How to Manage Your Self-Employed Personal Trainer Taxes

Editorial team of TFX

• 26.10.21 • 5 min read

The question of whether personal trainers are independent contractors or employees is often contested among fitness studios. Despite that, we seldom discuss the differences between independent contractors as opposed to employees or self-employed people in the fitness industry and the resulting personal trainer tax implications. So, do personal trainers pay taxes? In addition to paying personal trainer taxes, trainers also file tax returns, but let's look at the different aspects of the tax situation.

Common Deductions for Personal Trainer Taxes

No matter how much time personal trainers dedicated to training clients, they are considered self-employed. Consequently, personal trainers are able to claim these expenses as business expenses. Make sure you don't forget your start-up expenses, like marketing, website creation, advertisements, or costs to scout out a location. Listed below are the personal trainer tax deductions that should not be overlooked:

Marketing and Website 

The costs of maintaining a website for a personal training business also include the costs of hosting and any paid themes or widgets. A company's cost of creating promotional materials, such as flyers, business cards, t-shirts, and signs, can also be deducted. Remember to factor in the money spent on paid advertising, such as Facebook, Instagram, or radio ads, as well as the cost of direct marketing such as search engine pay-per-click advertising.

There are many expenses related to computers for self-employed individuals. Personal trainer’s fitness business expenses could include not only the cost of the computer but also any connected expenses, such as your internet connection and software programs used for your fitness business.

Education 

There are actually two directions for this. Training and educational materials can be deducted not only for clients but for yourself as well. Suppose you want to become a personal trainer, so you must take a training course. Your training courses would likely be tax-deductible. As long as you provide other training materials, such as videos or apps, to your clients, those might also be tax-deductible.

The Internal Revenue Service (IRS) considers continuing education as tax-deductible, so personal trainers must maintain their certification. Your educational materials may include any online or offline courses, conferences, workbooks, and other educational materials related to your profession.

Fitness Equipment

As long as personal trainers use the exercise equipment with their clients, not just for personal use, they can deduct it as a fitness business expense throughout the year. For instance, personal trainers cannot qualify the new fitness mat that they use only for Saturday morning yoga class with friends on a personal level. However, personal trainers can deduct the medicine ball, the jump rope, and the 10-pound dumbbell they use with clients.

Frequently, trainers ask, can personal trainers claim supplements on tax? The insurance for personal trainers also includes nutrition insurance and dietary supplement options. Additional coverage may also be added if needed. As long as personal trainers meet IRS guidelines, they can generally deduct the premiums they pay.

Mileage

Personal trainers can deduct 56 cents per mile driven to and from training sessions at a client's home or in a park if personal trainers travel to and from those locations. Training regularly out of your car adds up to a lot of money.

Types of Employment for a Personal Trainer

Trainers must understand their taxes by understanding how they work, not by how they teach. Personal trainers can be divided into three main categories:

Personal Trainers Work For A Gym

When personal trainers work for someone else (fitness business owner) or for a company that pays salary or wages, they are considered an employee. Personal trainer taxes are withheld from paychecks by employers to fulfill tax obligations — you might remember completing the Form W-4, which details the amount of taxes for personal trainers that employer should deduct.

Personal trainer taxes are the easiest for employees to file. Personal trainers will receive a Form W-2 from their gym, which they can use to report their income and withholdings.

Personal Trainers Signs a Contract With a Gym

An agreement formalizing the terms of the contract is signed between personal trainers and the gym after personal trainers negotiate prices and services. Typically, personal trainers will find the contract explaining how revenue will be allocated, and if the trainer will be charged a fee to use the gym space for training sessions. Your gym does not employ you, so you are considered self-employed. Additionally, you must make quarterly estimated tax payments throughout the year, and if you fail to do so, you could be penalized. 

On Form 1040, Schedule 1, you can deduct half of the self-employment tax if you make more than $400 in a year. You must pay self-employment tax if you make more than $400 in a year.

An independent contractor is different from an employee in that the gym does not pay a salary or withholds personal trainer taxes. Trainers will simply receive their portion of the pay and the gym will keep whatever is theirs.

During tax time, you will receive a Form 1099-NEC instead of a W-2 as an independent contractor. As a result, the IRS will receive information on the non-employee compensation in the 1099-NEC.

Expenses related to your work can be deducted from income as an independent contractor, ultimately helping you to lower your personal trainer taxes. As long as you use the gym's space and equipment for training, you can deduct the gym's part from your training session revenue.

Personal Trainers Are Hired Directly by Your Trainees

If personal trainers have exclusive contracts with their trainees, they are considered self-employed. Since trainees are individuals, not businesses, trainers typically won't receive a Form 1099-NEC from them. Nevertheless, personal trainers are required to pay taxes throughout the year and must report this income on their tax return with quarterly estimated payments. Utilizing business tax planning services can help manage these obligations effectively and ensure compliance with tax regulations.