Taxes for Personal Trainers
by Susannah McQuitty
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The gym is a great place to escape for a little while, especially if you can earn a little money training people while you’re at it. The reality is that even the safe haven of bench presses and free weights can’t save you from having to file your taxes, but the good news is that we can simplify the process.
For personal trainers, understanding your taxes starts not with how you teach, but how you work. Let’s break down the different types of personal trainers into three main categories:
- You work for a gym, which assigns your trainees and usually pays hourly.
- You sign a contract with a gym, and they get part of the payment for each trainee.
- You’re hired by your trainees and either rent the gym space or pay your own membership fees.
Taxes work a little differently for each of these situations, so let’s break them down one at a time.
You work for a gym
Right off the bat, we need to explain what makes someone an employee. You’re an employee if you work for another person or company for wages or a salary. Your employer withholds taxes from your paychecks to fulfill your tax obligation—you probably remember filling out a Form W-4, which tells your employer how much to withhold. Personal trainers who are employees normally get paid minimum wage and are expected to make the “real” money by selling products, services, and programs offered by the gym.
When it comes to taxes, employees have the simplest process. Your gym will send a Form W-2, which helps you fill out income and withholding information on your tax return. Unfortunately, employees can’t deduct unreimbursed work expenses like uniforms and equipment; those out-of-pocket expenses are yours to handle.
You sign a contract with a gym
Now, let’s say the gym doesn’t hire you as an employee. Instead, you negotiate services and pricing with the gym and sign a contract formalizing the terms of the agreement. The contract will usually include information about how revenue will be shared, and whether or not the personal trainer will pay a fee to essentially rent the space for training sessions.
Independent contractors are different from employees in that the gym or fitness center doesn’t pay wages or withhold taxes. Instead, they will simply keep whatever their portion of the pay is (as per your contract) and deliver yours.
Since you’re not an employee of the gym, you’re considered self-employed. You’re also responsible for paying taxes throughout the year in the form of quarterly estimated tax payments, and if you don’t make those payments in a timely fashion, you could incur a penalty.
As an independent contractor, you will get a Form 1099-MISC at tax time instead of a Form W-2. The 1099-MISC will list income details as “non-employee compensation,” and this information is reported to the IRS as well. Double-check your 1099-MISC—it should only include your portion of what the trainees paid.
Independent contractors can deduct work-related expenses from income, which will help reduce your tax bill. You can even deduct the gym’s portion of the revenue from your training sessions, since that’s how you pay for equipment and space.
You’ll also owe self-employment (SE) tax if you make more than $400 during the year—but you can deduct half of your SE tax as an above-the-line deduction on Form 1040, Schedule 1.
Keep good records and receipts of all your income and expenses to back up what you report on your taxes. When it’s time to file, include all your income and expense information on Schedule C.
You’re hired directly by your trainees
If your contract is only between yourself and your trainees, congratulations: you’re a full-fledged self-employed personal trainer. You may still have sessions at a fitness center or gym, but you don’t contract your services or split revenue with the gym itself. Instead, you bill trainees directly and either rent the space or pay your own membership fees.
Since your trainees are individuals, not businesses, they won’t be sending you a Form 1099-MISC. But you’re still responsible to report earnings on your tax return and pay taxes throughout the year with quarterly estimated payments. You'll also owe SE taxes, so be sure to carefully document all your income and costs to back up everything you report to the IRS and your state (if applicable).
Self-employed personal trainers have great control over their schedules and careers, but they also have some pretty significant work-related expenses, including:
- Health and liability insurance
- Gym membership fees
- Exercise and workout equipment
- Diagnostic tools that measure weight, muscle, fat, endurance, and so on
- Wage expenses if you hire your own employees
It’s a good idea to set up a business bank account so that you can easily distinguish between your work and personal funds. That way, when expenses come up, you can use your business account and easily track deductible expenses.
Just like with independent contractors, your income and expense information will be reported on Schedule C, except for your health insurance bills. You’ll deduct self-employed health insurance on your Form 1040, Schedule 1.
Whatever your situation, 1040.com makes it easy
Personal trainers are no strangers to the grind, but save it for the gym. Filing your taxes with 1040.com should be the easiest part of your day, even for independent contractors and self-employed trainers. If you get stuck, reach out to our support team. We’re always happy to help!
Got any more questions about taxes for personal trainers? Let us know in the comments.
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