Love it or hate it (and if you do love it, good for you), tax season is upon us.
The month of April is undoubtedly one of the most stressful months for those of us in the fitness industry who are self-employed. Most of us enjoy the privilege of working for ourselves, except when it comes to taxes. If you dread the forms, the rules, and the nit-picky details that come along with taxes, this one’s for you.
I’ve been self-employed for several years now, and have run the gauntlet of tax preparation options. I’ve used an accountant, purchased software, and DIYed them, trying to find the best option for my business. The result? They all work, but only if you put in the effort. Depending on what type of fitness business you run, some may be easier than others. So I’m not here to tell you how to prepare your taxes, but rather to talk about what they all have in common: tax deductions.
Whether you’re a solopreneur or have a small team, deductions can greatly reduce the amount of tax due when the deadline rolls around. Many fitness professionals operate as small business owners, making us responsible for tracking our income and business expenses, often without the help of an accountant. This means that many personal trainers and fitness instructors end up overlooking valuable deductions during tax season. In this guide, you’ll find tax deductions related to your fitness business that you might be missing out on.
Common Tax Deductions and Business Expenses in a Fitness Business
First things first, what exactly is a tax deduction, and how do you get it? If you’re new to doing your own taxes or are in the first few years of entrepreneurship, it’s important to get familiar with what will (hopefully) become your biggest tax advantage.
A deductible business expense is an expenditure that you incur that must be ordinary and necessary for business purposes. This means that the expense must be used for your business, not solely for your personal use. There are also mixed-use expenses, where you and your business benefit from the expense. We’ll get into those in a minute.
Business expenses can vary widely, depending on the type of work you do. The most common business expenses you may be able to deduct on your taxes as a fitness pro are:
- Expenses you may incur as a result of training sessions, client assessments, and administrative tasks
- Fees paid for professional services, including accounting, legal review, or tax professional support
- Software used for client communication, programming, and scheduling
- Expenses directly tied to operating a fitness business, such as equipment or gear
When taking business expense deductions like these, a clear separation between personal and business use is required. If you have something that is mixed-use (something you personally use and something your business requires, e.g., a car if you’re a personal trainer traveling to client homes), you will need documentation of its use for personal vs. business reasons, so that the correct allocations can be made on your taxes. Maintaining detailed records and saving receipts will benefit you tremendously. It will help reduce reporting errors, maximize deductions, and provide you with peace of mind in the event of an audit.
Home Office Deduction and Dedicated Office Space
Often overlooked, but increasingly used by fitness professionals, is a home office. If you’re spending time outside the gym working on programming, communication, or advertising, you may qualify for a home office deduction.
A home office deduction applies when you have a dedicated office space that is used exclusively for business purposes. It can be a space as small as your corner desk or an entire room dedicated to business use. Deductible home office expenses may include a portion of your mortgage or rent, utilities, internet service, and maintenance costs for that space. But before you try deducting an entire pile of bills from your taxes, remember that the home office deduction must be based on actual expenses tied to business use.
This deduction may not apply if you train exclusively at a gym and don’t take work home with you (which, in this day and age, is unfortunately rare). But if you program workouts, manage online courses, or complete administrative tasks at home, you may qualify.
If you want to take the home office deduction on your taxes this year, keep in mind:
- Dedicated office space must not serve personal purposes
- Internet service deductions must reflect your business use percentage
- You’ll need to designate the square footage used for your home office in comparison with the rest of your home
- Mixed-use expenses (e.g., utility costs) must be clearly separated
Professional Liability Protection Is Deductible Too
If you’re self-employed, you most likely have liability insurance to protect yourself and your career. If you don’t, I highly recommend it! It may be something you never need to use, but like your home, car, or medical insurance, it’s great to have if you do need it. It is also deductible as a business expense, which makes it feel almost free.
Liability insurance expenses are generally tax-deductible when its coverage supports your professional services. If you have professional liability insurance for your fitness career, it typically qualifies for this deduction. If your insurance is used strictly for business purposes, and directly tied to professional services you are legally allowed to offer, it may be fully deductible on your taxes.
If business insurances has ever seemed like an unnecessary expense, this is your sign to make a change. Having professional liability insurance reduces financial exposure while also lowering taxable income, so it’s a win-win for you.
Advertising and Management Expenses for Personal Trainers
With the ever-increasing competition present in the industry, personal trainers are having to expand their marketing budget to find and retain clients. These small expenses can add up, but come tax time, they can also benefit you.
Expenses that are directly tied to marketing and advertising your business are commonly tax-deductible. These can include:
- Paid printed advertising and social media ads that promote your business
- Social media management tools used strictly for business activities
- Professional photography or creative content used for branding within the fitness industry
- Domain and hosting fees for business websites
As with all other business expenses, it is important to keep receipts and appropriate documentation for marketing expenses, especially because they frequently come from several sources, which can make an end-of-year receipt roundup difficult.
Some of the most significant expenses personal trainers and other fitness professionals incur during a year are also often tax-deductible. Partially or fully deductible expenses related to business and client management may include:
- Music streaming services used during training sessions (remember to only deduct what you use for business purposes)
- Gym memberships required to train clients in a fitness facility
- Rented training space or purchased equipment costs
- Client assessment platforms and scheduling tools
All of these lower your taxable income while helping you grow your business.
Continuing Education, Vehicle Expenses, and Business Travel
I’ve always found continuing education to be one of the “fun” costs associated with being in the fitness industry. It’s an opportunity to learn new skills and develop your niche, but it usually isn’t cheap. Whether you’re studying for a new certification, attending a weekend conference, or looking for the cheapest and fastest classes to take before your recertification deadline, those costs can add up quickly.
The costs of continuing education and professional development can potentially be used to lower your tax burden. You may be able to deduct expenses like:
- Online courses and training programs relevant to your certifications and professional offerings
- Registration fees associated with approved certifications, such as maintaining certifications with professional organizations like the ACSM, ISSA, NASM, and others
- Professional memberships and journals directly tied to your business
- Conference attendance at industry events
- Expenses required to retain certifications and professional standing in the fitness industry
Often tied to personal training is business travel. Whether you’re commuting between gyms or clients’ homes or are jetting to a conference, travel expenses can also be deductible, though they typically require more effort and tracking than some professionals are willing to make.
Vehicle expenses and mileage related to training clients, as well as maintenance costs directly associated to your business may be able to be deducted. Under current tax rules, you may be able to use a bonus depreciation for qualified equipment you purchase for your business as well.
Conclusion
Taxes can feel complicated fast, but knowing which deductions you can take will make a big difference in your tax bill or your refund. Start by organizing the receipts and other documents you have and find other documentation you may need to take your deductions.
Remember that you don’t have to do your taxes alone. Consulting a qualified tax professional can set you up for success. Many accounting firms may be willing to schedule a reasonably priced consultation and answer basic questions, even if you choose to do your taxes on your own. Whatever route you choose, the best advice is to start preparing for next year’s taxes today.
Managing tax deductions protects your bottom line. Liability insurance protects your business.
Insure Fitness Group provides liability insurance designed specifically for fitness professionals through a single annual policy focused on professional and general liability coverage. Build a stronger fitness business with protection structured for self-employed personal trainers and fitness instructors.
