Tarot Legal Considerations

BY NICOLE LAU

Introduction: Protecting Your Practice

Legal considerations aren't the most exciting part of running a tarot business, but they're essential. Proper legal setup protects you from liability, establishes professional credibility, ensures tax compliance, and creates clear boundaries with clients. Ignoring legal basics can lead to lawsuits, tax problems, and business complications that could have been easily prevented.

The good news: you don't need a law degree to protect yourself legally. Understanding basic business structure, using proper disclaimers, having clear contracts, and following simple legal guidelines creates a solid foundation for your practice.

This guide covers essential legal considerations for tarot readers—from business structure to disclaimers, liability protection to contracts, taxes to local regulations. While this provides general guidance, always consult with a lawyer or accountant for advice specific to your situation and location.

Disclaimer: This article provides general information, not legal advice. Laws vary by location. Consult with a qualified attorney for legal guidance specific to your situation.

Business Structure

Sole Proprietorship

What It Is: You and your business are legally the same entity. Simplest structure.

Pros:
- Easy to set up (often just need business license)
- Minimal paperwork
- Complete control
- Simple taxes (report on personal return)

Cons:
- No liability protection (personal assets at risk)
- Harder to get business loans
- Business ends if you die or become incapacitated

Best For: Starting out, testing the waters, low-risk practice

LLC (Limited Liability Company)

What It Is: Separate legal entity that protects personal assets from business liability.

Pros:
- Liability protection (personal assets protected)
- Professional credibility
- Flexible tax options
- Easier to get business credit

Cons:
- More expensive to set up ($100-500)
- Annual fees and paperwork
- More complex taxes
- State-specific requirements

Best For: Established practice, higher income, wanting liability protection

Corporation (S-Corp or C-Corp)

What It Is: Separate legal entity with shareholders, board, formal structure.

Pros:
- Maximum liability protection
- Tax benefits (S-Corp)
- Easier to raise capital
- Perpetual existence

Cons:
- Complex and expensive to set up
- Significant ongoing compliance
- Double taxation (C-Corp)
- Overkill for most solo readers

Best For: Large operations, multiple employees, significant revenue

Recommendation

Starting Out: Sole proprietorship is fine
Once Established: Form an LLC for protection
Scaling Significantly: Consider S-Corp for tax benefits

Essential Legal Documents

Terms of Service

What It Is: Agreement clients accept when booking

Should Include:
- Services provided
- Payment terms
- Cancellation/refund policy
- Disclaimer about tarot being for entertainment/guidance
- Confidentiality terms
- Limitation of liability
- Dispute resolution process

Where to Use: Website, booking confirmation, intake forms

Disclaimer

Purpose: Protect yourself from liability claims

Standard Tarot Disclaimer:
"Tarot readings are for entertainment and spiritual guidance purposes only. I am not a licensed therapist, doctor, lawyer, or financial advisor. Tarot readings should not replace professional advice for medical, legal, financial, or mental health concerns. You are responsible for your own decisions and actions. By booking a reading, you acknowledge that you understand and accept these terms."

Where to Display:
- Website footer
- Booking page
- Confirmation emails
- Before each reading (verbal or written)

Client Intake Form

Purpose: Gather information and establish agreement

Should Include:
- Name and contact information
- Question or focus for reading
- Acknowledgment of terms of service
- Acknowledgment of disclaimer
- Consent to record (if applicable)
- Age verification (18+)

Contracts for Larger Services

When to Use: Workshops, events, ongoing services, collaborations

Should Include:
- Scope of services
- Payment terms and schedule
- Cancellation terms
- Intellectual property rights
- Liability limitations
- Signatures and dates

Liability Protection

Why You Need Protection

Clients can sue for anything (even if baseless):
- Claiming your reading caused harm
- Injury at your location
- Breach of confidentiality
- Discrimination claims
- Copyright infringement

Protection prevents financial ruin from lawsuits.

Business Insurance

General Liability Insurance:
- Covers: Bodily injury, property damage at your location
- Cost: $300-600/year
- Recommended: Yes, especially if clients visit your space

Professional Liability Insurance (E&O):
- Covers: Claims of professional negligence, errors, omissions
- Cost: $200-500/year
- Recommended: Yes, if reading professionally full-time

Where to Get: NEXT Insurance, Hiscox, The Hartford, State Farm

LLC Protection

Forming an LLC separates personal and business assets. If sued, they can only go after business assets, not your house, car, personal savings.

Important: LLC only protects if you maintain separation (separate bank account, proper documentation).

Proper Documentation

Keep Records:
- Client agreements and intake forms
- Payment records
- Communication with clients
- Any incidents or concerns

Documentation protects you if disputes arise.

Specific Legal Issues

"For Entertainment Purposes Only"

Why It's Used: Legal protection. Tarot isn't regulated like medical or legal professions. This disclaimer protects you from liability.

Does It Devalue Your Work? Some readers worry it undermines credibility. But it's standard legal protection, like "past performance doesn't guarantee future results" for financial advisors.

How to Frame It: "Tarot readings are for entertainment and spiritual guidance purposes" sounds better than just "entertainment."

Reading for Minors

Legal Risk: Minors can't enter binding contracts. Parents could claim you harmed their child.

Best Practice:
- Require parental consent for anyone under 18
- Get written permission from parent/guardian
- Or simply don't read for minors (safest option)

Medical, Legal, Financial Advice

Never:
- Diagnose medical conditions
- Prescribe treatments
- Give legal advice
- Provide financial advice (unless licensed)

Why: Practicing without a license is illegal and opens you to massive liability.

Instead: "The cards suggest [insight], but please consult a [doctor/lawyer/financial advisor] for professional guidance."

Predicting Death or Disaster

Don't Do It: Even if you think you see it, don't predict death, serious illness, or disaster.

Why: Could cause psychological harm, create liability, and is ethically questionable.

Legal Risk: If someone acts on your prediction (or fails to act) and harm results, you could be liable.

Recording Sessions

Get Consent: Always ask permission before recording.

Two-Party Consent States: Some states require both parties to consent to recording. Know your state's laws.

Best Practice: Get written consent in intake form or verbal consent at start of recording.

Client Confidentiality

Protect Privacy: Don't share client information without permission.

Testimonials: Get written permission before using client testimonials or stories.

Social Media: Don't post about specific readings without explicit consent.

Exception: If client reveals intent to harm self or others, you may need to break confidentiality (consult lawyer).

Taxes and Financial Compliance

You Must Pay Taxes

Income Tax: Report all income, even cash payments
Self-Employment Tax: 15.3% for Social Security and Medicare
State/Local Tax: Varies by location
Sales Tax: Some states tax services (check your state)

What You Can Deduct

Business Expenses:
- Tarot decks and supplies
- Website and software
- Marketing and advertising
- Business insurance
- Professional development (courses, books)
- Home office (if dedicated space)
- Mileage for business travel
- Phone and internet (business portion)

Keep Receipts: Document everything for tax time.

Quarterly Estimated Taxes

If Self-Employed: Pay estimated taxes quarterly (April, June, September, January)

How Much: Set aside 25-30% of income

Why: Avoid penalties and surprise tax bills

Hire an Accountant

When: Once you're earning consistent income
Cost: $300-1000/year for tax prep
Worth It: Saves money through proper deductions, ensures compliance, reduces stress

Local Regulations

Business License

Most Cities Require: General business license ($50-200/year)

Where to Get: City clerk or business licensing office

Penalties: Fines if operating without license

Home Occupation Permit

If Reading from Home: May need home occupation permit

Requirements Vary: Some cities restrict client visits, signage, parking

Check: City zoning department

Zoning Laws

Commercial Activity in Residential Zones: May be restricted

Before Seeing Clients at Home: Verify it's allowed in your zone

Alternatives: Rent commercial space, read online only, visit clients

"Fortune Telling" Laws

Some Cities Ban: "Fortune telling" for money (outdated laws, rarely enforced)

How to Navigate:
- Use "spiritual guidance" or "tarot reading" not "fortune telling"
- Emphasize entertainment/guidance, not prediction
- Check local ordinances

Reality: Most places don't enforce these laws, but know what's on the books.

Intellectual Property

Your Content

You Own: Your original spreads, interpretations, written content, videos

Copyright: Automatic upon creation (registration optional but stronger protection)

Protect: Watermark images, copyright notice on website, terms prohibiting unauthorized use

Others' Content

Don't Use Without Permission:
- Other readers' spreads or interpretations
- Copyrighted images
- Music in videos (use royalty-free)

Fair Use: Limited use for education, commentary, criticism (but consult lawyer)

Deck Images

Showing Cards in Readings: Generally okay (you own the physical deck)
Using in Marketing: Gray area (some deck creators allow, others don't)
Best Practice: Use your own photography, credit deck creator

When to Consult a Lawyer

Forming LLC: Lawyer can ensure proper setup
Contracts: For significant agreements
Legal Threats: If client threatens to sue
Disputes: Serious client conflicts
Compliance Questions: Unsure about local laws
Intellectual Property: Copyright or trademark issues

Cost: $150-400/hour for consultation
Worth It: Prevents expensive mistakes

Conclusion: Legal Protection Enables Service

Legal considerations aren't obstacles to your practice—they're the foundation that allows you to serve safely and sustainably. Proper legal setup protects you from liability, establishes professional credibility, ensures compliance, and creates clear boundaries that serve both you and your clients.

You don't need to be a legal expert, but you do need to cover the basics: appropriate business structure, clear disclaimers, proper insurance, compliant tax practices, and awareness of local regulations. These aren't complicated or expensive—they're simple steps that protect your practice and your peace of mind.

Invest in legal protection now, and you'll avoid problems later. Consult with professionals (lawyer, accountant) for guidance specific to your situation. And always prioritize ethical, legal practice over shortcuts that could jeopardize everything you've built.

Your practice deserves legal protection. Your clients deserve professional standards. You deserve peace of mind. Handle the legal basics, and focus on what you do best: serving through tarot.