For your normal $75 massage session with a $15 senior discount and a tip of $5, you can include discount payments in your statement of income by: simply entering the amount of money you earned as income entering the amount paid and the tip on two separate lines entering usual charge, discount, tip and money received all on separate lines all of the above the first and second choices If you trade a series of massages with an accountant who does your business taxes and general bookkeeping the IRS requires: that you claim the massage sessions as income but can claim the bookkeeping services as deductions that you do not have to claim the massages as income or the bookkeeping as deductions because they "wash each other out" that you claim the massage sessions as income but you cannot claim the bookkeeping as a deduction because income tax filing is a personal service all of the above the first and second choices Accurate record keeping is most important for a massage therapy business organized as: Single-Member LLC S and C corporations Sole proprietorship all of the above the first and second choices To decrease the chances of an IRS audit