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Pilates Instructors’ Top Tax Questions, Answered

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It’s tax season again, a stressful time for anyone who grapples with the complexities of filing a tax return. It can be hard to find an accountant familiar with the details of a Pilates career, so we put out the call for a CPA who’s worked in this area, and Michelle Fama, owner of Core Pilates NYC, connected us with her accountant, Steven Kingsley, CPA. He has worked with many a Pilates instructor over the years; in fact, he’s worked with the entire Core Pilates NYC staff. We put some of your top tax questions to him and he graciously provided answers. We hope this Q&A can be a helpful guide for any confused instructors out there, but be sure to consult a tax professional for help with your specific questions and concerns. Happy filing!

Pilates Pro: This is is the most-often-asked, big Kahuna question: What can I itemize for deduction?

Steve Kingsley: Let me start off by saying deductions are expenses incurred in order to provide one’s expertise, service or to operate that particular business activity. There are expenses that are general to most any independent contractor but in some cases I have tried to put an explanation to how they apply to Pilates instructors. These would include the following:

  • Business telephone (excluding home phone)
  • Internet access used for research or booking appointments (lots of Pilates studios have online booking for their clients and instructors need to check in periodically)
  • Professional trade publications and magazines
  • Professional organization dues and memberships
  • Office supplies, postage and stationery
  • Computer expenses, including the cost of new equipment
  • Professional seminars and education: For someone who is just getting started in Pilates as a profession, the cost of teacher training is NOT deductible. Classes required to start a new career are not deductible. However, the cost of maintaining and adding on additional certifications is deductible. Seminars and education are limited to one’s specific profession.
  • Business gifts to clients or colleagues: These are limited to $25 per person per year.
  • Out of town travel expenses: A lot of instructors have the opportunity to go to conferences and retreats. These are 100 percent deductible. This category would include airfare, hotel, ground transportation and rental car but not the cost of the conference, which would be included under the category above.
  • Local transportation: The cost of going from home to the pilates studio or studios you provide services for are deductible as well as the cost of going between studios.
  • Meals and entertainment: The cost of taking a client or colleague out is deductible. However, it is limited to 50 percent of the total cost.
  • Liability Insurance: Many independent Pilates instructors are required to have their own insurance.
  • Health insurance
  • Research and reference: This includes going to other Pilates and exercise classes to learn and experience how others teach
  • Workout clothing used during teaching or to take other classes

PP: Can I deduct my gym membership or other exercise classes?

SK: Gym membership is specifically NOT deductible, because it’s considered a personal expense. But exercise classes that you enroll in can be deducted as research (see above). Gym membership can be deducted as part of a weight-loss program if under a doctor’s order as a medical expense. But this does not apply to people in fitness as a business expense.

PP: How can/should I organize my quarterly taxes?

SK: When you file your tax return, your accountant should prepare estimated quarterly taxes for the next year. The estimates are figured based on using 100 percent of the tax liability from the year before. Paying estimated taxes avoids underestimated-tax penalties and helps pay towards your current year’s liability. I like to do tax planning for my clients prior to the end of year to find ways not only to help lower their tax liability but also to see where they stand in the current year.

PP: Are there any deductions that tend to raise red flags for Pilates instructors?

SK: Taking liberties and reporting deductions excessively will always create an audit.  The general rule of thumb in a service business is that your expenses shouldn’t exceed more than 30 to 40 percent of your income. The best way to be prepared for an audit is to have all your documentation in order. Each taxpayer should keep all their receipts and should label the business purpose of each expense.The IRS only requires a receipt if it is over $75. And remember to ALWAYS report all of your income, regardless of whether you receive a 1099.

Steven Kingsley has been a CPA for 25 years, and has been running his own practice for 16 years. He works with a lot of creative clients in the film, music, fashion, fitness and restaurant industries. He can be reached at stkingsleycpa@gmail.com.
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    Pilates Instructors’ Top Tax Questions, Answered - Pilates Pro - Pilates-Pro.com: The Pulse of the Pilates Industry
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    Pilates Instructors’ Top Tax Questions, Answered - Pilates Pro - Pilates-Pro.com: The Pulse of the Pilates Industry
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Reader Comments (4)

Great Article! Every year I kind of forget what stuff to keep track of and meet with my accountant to put it all back together.

Something I find interesting is that some instructors never got a business license. Aren't we all supposed to report earnings to the city where we live and pay taxes? I got one from day one of being a teacher, but I was an independent and never went on staff anywhere.
I even got a second certificate to cover any product sales - like balls, foam rollers, etc.

I'd love to know who should get one and who doesn't need one.

April 7, 2010 | Unregistered CommenterAnne Samoilov

I recently moved about 600 miles from the training studio I have been working on getting my certification. I wanted to purchase a reformer and a few more pieces. Do I need to get my business license first in order to write off the equipment? I won't have my certification for about 3 months, however I need the equipment to practice for testing and I will be offering training in my home. What do I need to do in order to make all of this work out? Thank you

September 3, 2013 | Unregistered CommenterVicki

Does the cost of going between Pilates' studios to teach include mileage?

March 15, 2014 | Unregistered CommenterMary Sharon Komarek

Kingsley info about workout clothing is not accurate. e.g. see "Work Clothes and Uniforms" at http://www.irs.gov/publications/p17/ch28.html

You can deduct the cost and upkeep of work clothes if the following two requirements are met: 1) You must wear them as a condition of your employment, and 2) The clothes are not suitable for everyday wear.

It is not enough that you wear distinctive clothing. The clothing must be specifically required by your employer. Nor is it enough that you do not, in fact, wear your work clothes away from work. The clothing must not be suitable for taking the place of your regular clothing.

Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc.). Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear.

However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible.

Protective clothing. You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves.

Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers....

March 21, 2015 | Unregistered Commenterwrongdog

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