Massage therapists deal with income from multiple sources. Credit card payments, cash, tips, and sometimes gift certificate redemptions all need to be tracked. Cash payments that don’t get recorded are still taxable income, and missing them creates problems with the IRS.

Open a separate business bank account and deposit all income there. Even cash tips should be deposited so your books reflect actual revenue. Mixing personal and business money makes tracking nearly impossible and creates headaches when it’s time to reconcile your accounts.

For income tracking, record each payment as it happens. If you use scheduling software like MassageBook, Square, or Jane App, most of these track payments automatically. Cash payments need manual entry. Note the date, amount, and whether it includes a tip. Tips are taxable income and need to be tracked separately for reporting purposes.

Common expenses for massage therapists include supplies like oils, lotions, and linens. Equipment purchases like massage tables, bolsters, and hot stones are typically deductible. Rent or treatment room lease payments, licensing fees, continuing education, liability insurance, and marketing costs all count as business expenses. Many health and wellness businesses miss deductions because they don’t categorize purchases properly from the start.

Capture receipts digitally using your phone. Apps like Dext work well, or even a photos folder organized by month. Paper receipts fade and get lost in your treatment room or car. Digital copies are searchable and last longer.

Reconcile your accounts weekly instead of waiting until month end. Weekly reconciliation catches errors while you still remember what happened. Did that Amazon charge go to business supplies or personal use? You’ll know if you look at it within a few days instead of months later.

If you work from a home studio, track home office expenses carefully. You can deduct a portion of rent, utilities, and internet based on the square footage used exclusively for business. This requires documentation and consistency to hold up if you’re ever audited.

The goal of tracking isn’t just tax compliance. It’s knowing whether your business is actually profitable and where your money is going. A bookkeeping service in Macomb can help you set up systems that make tracking easier and give you useful numbers to manage your practice.