| As a self employed personal trainer or fitness gym | | | | calculate the business portion of the rent expense is to |
| owner, operating the business on your own can | | | | divide the amount of square feet used for business |
| become very overwhelming especially when you | | | | purposes by the total square footage of your home. |
| throw taxes in the mix. To simplify your job, below is a | | | | Personal versus Business Expense Scenario |
| listing of tax deductions & credits that you should | | | | If your entire home is 2,000 square feet and your |
| know. | | | | business office is 500 square feet, you would be able |
| Typical Tax Deductions | | | | to treat 500 divided by 2,000 or 25% of your of rent |
| As the IRS states, all business tax deductions must be | | | | expense as a business expense. Please note that the |
| both "ordinary and necessary" or common & | | | | business must be up and running to treat this expense |
| appropriate for your trade or business. In the case of a | | | | as business expense. So if you launched your |
| self-employed personal trainer or gym owner common | | | | business in June, you could only claim the business |
| business deductions include: music tapes, insurance, | | | | expense from June onward. |
| business-related meals, federal/state/local taxes, | | | | Examples of expenses in which the business portion |
| interest on any debt, rent expense, retirement plans, | | | | are deductible include: Real Estate Taxes, Qualified |
| travel expenses for business purposes, office supplies, | | | | Mortgage, Insurance Premiums, Deductible Mortgage |
| communication mediums (i.e. cell, fax, TVs, phone | | | | Interest, Rent, Casualty Loss, Utilities, Insurance, |
| system), promotional/advertising expenses, and health | | | | Depreciation, Security System, Repairs |
| insurance. While there are your typical tax deductions, | | | | 3) Health Publications |
| you also want to be aware of the often overlooked | | | | Publications that the gym subscribes to or uses for |
| deductions as detailed below. | | | | educating clients can be treated as a tax deduction |
| 1) Self Employment Tax (15.3% = 12.4% Social Security | | | | because it is common and appropriate in the trade. |
| + 2.9% Medicare) | | | | 4) Charitable Contributions |
| It is surprising how many self employed taxpayers | | | | An example of this tax deduction would be donating |
| miss this tax deduction which maybe be so obvious | | | | old gym equipment to a qualified organization like a |
| that it is overlooked. Please be aware that you can | | | | school. Tax deductions for donating to Haiti right now |
| deduct 50% of your self employment tax. | | | | would also make sense. |
| 2)Work at Home Tax Deductions | | | | 5) Hiring Certain Employees Coming From Less |
| Believe it or not, if you work out of your home you can | | | | Fortunate Groups |
| decipher between personal and business expenses | | | | While trainers need to be fit, you can certainly hire |
| for tax deduction purposes. For instance, an item such | | | | certain employees for cleaning & admin work. |
| as a credit card machine would be an obvious direct | | | | There is the Work Opportunity Tax Credit which |
| business expense while rent expense would be | | | | allows employers to deduct up to $2,400. Generally, |
| treated as both a business & personal expense | | | | the tax credit is 40% of the 1st $6,000 in 1st year |
| since it satisfies those two purposes. The way to | | | | wages or $2,400. |