As a business owner, you’re already privy to the standard small business tax deductions. But did you know there are other tax deductions specific to your fitness studio you can claim? We’ve compiled a list of available deductions for your fitness studio. This way, you can ensure you haven’t overlooked anything before filing your taxes for the year.
Equipment and gear
Any equipment and gear used solely by your members constitute a business expense. This includes items such as mats, weights, machines, sound systems, and water bottle refill stations. If you bought brand new ellipticals, yoga mats or kettlebells this year, you can deduct these items and up to one million dollars worth of equipment purchased during the year from section 179. This deduction is very liberal and applies to almost all types of equipment, both new and used.
If you travel for business purposes or market research, you may be able to write off your flight or hotel expenses if you can provide proof the trip was for business expansion.
Home office expenses
If you run the logistics side of your business from a home office you can take advantage of the home office deduction. In order to claim this deduction, your home office has to be used on a regular basis and for business purposes only. However, if you use the space for work and personal purposes, you may not be able to claim the deduction. Additionally, if you have a training room that you spend time working out in as much as your clients do, it likely won’t qualify for a deduction, as it isn’t a dedicated home-based workspace. Work with your CPA to decide if a regular or simplified deduction method makes the most sense for your business.
If you hire a lawyer, accountant, or bookkeeper, you can deduct the cost of these services on your tax return. However, if you’re working with legal counsel to assist with your business, you may not deduct items in personal nature such as creating an estate plan, you may only deduct the portion of the fees directly related to your business. If you’re unsure whether the service and its fees are tax-deductible, we recommend reviewing the IRS’ guidelines on deducting legal and professional fees.
If you attend any classes or seminars to hone skills related to your business you may be able to deduct these expenses. For example, if you are a trainer and complete the Group Fitness Instructors Certification with the American Council of Exercise, you can deduct the price of the course from your taxes.
If you drive to and from your studio, you definitely could serve to benefit from this deduction. Any mileage racked up between studios, gyms or clients can usually be deducted.
The cost of work clothing is deductible. You are not allowed to deduct the cost of any workout clothing you might wear outside of work. However, you may deduct the clothing you wear for work that has been branded with your company’s name or logo. As a bonus, the cost of dry cleaning for your workwear is also deductible.
Internet and cell phone
Phone and internet service are crucial to keeping your studio a well-oiled machine. Your business-related phone and internet fees are tax-deductible. Note, you may only deduct the percentage of time you use these services for business-related purposes.
Music and exercise videos
If you play music in your studio or during a class, you can deduct the cost of your music licensing or streaming services. Be sure to have receipts at the ready that prove the videos or music you are deducting were used for business purposes only.
As a general rule of thumb, any business-related expense that is ordinary and necessary counts as an eligible deduction. There is an array of fitness-industry specific expenses you can claim for your business. What you can deduct will depend on the nature of your fitness business. Is there a purchase you’ve made that doesn’t appear in this blog? Keep the receipt and hand it off to your CPA before you file your return this tax season.