NCBTMB Business and Legal Practices 3 — Questions and Answers
Question 1: When a massage therapist suspects a client is a victim of domestic abuse, they are ethically obligated to:
- Immediately contact law enforcement without client knowledge
- Document observations and provide resources while respecting client autonomy (Correct answer)
- Refuse to treat the client until they report the abuse
- Share the information with the client's emergency contact
Correct answer: Document observations and provide resources while respecting client autonomy
Ethical practice involves documenting concerns and offering support resources while honoring the client's right to self-determination unless mandatory reporting applies.
Question 2: Which tax form does an independent contractor massage therapist typically use to report self-employment income?
- W-2
- 1099-NEC (Correct answer)
- W-4
- 1040-EZ only
Correct answer: 1099-NEC
A 1099-NEC is issued by clients or businesses paying an independent contractor $600 or more for services.
Question 3: A client who paid for a massage package of 10 sessions wants a refund after using 3. How should this be handled?
- Refund the full package price regardless
- Follow the refund policy that was disclosed to the client at time of purchase (Correct answer)
- Refuse all refunds on prepaid packages
- Charge an additional administrative fee before issuing any refund
Correct answer: Follow the refund policy that was disclosed to the client at time of purchase
Adhering to the pre-disclosed refund policy is both legally sound and ethically appropriate.
Question 4: General liability insurance for a massage therapist primarily covers:
- Professional errors and negligent treatment
- Bodily injury or property damage occurring at the business premises (Correct answer)
- Lost income due to illness
- Malpractice claims from clients
Correct answer: Bodily injury or property damage occurring at the business premises
General liability insurance covers third-party claims of bodily injury or property damage, while professional liability covers negligent treatment.
Question 5: A non-compete agreement signed by a massage therapist when hired by a clinic would most likely restrict the therapist from:
- Obtaining additional certifications
- Opening a competing practice within a specified area and time period (Correct answer)
- Working part-time at an unrelated business
- Treating clients outside business hours
Correct answer: Opening a competing practice within a specified area and time period
Non-compete clauses typically prohibit working for competitors or opening a competing business within a defined geographic area and time frame.
Question 6: Which record must a massage therapist keep to substantiate business expenses for tax purposes?
- Client intake forms
- Receipts and itemized records of business expenditures (Correct answer)
- Session notes with treatment outcomes
- Appointment scheduling logs only
Correct answer: Receipts and itemized records of business expenditures
The IRS requires receipts and documentation of business expenses to substantiate deductions on tax returns.
Question 7: A massage therapist who operates from a home office can typically deduct what percentage of home expenses for tax purposes?
- 100% of all home expenses
- The percentage of the home exclusively and regularly used for business (Correct answer)
- A flat $5,000 standard deduction
- Nothing, because home offices are not deductible for sole proprietors
Correct answer: The percentage of the home exclusively and regularly used for business
The home office deduction is based on the proportion of the home used exclusively and regularly for business activities.
NCBTMB Business and Legal Practices 3
When a massage therapist suspects a client is a victim of domestic abuse, they are ethically obligated to: