At the beginning of each year, it’s time to set new year goals and intentions. Like it or not, it’s also the time of year to start gathering info to file your taxes. We know that this can be a stressful time of year and it’s much easier to procrastinate, but taking steps now will ease your filing experience.
If you are new to teaching yoga or fitness classes, filing taxes can be confusing and overwhelming. Read on to see some basic tips to get started. However, please note, we are not tax experts so it is important to always consult a tax professional or accountant if you are uncertain about your tax filing requirements.
Are you an employee or an independent contractor?
First things first, confirm if you are an employee or an independent contractor. Many yoga and fitness teachers fall into both categories, especially if they teach at a variety of gyms, studios, and privately.
If you’re an employee, then taxes have been withheld from your paycheck. The studio or gym you work for should provide you with a W2 Form no later than the end of January.
If you are an independent contractor, then you are responsible for reporting your income and paying taxes. If you are considered an independent contractor for a gym or studio, they should provide you with a Form-1099.
Itemize vs. standard deductions
Tax bills and requirements are always subject to change but keeping your expenses and receipts organized will never be a bad idea. Keep track of your expenses related to your business and professional development. This can include:
- Continuing education or professional development relevant to yoga or fitness
- Music streaming subscriptions for class playlists
- Necessary yoga or fitness apparel and equipment
- Home office or teaching space
- Professional association dues or membership fees
- Liability insurance
- CPR and First Aid Certification
- Mileage and other travel costs
- Business and administration costs such as website hosting, email marketing, and payment processing fees
You may not be required or decide to itemize these deductions depending on the current tax rules – but having an organized record of your expenses will give you a clear picture of how much it costs to operate your business.
Create a system of your receipts and expenses
If you do need to track down your receipts and expenses, it might take some detective work but you can do it!
- Go back through your calendar and find classes, workshops, and events you attended for professional development
- As you go through the calendar, confirm mileage for traveling to wherever you taught
- Search credit card statements for any business expenses you have incurred like professional books, music, or equipment
- Search your inbox for any online purchases and receipts
- Once you’re caught up, create a filing system in a system like Google Drive or Dropbox for notes and receipts
Hire a tax expert
The intention of this article is to provide some guiding first steps for new yoga and fitness teachers. But, it’s always best to seek out the advice of a trained tax professional or accountant if you are unclear about your tax filing requirements.
While this might feel like an additional expense you are unable to take on, if you are new to independent contracting and/or have income from a variety of sources, then we suggest making the investment.
We know tax season can be overwhelming but remember, you don’t have to do it alone and there are many resources to help you. We hope this article has provided some ideas on how to make tax season as headache-free as possible.