If you’re an independent contractor or business owner than by now you probably know you have to file your own taxes each year. It can be a pain, but has it’s perks. Tax Write Offs For Personal Trainers covers the special “discount” you get for being a business owner. Knowledge and planning goes a long way when it comes to financial health. Just like with physical health! Getting organized for filing taxes can save you money and actually reduce stress.
Having a handle on the numbers allows you to make accurate business decisions, like how to spend money on marketing and education or when it’s ok to take a vacation. When you’re closely connected to your finances it reveals the bigger picture of your business. Some weeks are slow and others are busy. It often balances out, affording you peace of mind week to week and month to month. On the contrary, if you’re barely scraping by – the numbers can help you set realistic goals for yourself. The first step is to make sure you’re earning what you think you are. When your bank account is low even though you’re working hard, it’s frustrating. Just like clients who think they’re exercising and eating right, but can’t lose weight.
Income Reality Check
What you earn can be deceiving with the many expenses that go into a business. Rent and taxes are two of the biggest reasons for this. Rent is usually a fixed number that can be factored in fairly easily so, let’s look at taxes. Say you bring home $50 (after paying rent) for each client session – your pay is actually $50 x 0.20 = $40/session. This is because about 20% of your income belongs to the government, depending on your tax bracket. It could be more or less. If you’re doing 20 sessions each week you might think you’re making $50 x 20 = $1,000/week when you’re actually making $40 x 20 = $800/week. That’s a $200 difference and might change what you do with the money you’ve earned. Most of us tend to spend money on things we don’t need when we think we have extra. Knowing how much you need to earn a living is the other side of the equation, which can be done by adding up your living expenses for the year.
Getting Organized For Tax Filing
Now that you have a better handle on what you’re earning hourly, keep track of how many sessions you actually complete and get paid for each week in a spreadsheet on your computer to see what’s happening within the month. You can also use a program like Quickbooks or an app on your phone. If you use an online scheduling system like Schedulicity, it might keep track for you. If you don’t have a computer you can go old school and do it on paper! Looking at your weekly and monthly income helps you keep a realistic view of your business and set goals.
Christine Oakes, owner of Fun2BeFit in Silicon Valley, CA says “I have been using Quickbooks to track all my biz expenses & mileage for 2 years now. It tracks me automatically when I get into my car via GPS & I can note if it is biz trip or personal. Also tracks transactions from my accounts & allows me to take pics of receipts to store digitally. The service has been a lifesaver!”
Having these numbers helps ensures accuracy when paying estimated taxes and avoid penalties. It also allows you to see what your financial health really looks like from week to week, month to month and year to year. It’s like tracking body fat, muscle mass and body weight for clients. The numbers help don’t they?
Being organized saves you money should you choose to hire an accountant because they often charge according to time. As a financial bonus, they’re usually a write-off/deduction which makes them affordable. They’re worth the cost most times because they often save you enough money to cover their fee plus some. Find an accountant who has experience with personal trainers or at least client-based business owners. Look for someone early, don’t wait until April when taxes are due, schedules get full quickly!
References and Resources
Tax Planning for Personal Trainers: Estimated Payments
Tax Deductions for Personal Trainers
Tracking Mileage for Personal Trainer Tax Deductions