Top Tax Deductions for Self-Employed Healers, Coaches and Spiritual Entrepreneurs
Before we get into the top tax deductions for the healers, coaches and holistic practitioners of the world, I want to extend a huge heartfelt THANK YOU! We need each and every one of you! And I bet you don’t hear that enough, at least not when we are speaking in the realm of taxes and Uncle Sam.
The following is a list of expenses most self-employed businesses incur which also constitute tax deductions. The best way to ensure you receive full tax deductions is to have a system in place to track these expenses or else you are weeding through piles of receipts, emails, bank statements, payment processor statements, and credit card bills at tax time, and you are bound to miss something.
The optimal solution is to have a software application that automates the cash flowing in and out of your business, such as QuickBooks, which can help you track and organize your business finances. If you are not yet ready to make that investment, I recommend, at a minimum, tracking all of your business spending in excel spreadsheets or google sheets so the information is readily available come tax time.
Please note that some of these deductions are subject to thresholds and each tax situation is unique so consult a tax professional before filing. Likewise, any software you use to prepare your taxes such as Turbo Tax will auto-calculate the thresholds for these deductions as well.
The purpose of this post is to prompt some action around tracking items that you are currently paying for in your business but might not realize could qualify for tax deductibles which translates into paying fewer tax dollars.
Home Office and Equipment: If your space fits these prerequisites: “regular and exclusive use” and “principal place of business," you can claim a Space Deduction (standard or calculated based on sq ft). You can also claim all equipment, furniture and fixtures (laptops, printers, desk, chair, lamp, etc) and supplies (paper, planners, pens, staplers, file folders, etc).
Tools Used in Client Sessions: Any tools used as an integral part of your practice in client sessions including biomats, tuning forks, ceremonial supplies, crystal bowls, candles, pendulums, drums, massage tables, all of the tools you use to work with your clients.
Technology and Software Tools: Any and all fees paid to support your online presence, business website design, creation and hosting, domain name fees, software: (QuickBooks, Acuity, Calendly, Microsoft Office, Virus protection, TurboTax, are just a few), marketing and advertising of your business, phone, internet, zoom fees, etc.
Payment Processor transactions fees, banking fees, interest: PayPal, Square, Stripe or other payment processor transaction fees, credit card interest on business cards used for business purchases, bank fees on bank accounts for business accounts, interest paid on business loans
Continuing Education/ Skillset Expansion: Any education you invest in that will “maintain or improve skills to do your work” such as business coaching, conferences, self-study online courses, skill-enhancing retreats, schools and courses (disclaimer: “a program of study that qualifies you for a new trade or business” is not deductible)
Legal and Accounting fees: Legal and accounting fees to set-up business structure (one-time start-up fees), ongoing tax preparation, bookkeeping or tax planning fees, business licenses, permits, etc.
Travel and Mileage: Keep a log of your mileage driving to and from client sessions, to and from retreats, to and from the post office to ship goods, everywhere you drive to support your business using your own vehicle. (You can calculate or use a standard deduction). Travel in the form of airfare, hotel, care rental, etc. is deductible if solely used for business travel.
Health Insurance Premiums: Premiums paid for as an self-employed business owner (premiums paid under your spouse’s employer plan do not count)
Subscriptions and Memberships: All magazines, journals, memberships for certifications, group coaching memberships, etc.
Self-employment taxes: the employer portion (7.65%) of the self-employment taxes paid
Meals: keep track of all of your receipts, who you were with, and the purpose of the occasion
Retirement Plan Contributions: Contributions to self-employed retirement plans (not an employer plan)
This links contains a good article on this topic which expands on these deductions in more detail:
15 Tax Deductions and Benefits for the Self-Employed (investopedia.com)
If this is overwhelming, ask for help! Again, you don’t have to know how to calculate or file any of this on your own. The purpose of this blog is to activate your left-brain in thinking, what applies to me? and if it does, what is the best way for me to track these expenses so I can be assured to receive full tax deductions?
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