Woops!

This past weekend I attended the "Taxes & Bookkeeping for the Healing Arts Professional" workshop. For the 4th time. I should have this stuff down cold by now, right?
 

Wrong. It's taxes. It's bookkeeping. It's constantly changing. I haven't mastered it. Not by a long shot.

 

IN FACT, some of the things I've told you about in this blog I've been wrong about. Yowza, that stings! But let's see if I can't set the record straight on a few things.

 

Per diems: yes, they are still a fully legal way to take a deduction for business travel. The per diem rates still have two primary parts: meals and lodging. Everyone has the option of taking the per diem for food. However, only those therapists who are incorporated as an S Corp or a C Corp can use the lodging per diem. That means if you are a sole practitioner or an LLC (and those two probably account for 98% of the MTs I know), you can't take advantage of the per diem for lodging; you have to use the actual costs.

Serious bummer for me!

 

Cell Phone: if you assign percentages for use (personal vs. business) and apply that to your bill, you can deduct your cell phone (at the percentage you've decided is business). You don't need to account for every call but you also can't deduct it at 100%.

 

Home Office / Home Use: you can take a deduction whether you rent or own. As long as you can show the area you are calling your "home office" is used exclusively for business, it's a home office. You do not have to practice massage there. It can be as small as a corner of your living room.

 

1099s:  if you pay more than $600 in a year to a person or organization for business purposes and you plan to take that expense as a deduction, you need to provide that person / organization a 1099. If the person/organization is a corporation (other than LLC) or a non-profit, you don't have to send them one. Use the W9 form to collect the information you need for the 1099. You have to mail out 1099s by the end of January for the previous year.

Gift Certificates: cannot have expiration dates, though you are allowed to collect additional money if you have raised your rates since they GC was purchased. You need to keep track of GCs separately in your books in case you sell your practice (they are considered outstanding obligations and the purchaser needs to know about them).