If you're a kids yoga teacher, you know the many benefits of teaching children - those smiling faces when they leave your class is probably the No. 1 job perk. It's also pretty awesome to be your own boss, do something you love, and help both kids and their parents achieve a little bit of peace. Am I right or am I right?
Without shattering your peace of mind, being a kids yoga teacher isn't always fun and games. Indeed, you can't ignore the fact that you are likely paid as an independent contractor and have to deal with filing taxes for your yoga business. I've been there done that - every year for the past 15 years. It's no fun. In fact, dealing with your taxes may be so daunting that you haven’t even started to organize your year-end books or figure out which tax deductions you can take. Luckily, you still have time and this is one task that is certainly worth it. Why? Tax deductions can lower the amount you owe Uncle Sam or perhaps net you a refund. Either way - this can mean more money in the bank for you. So, stop procrastinating and take a look at our top 9 tax deductions for yoga teachers.
1. Home office
If this marked your first year teaching yoga and using a home office to handle your administrative tasks, you may not realize that you can deduct home office expenses even though you don’t have a separate “office” in your residence. Although a dedicated office is ideal, this may not be an option if you live in an apartment with roommates or live in your parents basement (hopefully not!) Luckily for you, you can allocate a corner of your dining room or even your bedroom as your work space. According to the IRS, you can deduct a portion of your rent or mortgage for the room or space that is used exclusively for business purposes. For example, the square footage of my home office equates to about one-eighth of the total square footage of my house. This means that I can deduct about 12 percent of my mortgage payments.
2. Home office supplies, equipment and furnishings
Talking about a home office, you can also deduct expenses related to the purchase of home office supplies and computer equipment. This includes office furniture like a new stand/sit desk - my big ticket office expense in 2016. I researched affordable electronic desks and purchased one for $669 at Ikea. But, guess what? It was money well-spent as my back fatigue is now gone plus I get to write it off as an office furnishings expense. Besides a new desk, other big ticket office items may include an ergonomic chair, a printer, or a new laptop. And, don’t forget about smaller everyday office supplies like printer paper, notebooks, paper clips or anything else you need to run your business. These are all typically deductible too.
3. Utilities, wireless and other related services
Just like you can deduct a percentage of your mortgage or rent as home office space, you can usually do the same thing for utilities and other household bills. For example, you can typically deduct the portion of your electricity, gas, cable, wireless and cell phone bill used to conduct business. Just make sure you keep accurate records and remember: Your personal household bills are not deductible.
This is an expense that is often overlooked, especially if you’re a newly minted yoga teacher. Yet, fitness liability insurance is crucial! And because we know how important it is to be insured, we offer a special discount for you to get covered right by our partner BeYogi.
5. Automobile expenses
Do you drive your car to all of your classes? The life of a roving yoga instructor can certainly put a lot of wear and tear on your car (and you!) but it's a necessary evil. The good news: As a yoga teacher, you can either claim the actual car expenses or deduct the standard mileage rate of 56 cents per mile during 2016, according to the IRS. If you decide to claim the actual expenses for your car, don’t forget to include gas costs for traveling to yoga-related events, as well as expenses related to oil changes and repairs.
6. Travel costs
If you traveled to yoga events, trainings, and conferences to enhance your education, you can usually deduct related hotel bills, airline travel, or other associated expenses. You can also deduct 50% of your business meals or entertainment, according to the IRS. For example, if you take a studio owner to lunch to discuss Pretzel Kids classes, you can normally deduct 50% of the restaurant bill.
7. Supplies related to your business
If you buy exercise equipment for your classes - like a balance ball, yoga mats, props for your Pretzel Kids games, that's usually deductible. In my situation, I deduct the cost of yoga props and other fitness equipment that I use for my classes.
Did you create and print marketing materials for your Pretzel Kids business, including brochures, flyers, mailers or business cards? If so, these are typically tax deductible. In addition, you can usually write off costs for online advertising through platforms like Facebook, Twitter, and Google. And, don’t forget about paid email marketing using Constant Contact or other similar channels. This form of marketing is also a viable tax deduction.
9. Professional service fees
Did you hire a lawyer to help you incorporate or an accountant to handle your bookkeeping? If so, you can usually deduct these professional fees. You can also normally deduct fees for other professionals you hire for your Pretzel Kids business, like a graphic designer or someone to help you with social media.
Regardless of which deductions seem appropriate for you, it’s a good idea to seek advice from an accountant or financial advisor. And, keep this in mind: The cost to hire a tax expert may be tax-deductible. A win-win.
Robyn is a journalist and marketing expert based in Boston. A former writer for Investor's Business Daily (IBD) and NerdWallet, Robyn is also the founder and director of Pretzel Kids, a children's fitness brand and online kids' yoga teacher training school.