The Massage Business Mama

  • About
  • Privacy Policy
  • Work with Me
  • Massage Techniques
  • Fresh Out Of School
  • Running A Practice
  • Kids and Careers
  • A Village of Resources
    • Mama Interviews
    • Book Reviews
    • Product Reviews
  • Podcast
    • Listent to Our Latest Podcast Episode

Podcast Episode 042: Choosing A Legal Entity for Your Massage Business

Fresh Out Of Massage School· Podcast· Running A Massage Therapy Practice

In this post: Choosing a legal entity for your massage business, is the topic of this episode of “Align with The Massage Business Mama,” we unpack one of the big struggles entrepreneurs experience when starting their business.

ALIGN WITH THE MASSAGE BUSINESS MAMA A PODCAST BRINGS YOU

Massage Podcast

EPISODE 042: Choosing A Legal Entity for Your Massage Business

One of the big things that trip people up at the beginning of their massage business is figuring out what legal entity to set up. Whether to be a sole proprietor, partnership, corporation, or LLC. C Corp, S corp, it can be overwhelming initially! 

One thing to note is if you take no action, the IRS automatically considers you a sole proprietorship. So, if you are struggling with paralysis analysis for how to structure your business. You have already inadvertently made a decision. By failing to make any official decisions or moves to create a business entity, you are operating as a sole proprietorship.

Listen on to hear more about the pros and cons of each entity.  

Sole Proprietorships

As a Sole Proprietor, you have to pay all the taxes that you might traditionally be used to an employer taking out of your checks already. You and your business are the same entity, so if you or your business were to be sued, everything that is yours (including house, savings, and personal assets), as well as all your business’s assets, would be at risk.

As a Sole proprietor, you can withdraw money from your business, but it isn’t considered a wage and can’t be deducted as a business expense. While you won’t pay payroll taxes on your draw, you do pay self-employment and income taxes. The business does not file taxes or pay income tax. 

Instead, you file a Schedule C with your 1040 form and pay personal income taxes on the profit. A Schedule C is where you list all your and your business’s profits and losses, and deductions for the year.

A sole proprietorship is the easiest to set up, but it doesn’t have any protections or tax benefits other entities do. If you go this route, you will want to consider setting up a DBA “doing business as.” 

Partnerships

A partnership behaves a whole lot like a sole proprietorship in its taxation. It’s two or more entities starting a business with a DBA, even if it’s their personal names.

With a Partnership, you file a Schedule K-1 (Form 1065). The partnership itself doesn’t pay taxes. Instead, each partner reports their profits and losses on their individual tax return. A schedule K-1 form reports each partner’s share of the partnership’s profit/losses etc. It is called a “pass-through” or “flow-through” entity when a business income is treated as personal income. A simple partnership has all of the qualities/risks and ease of a sole proprietorship.

LLCs

An LLC, or Limited Liability Company, is an entity that you, the owner, creates, controls, and operates. But it is a separate entity from you. Each state has its own statutes concerning LLCs, so if you go this route, make sure to check what that looks like in your area.

Here is a site that helps break down the requirements in each of the 50 US states.

LLCs have the most flexible taxation options. You can either be taxed as an S-Corp, C-Corp, partnership, or a sole proprietor. The default is sole proprietor taxation, but you can ELECT to be taxed as an S or C corp.

In this structure, you are not personally liable for the company’s debts or liabilities. This offers a certain level of security that is great in the massage industry.

Disclaimer: We are not lawyers or accountants. You may wish to consult with one before finalizing your legal entity decision. 

Listen here: 042: Choosing A Legal Entity for Your Massage Practice

If you have any questions or would like us to cover a specific topic on the podcast, please reach out! We love hearing from listeners! And are open to suggestions! So please, don’t be shy!

You also might like: Podcast Episode 012: Taxes for Massage Therapists

Podcast Episode 042 of "Align with The Massage Business Mama."

Sharing is caring!

11 shares
  • Share
  • Tweet
« Podcast Episode 041: How Ayurvedic Doshas Can Inform Your Bodywork
Podcast Episode 043: Attracting Versus Promoting Your Massage Practice »

The Massage Business Mama Shop

Learn about Our Courses and Coaching

Find Out What Type of a Massage Practice You Should Work In

Quiz for Massage Therapists

Quiz

Let’s Get Connected

  • Facebook
  • Instagram
  • Pinterest

Hi I'm Ali. A Massage Therapist - Business Owner - & Mama. Read More…

Categories

Recent Posts

  • Best Booking App for Massage Therapists in 2025
  • Podcast Episode 056: Massage Careers = Freedom, Flexibility, Fun & Financial Success with Krista Dicks
  • 6 Truths About Gift Certificate Sales in The Massage Industry
  • Podcast Episode 055: Peaks and Valleys in a Massage Business
  • Podcast Episode 054: This Massage Therapist Gets a Mortgage

Copyright © 2025 · Refined theme by Restored 316

This site uses cookies. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT
11 shares