Independent personal trainers are responsible for self-employment tax as well as their personal tax liability. Fortunately, there are a variety of tax deductions that can reduce the amount you have to pay.
Check with your tax professional to determine which deductions apply to you, and carefully follow all of the relevant IRS regulations and guidelines to reduce the risk of an audit when filing your personal trainer tax return.
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If you’re a W2 employee, your employer usually takes taxes out of your paycheck.
However, when you’re an independent contractor or self-employed, you’ll need to figure out what income tax you owe the Internal Revenue Service (IRS) on your own.
Typically, self-employed individuals pay quarterly or annually, depending on how your small business is structured.
Taxes are based on how much you earn, your marital status and the state where you do business. Tax deductions can reduce your taxable income, so you end up paying less in taxes.
For example, if you earn $30,000 in a year and have $8,000 in deductible expenses, you would only need to pay taxes on $22,000 since the rest of it is considered deductible.
That makes tax deductions a nice way for personal trainers to save some money on their taxes because it reduces the taxable amount.
If you are someone’s employee, tax laws prevent you from writing off any business expenses. But if you are a self-employed personal trainer, you can reduce your taxes by various deductions.
Everyone’s situation is different, so it’s important to check with your own accountant or tax professional before filing your tax return. In general, though, here are some common personal trainer tax write-offs.
Insurance claims are common in the fitness industry. It’s smart to have personal trainer insurance to help protect your business from financial losses caused by medical expenses or lawsuits.
Many kinds of business insurance are tax-deductible, especially if they’re required. Coverage like general liability or workers’ compensation can often qualify for a deduction. The insurance premiums you pay are generally tax-deductible as long as they meet IRS guidelines.
Similarly, if you’re self-employed, you may also be able to deduct your health insurance, dental insurance and long-term care premiums.
If you have a vehicle that you use exclusively for your personal training business, you can generally write off its entire cost of use.
However, if you use your personal car for business, you will need to calculate your business use. Deductions can include driving to and from clients’ homes for training sessions or running business-related errands. You cannot track commuting miles, though.
For that portion of your car expenses, you can choose to deduct either actual expenses or a mileage rate. The IRS guidelines are fairly extensive but reasonably easy to follow.
The current IRS standard mileage rate for tax deductions is 58.5 cents per mile but changes annually. You can use apps to easily track your business mileage to help you keep accurate records.
In general, any gear that you use exclusively to train clients is tax-deductible.
Free weights, treadmills, weight machines, exercise mats, water fountains and even sound systems may qualify if you use them solely for your clients. Workout DVDs, paid music streaming services and the like are also eligible, again provided that they are used for business purposes and not by you during your off time.
A home office is one of the most common (and sometimes the most profitable) fitness instructor tax deductions.
You must follow several IRS guidelines you must follow to claim this deduction, including regular and exclusive use of the office space. However, deductible home office expenses may include partial rent or mortgage interest, insurance, repairs and depreciation.
Similarly, you may also be able to claim a portion of your monthly utility bills, cell phone bill and more.
Certain legal fees are deductible. For example, the costs of filing personal trainer legal forms or having an attorney draft a letter for you. Legal fees that are directly business-related expenses are generally tax-deductible.
Personal legal fees, such as the cost of drawing up a will, generally are not.
Personal trainer marketing comes in many forms, from branded clothing to business cards, flyers and paid social media ads. If you pay website domain fees, have a logo created or hire a photographer for promotional shots, it all counts as long as it’s a legitimate business expense.
While marketing and advertising expenses are generally tax-deductible, costs related to lobbying (trying to influence legislation) are not.
You can generally deduct some or all miscellaneous business expenses from your self-employment taxes. These may include:
Special guidelines may apply to depreciable property, such as computers and office furniture.
Travel costs are generally tax-deductible if they’re necessary for your fitness business, such as a trade show or conference. Or maybe a celebrity client wants you to travel with them when they go on a trip.
Whatever the case, you will need to separately account for your transportation, lodging, meals and incidentals using one of the IRS-approved methods. There are also a variety of IRS guidelines and regulations surrounding travel deductions, some of which are quite complex.
When claiming personal trainer tax deductions, the IRS looks for two basic things:
Although receipts are not always required for certain small purchases, it’s best to get in the habit of saving and filing all receipts for bookkeeping.
To claim a deduction for car expenses based on mileage, you’ll need to keep a mileage log for your business use of the vehicle.
For a home office deduction, you’ll need to know the square footage of your house and the square footage of the space you use exclusively as a workspace.
As a self-employed sole proprietor, you would use Schedule C (Form 1040) to list your income and deductions.
If you choose to file your taxes through a tax software solution such as TurboTax or TaxAct, the software will walk you through the process. It will help you understand each deduction and the rules for claiming it.
However, if you aren’t financially or technologically savvy, or it’s your first year in business or your tax situation is complicated, it may be better to use a tax professional to handle your personal trainer tax return. Even if you use a software solution, it’s a good idea to have a CPA or tax attorney look over your financial records once a year.
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