Here are the top questions personal trainers ask about taxes.
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Are personal trainers employees or independent contractors?
Whether you’re an employee or independent contractor depends on your work agreements.
Some gyms hire trainers as employees. They follow the gym’s schedule and training routines and may do other work for the gyms.
Other gyms have independent contractor trainers, or you may be a freelance trainer with your own clients. Independent contractors set their own schedules and use their own training plans.
How do employees file tax returns?
If you’re an employee, you’ll get a W-2 from your gym at the end of the year. Add it to your Form 1040 tax return.
You don’t get to take any business deductions, so make sure your gym has agreed to reimburse any expenses.
How do independent contractors file tax returns?
Independent contractors file Schedule C with their Form 1040. You might get a 1099-NEC from a gym or a 1099-K from your electronic payments app. If your clients pay you cash or don’t send a 1099, you still have to report the income.
You may be eligible to claim business deductions (more below).
As an independent contractor, you usually won’t have taxes withheld. Instead, you’ll need to pay estimated taxes each quarter.
Do personal trainers have to collect sales tax?
You may have to collect sales tax depending on where you work. Each state, and sometimes city or county, has its own sales tax laws.
If you’re in a state that charges sales tax on personal training, you’ll need to add the tax amount to your fees. You may need to send the sales tax you collect to the state monthly, quarterly, or annually. You’ll also usually need to file a sales tax return.
If you train in multiple locations, watch out for different sales tax rates and rules. It usually goes by where you do the training session. So you might need to collect different amounts of sales tax in different locations.
If you offer online personal training sessions, you may need to collect sales tax based on where your client is. It depends on how much money you earn from clients in that area. Each state has its own rules on remote services.
Should you form an LLC or corporation?
There is no requirement to form an LLC or corporation for tax purposes. If you’re a solo trainer, there will often be little to no tax benefit to doing so.
An LLC or corporation can help protect you from liability, but you may also be fine just buying insurance. The rules and benefits vary by state, so this is something to ask a local lawyer or insurance agent.
What do you do if you hire an employee?
If you decide to expand your personal training business and decide to start bringing on employees or independent contractors, check this hiring guide for everything you need to know.
Can you claim business expenses?
Yes, if you’re an independent contractor or business owner, you can deduct your business expenses.
Typical tax deductions for personal trainers include insurance, advertising, and continuing education. You can deduct equipment, but it generally needs to be something that a trainer needs to have for their business not personal clothing or equipment that you also use for your business.
If you do online training sessions, videos, or other promotions, you may be able to deduct video equipment, software costs, and related expenses.
If you drive from client to client, you may be able to take the standard mileage deduction. If you commute from your home to your gym or even to clients, that would usually fall under a non-deductible commuting expense.
How do you track your expenses?
There are a number of accounting tools you can use to track your expenses. They include apps that automatically pull business expenses from your bank statements, track your mileage, save your receipts, and more. You can also invoice your clients or pay anyone who works for you.
Do you need to hire an accountant?
If you’re a solo trainer, you usually won’t need to hire an accountant. Tax filing software can help you file your taxes, and the software providers now have accountants on call to answer your questions at tax time.
If you want to hire people and grow your business, it’s usually a good idea to find a CPA near you to help you make sure you’re doing everything properly.