could probably support the deduction of samples, but continued use would seem to be a personal expense.
  • I would love a good format for categories to give to my accountant..
    Can I write off my gym membership??
    • My initial reaction is probably not. Chat with your accountant about it as he will know your situation better. Hard to separate the personal expense from the business need to stay fit.

      For some there is opportunity to deduct as a medical expense, but that is a very narrown window and must be recommended by a physician, and so on.
      • so this question might sound a bit ignorant, but bear with me

        who is to know if you are using these things for your business or otherwise.
        the usual answer i get is *unless you get audited*
        so how often does it happen for those of us who arent making tons of money
        keeping impeccable tax records is not one of my strong points,
        how stringent do you really need to be, i get lots of mixed answers.
        i mean, when you work independently as a therapist, your life becomes your practice.
        constant "business meetings", travel related, and self-care related to your "business equipment' (the body and mind)
        it seems like grey grey grey area to me.
        • Unsu...
          filing and keeping records can bring a lot more clarity. I am ADD and have an open prescription for life long ritalin so I can say too that filing is not my strong point either. But I got an accordion folder from Longs Drugs and labeled it with things like 'verizon' 'tolls' 'parking'. And I use that little part of me that is OCD to put the toll receipt from my outcall into the folder before i sleep, the receipt for oil in my glove box and clean my glove box once a week--- also you can use a credit card to make business related purchases this will be great for a reference for you, and heaven forbid the feds if you face an audit---
          • Unsu...
            Every single thing related to your practice can be written off. Such as oils, pens, paper, music, linens, traveling, products, herbs, business cards, calendars, heat, electricity, rent etc. Anything you can find related. My tax person rocks. When I moved to Cali and back she wrote that off. I traveled out there for work but for only a month. She keeps what I owe done to a bare minimum.
        • "the usual answer i get is *unless you get audited*
          so how often does it happen for those of us who arent making tons of money"

          Generally less than 1% of returns for incomes under $100,000 are audited. Making more than that will bring it up to 1.5%

          Home office deduction or anything well over the average deduction will increase those odds.

          The bottom line is that it is unlikely that you will be audited. It will be painful if you are and you have not substantiated your positions/deductions. I always recommend not taking a deduction that you are not willing to discuss. Make notes and stick them in your binder like Zeke. Keep a log of travel. Add notes to receipts. You may lose something on audit, but you should be able to avoid most penalties by taking reasonable positions.

          Just some random thoughts. I hope it helps.
          • What about donations? I've given gift certificates for massages for charity events. Can those be written off, too?
            • I'd say a grey area. It could certainly be argued that any donation would be a personal expense. Still deductible, but subject to limitations.
              • Unsu...
                Good question...Zeke we need you on this one.
                • Unsu...
                  Man I write off clothes I use, hair accesories to tie my hair back with, sage , incense, books, cd's, my singing bowl, candles, decorations, my space heater, shit loads of things....
                  • This is the maximum depth. Additional responses will not be threaded.
                    Oh yea don't forget to write off continuing education classes and those traveling expenses. I read earlier about massage for yourself. Why not say you got a treatment to experience it for yourself as education to implement it into your practice?
                    • When I was in Massage school we were told that massage therapy is an allowable deduction under, "education expenses" for Massage Therapists. no need to figure out a way to use it as a deduction. It already is.
                      • Unsu...
                        That makes sense. . I learn the most from getting massages. . .but do you care to untangle what is up thread about barter counting as taxable. . . in other words if you trade a massage and create value for barter is that a write off?
                        • Or even better- can it be a charitable donation? if you volunteer hours for AIDS patients or some such, are those hours deductable in terms of dollar hours?
                          • It's pretty hard to pick up a deduction that way.

                            In Zeke's example. If you correctly took barter income into account, you could deduct the correseponding value received. If you are not accounting for barter in your returns I would shy away from this.

                            The charitable donation route will not get you a deduction. Services (even if billable under normal circumstances) are not deductuble. Although out of pocket expenses incurred in connection with the donation may be.
                            • lea
                              offline 5
                              Just wondering to follow up on comments of deducting cell phone cell phone is my only phone, so i use it for more than just work, but I got it mainly because of working in massage. What percentage is 'ok' to deduct? Thanks for the great insights here on this thread..
                              • lea
                                offline 5
                                also, another thought...i commute by bike...any ideas on whether there's some way of deducting mileage for that form of transportation? maintenance at least? thanks
                              • You can probably deduct only a percent of your phone. Since you only have one phone for work and business, question is if you have massage as your sole income or do you have some other occupation? Also, do you work at a rented studio or at home. If at home, there is a percent that is calculated for in home business. That same percent is used for your phone, this is my understanding from my accountant.

                                Another words, if you only do 100% massage as your income then you would take 50% of the phone bill per month towards business.
                                • Unsu...
                                  The way that I deal with my phone is I set my plan up for a time that I was working all over the west. I got a cell phone for my business. Previously I had a land line and a pager but realized that if clients could talk to me directly I had a better chance of setting up an appointment. Under my current plan I get 1,300 minutes roaming for 100 dollars base price before taxes so that is my deduction. I deduct 1,200 a year on my phone. If I was not a massage therapist I doubt I would have a cell phone. However the bill comes out to closer to 2,000 a year with international txts taxes and all of the other good stuff that cell phone companies attach to bills. To me this seems like a fair deduction and I would be happy to defend it in an audit. There is no exact science as far as deductions go and from people who I know who have undergone audits the IRS is agressive and at the same time reasonable if you make an effort to be honest.
                                  • lea
                                    offline 5
                                    thanks for the bill's pretty low so i'm sure it's not going to raise any questions...great to have this resource!
                                    • Technically you should have a business line to deduct it. I've seen people take percentages, but if it were ever put under the microscope the service could take that away.

                                      Commuting expenses are not deductible. Be it bike, car, train, or bus. Your commute is from your home (or other location) and business travel is from business location to business location.

                                      Say you work at a spa. Travel to and from the spa would not be deductible. Once at the spa, if you were sent to a hotel to do a treatment. This travel would be deductible.
                                      • Unsu...
                                        That is kind of my point. . . I would not have a cell phone if I was not a massage therapist. In fact I initially bought a cell phone because I was one. So is that a business line? Even though I now talk to my father, brother, wife and friends on the same line that I take business calls? In order for something to be a business line must one never take a personal call on it? I do not think any phone in America would then be deductible. . . what is your opinion of that---
                                        • Minimal personal use is ok.

                                          If you have a land line that is used for the majority of your personal calls you should be fine. If you dropped your land line when you added the cell then it is not a business line.
                                          • OK- here's a question on the commuter miles. I work from a number of different locations- including substitute teaching at different schools and different spas. All of the spas have me listed as being a "contractor" where I get 1099 forms and they take no taxes out. Because of this lifestyle, I have to pay for "business use" of my car on my auto insurance. Can I then deduct the miles as well? How different is it from doing "outcall" to different spas then doing "outcall" to different houses?
                                            • Do you receive a 1099 for teaching? Travel from business to business is deductible. I would take miles from spa to spa. Outcalls would not really be any different. It seems crazy, but travel from outcall to outcall would be deductible, but not travel from home to the first outcall or the return home from the last.

                                              Other details factor in, but this is generally how it works.
                                              • No, the teaching takes taxes out, but that's the reason why I have to list my car as "business use" on my insurance, since I have no set work place. You can't deduct the first and last outcall? That's kinda crazy, huh?
                                                • "No, the teaching takes taxes out, but that's the reason why I have to list my car as "business use" on my insurance, since I have no set work place. You can't deduct the first and last outcall? That's kinda crazy, huh?"

                                                  It is kind of crazy.

                                                  There are different rules for w-2 income and 1099/SE income. If you are itemizing you may be able to take this as a business expense. Still subject to the 2% floor and so on.

                                                  Expenses connected to a massage practice (schedule C) is a direct deduction against related income.

                                                  It sounds like you really need a tax walk through. It's good to plan these expenses and learn the right type of documentation. I highly recommend the teleconference with Ken and/or have a sit down with an accountant.
                  • This is the maximum depth. Additional responses will not be threaded.
                    I do seminars for independent contractors and other small business owners. Usually for real estate agents, but the massage business could be similar. Maybe I should do one for massage therapists. I guarantee that many of you are loosing money in taxes. For example, if you do not have a regular office/studio somewhere, your home is your office. Your commute is from the coffee pot to the front door. From that point on, it is business. Even if you do have another location that you need to commute to, you can make stops on the way. Then your work travel begins at the first stop, even if it is only a couple of blocks away. Let me know if anyone would like a teleseminar.

                    • I would LOVE a teleseminar. Weekday mornings (10-12) are best for me. Anyone else? This is my first year in massage, and I KNOW I lost money in taxes last year. I'm trying not to make the same mistakes twice!
                      • One item to consider with the home office is that you need a dedicated room that you are performing massage in to qualify for the home office deduction.

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