Massage Therapist Business Code for Tax and Filing Purposes
Learn how to choose the right NAICS code for your massage therapy business and understand its impact on taxes, filing requirements, and business classification.
Running a massage therapy business comes with tax and filing responsibilities that depend on its classification. The government categorizes businesses using specific codes, which affect taxes, regulations, and industry data collection. Choosing the correct classification ensures compliance and may impact financial obligations.
NAICS Codes for Massage Therapy
The North American Industry Classification System (NAICS) assigns codes to businesses for statistical and regulatory purposes. Massage therapy businesses fall under different codes depending on their services and business model. Selecting the right classification ensures accurate reporting and affects tax obligations.
Personal Care Services
Independent massage therapists and spa-based businesses typically fall under NAICS Code 812199, “Other Personal Care Services.” This includes wellness treatments that do not require medical licensing, such as relaxation massages, aromatherapy, and spa-based bodywork.
Businesses in this category are subject to self-employment taxes if operating as sole proprietors. Sales tax obligations vary by state—massage services are taxable in Texas and Hawaii but generally exempt in California unless combined with other taxable services. Proper classification helps businesses comply with state tax rules and avoid penalties.
Other Health Practitioners
Massage therapists providing therapeutic or rehabilitative services may be classified under NAICS Code 621399, “Offices of All Other Miscellaneous Health Practitioners.” This applies to businesses working with healthcare providers or offering treatment-based services, such as medical massage prescribed by a physician.
This classification may allow eligibility for healthcare-related tax deductions, including expenses for specialized equipment and continuing education. Businesses in this category may also need to comply with healthcare regulations, such as HIPAA, if handling medical records.
Additional Classifications
Massage therapy businesses offering broader wellness services, such as yoga, acupuncture, or physical therapy, may fall under NAICS Code 621310, “Offices of Chiropractors,” if affiliated with chiropractic care.
Mobile massage businesses may use NAICS Code 812990, “All Other Personal Services,” if they provide in-home or corporate massage services. These classifications impact tax treatment, deductible expenses, and local licensing requirements. Businesses should carefully evaluate their classification to ensure compliance and maximize tax benefits.
Business Structure Impact
How a massage therapy business is structured affects taxation, liability, and financial flexibility.
A sole proprietorship is the simplest structure, where business income is reported on the owner’s tax return. Profits are subject to 15.3% self-employment tax in 2024, but this structure offers no liability protection, meaning personal assets are at risk in lawsuits or debts.
A limited liability company (LLC) separates personal and business assets, reducing liability while allowing pass-through taxation. LLCs can deduct business expenses, such as equipment, rent, and professional development. Some states impose an annual LLC fee or franchise tax—California, for example, requires an $800 minimum annual tax.
An S corporation (S-corp) allows owners to take part of their income as a salary and the rest as distributions, which are not subject to self-employment tax. However, the IRS requires owner-employees to receive “reasonable compensation,” and failure to comply can trigger audits. S-corps also require more administrative upkeep, including payroll processing and corporate filings.
Filing Requirements
Massage therapy businesses must report income, claim deductions, and comply with federal, state, and local tax obligations.
The IRS requires businesses earning over $400 in net self-employment income to file a tax return, reporting earnings on Schedule C (Form 1040) and paying self-employment taxes through Schedule SE. Estimated quarterly tax payments are required if the business expects to owe at least $1,000 in taxes for the year, with due dates on April 15, June 15, September 15, and January 15 of the following year.
State and local tax requirements vary. Some states impose gross receipts taxes, which require businesses to pay a percentage of revenue regardless of profit. Local governments may require business licenses or occupational taxes, which can range from a flat annual fee to a percentage of earnings. Checking with state revenue departments ensures compliance.
Deductible Expenses
Deductions reduce taxable income and can include:
– Massage tables, oils, linens, and other supplies
– Continuing education and professional association dues
– Business insurance and liability coverage
– Rent for office space or home office deductions (if a dedicated workspace exists)
– Marketing and advertising costs
Home-based therapists may qualify for the home office deduction, which allows a portion of rent, utilities, and internet costs to be deducted. Keeping detailed records and maintaining receipts for at least three years helps in case of an IRS audit.