Tax Season Tips for Practitioners and Coaches

As tax season approaches, business owners find themselves immersed in the annual ritual of financial preparation. For those in the health and wellness industry, managing taxes can present unique challenges and opportunities. Whether you're a holistic health practitioner, yoga studio owner or a coach, here are five tips to help you navigate tax season smoothly and maximize your returns:

1. Separate business and personal expenses:

Open a separate bank account(s) and credit card(s) for your business. Separating your business from personal expenses not only simplifies tax preparation, but also helps you accurately track deductible business expenses and avoid potential IRS scrutiny.

2. Maintain accurate financial statements throughout the year:

Learn how to use accounting software or enlist the help of a professional bookkeeper to keep your financial records organized and up to date. Tax preparation will be more efficient if you begin with an accurate record of all income and expenses throughout the year, including client billings, bank statements and categorized expenses.

3. Maximize retirement contributions:

Contributing to a retirement savings plan helps secure your financial future and provides tax benefits for your business. You can set up a retirement account, such as a Simplified Employee Pension (SEP) IRA or a 401(k), which allows for tax-deductible contributions, reducing your taxable income for the year. 

4. Seek professional tax assistance:

While it's possible to handle your business taxes independently, I recommend seeking a tax advisor to save you time and help you maximize your tax savings. For example, a CPA who specializes in tax preparation can help you understand tax deductions and credits, stay informed about tax law changes and plan for estimated taxes. For example, specific health-related expenses, such as equipment purchases, medical supplies, certifications and insurance may be eligible for tax deductions. 

5. Plan for next year:

Use this tax season as an opportunity to review your business's financial performance and implement strategies to improve tax efficiency for the upcoming year. Consider hiring support and implementing systems or software to streamline record-keeping, track expenses more efficiently, and better prepare for next year's tax obligations.

By following these financial tips and seeking professional guidance when needed, you can navigate tax season with confidence and focus on growing your business and serving your clients effectively.