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Employment

Massage Therapist Credits and Deductions

As a massage therapist, you may receive Form W-2, Wage and Tax Statement, if you work for someone. As an employee, you may receive additional income in the form of tips. Any tips you reported to your employer are included with your wages on your Form W-2, in Box 1. Any tips not reported to your employer must be reported on your tax return.

Although you are not required to report tips of less than $20 per month to each employer, these tips are still subject to income tax. You must also include in income the value of non-cash tips such as tickets and passes and any other tips received but not reported.

If you rent space in a business, work from home, or travel to your clients, you may be considered self-employed. Self-employed taxpayers report all of their income, including tips, on Schedule C, Profit or Loss from Business.

Self-employed workers can reduce their taxes by claiming business expenses on Schedule C. You should keep receipts and records to substantiate these expenses. Examples of some of the items you may be able to deduct include:

  • Fees for occupational taxes or licenses

  • Subscriptions to professional journals and trade magazines related to your work

  • Supplies such as massage chairs, massage tables, towels, and linen

  • Liability or other business insurance such as malpractice or a safety bond

  • Expenses for an in-home office

  • Rent for a booth or storefront

  • Cost of continuing education needed to maintain your license

  • Professional fees such as bookkeeping and legal fees

  • Bank fees

  • Depreciation for assets such as massage chairs, massage tables, etc.

  • Employee wages and benefits

  • Employer share of Medicare and social security taxes and unemployment insurance

You also may be able to deduct work-related, educational courses or seminars if they meet certain requirements. Education typically meeting the requirements includes refresher courses and courses on current developments. Costs including travel to courses or seminars on the latest massage techniques, for example, would qualify. However, education that qualifies you for a new trade or business, or that helps you to meet the original minimum education requirements to become licensed are not deductible as a business expense.

Under tax reform, employees are no longer able to deduct unreimbursed related expenses.