By Dan Sharon, CPA
Your passion in life is being a personal trainer, a fitness instructor, yoga teacher, a health and wellness coach, or another similar profession and you have turned this passion into your business. Now you need to file your income taxes for the previous year and we all know how confusing and frustrating that can be.
Below are a few suggestions to help you maintain your zen this tax season:
First - Determine the following:
Regardless of the answer, it is essential that you know how to track your income, expenses and the information that your accountant will need to file your tax returns.
Second - Record all of your income and expenses as they happen.
Third - Separate personal and business income and expenses
Generally, any reasonable expense incurred by you or an employee that is made during your normal day-to-day operations is a deductible expense. Examples include:
Income from multiple sources
Many teachers and trainers work at more than one studio or gym and their tax returns are slightly more complicated, but the suggestions below can simplify that process for you:
If you currently receive a W-2 from a gym or studio where you work and have your own private clients, you will record this income in separate sections of your tax returns:
Combine all of your expenses from your various teaching jobs and deduct those expenses from the combined income. Since you are working at multiple locations and most likely none of these locations are your primary business location, you would treat your home as your primary business location. In doing this, all transportation to go to all the different locations should be deducted on your return. Most of your day is now being spent away from your primary office (your home), so remember your cell phone is a business expense since how could your clients and studios reach you otherwise.
These suggestions should help you maximize your deductions and minimize your tax liability, however, the information above is not comprehensive, doesn’t apply to everyone nor should it be considered tax advice. Please consult your accountant for specific advice pertaining to your exact situation.