Leveraging Business Expenses for Personal Trainers
Now that you are a business owner, it’s time to start talking about finances. There’s a lot of behind-the-scenes work that goes into keeping your business running and if you don’t pay attention to your finances, it could be the reason you go out of business.
It’s not easy; it requires a lot of willpower and dedication. You need to know the difference between a personal budget, and a business budget. The difference between revenue and profit. Your take-home vs your employee wages, that is if you choose to have employees. Most importantly, tax deductions. Tax deductions could be the difference between paying thousands of dollars in taxes or paying practically nothing.
What happens once tax season comes along, and you find yourself short on cash because you weren’t prepared? Thankfully, you don’t need to do any of this alone. Persona is here to help you. Throughout this article, I’m going to explain what kind of things to look for when you manage your business expenses, and what Persona can do for you.
Personal budget vs Business budget
There’s a difference between your personal budget and your business budget. A personal budget is the amount of income you want to take home to cover your personal expenses. A business budget is the amount of revenue you want to take in to cover your business expenses including taxes.
Your personal budget includes but is not limited to:
- Rent/mortgage/household appliance bills
- Phone bill
- Internet bill
- Health insurance
- Personal trainer insurance
- Car insurance
- Gas for your vehicle (personal use)
Once you have all your essential bills figured out, you can start adding in the non-essentials.
- Entertainment (Going to the movies, going out to eat, concerts, etc.)
- Subscriptions (Netflix, Hulu, Spotify, etc.)
- Clothing/shoes (personal use)
- Extra money for savings.
Once you have all those items listed out and added together, you’ll have the total amount of income you need/want at the end of each month. Preferably after taxes.
What about business budgets?
Your business budget includes but is not limited to:
- Location fees and taxes (If you own or rent the building you run your business out of.)
- Equipment costs
- Gym fees
- Work clothing/uniforms
- Employee wages/salaries
- Gas (if you to travel to different locations)
- Personal trainer insurance
- Personal trainer certifications
This is only a small list of the potential business expenses. Depending on your business, it could differ. Once you total up your business expenses, that’s the amount of revenue you’ll need to keep your business running.
Identify your profit and identify your loss. Your profit would be the amount of money you make from your business. Your loss would be the amount of money you spend on your business.
Once tax season rolls around, this is where things get more complicated. You’ll need to understand your federal, state, and local tax requirements and be prepared to pay these taxes by your state’s required due dates. As it happens, you should know that in some cases you have to file taxes four times a year as a personal trainer.
- Employer Identification Number (EIN)- You receive a federal tax ID number once you register your new business.
- Income tax- The amount of money withheld from your income.
- Self-employment- You’ll need to pay Social Security and Medicare taxes when you’re self-employed.
- Employment- If your business has employees, you’ll need to pay their social security, federal tax withholding, and federal unemployment so that they will be covered if they ever lose their jobs.
- Excise- The government taxes businesses that manufacture or sell certain products. Or if you use certain products, use certain equipment, and/or use certain facilities.
- Property taxes- Some states will collect property taxes from businesses in commercial real estate locations, vehicles, computer equipment, and/or business assets, depending on the total value.
- Sales and Use tax- Your state may tax the sale of goods and services.
- Estimated tax- You may have to pay the estimated tax if the amount of income being withheld from your salary, pension, or other forms of income is not enough to cover the initial income tax. This would include income from self-employment, interest, and dividend.
A tax deduction is a deduction that lowers a business’s tax liability by decreasing its taxable income. Meaning that once you deduct your business expenses, you’ll be paying much less in taxes.
Some deductibles include:
- Equipment and gear costs
- Music and exercise videos- The amount of money you pay for workout videos and/or music subscriptions such as Spotify. (If you use either during business hours or for business use.)
- Internet and cellphone bill (if you use either for business use.)
- Vehicle- the miles you use when you travel to and from clients.
- Work clothing/ uniform costs
- Entertainment and meals – if you provide meals, go out to eat, and/or host an event for your employees and/or clients.
Persona and You
As you read this, you might be thinking that it all sounds really confusing. A lot of different elements go into managing your business’s expenses. You need to figure out your desired/expected income and revenue. Not to mention taxes and tax deductions. Thankfully, you don’t need to do any of this alone.
Persona is here to help you and here are some of the features Persona provides for a hassle-free experience.
- Tax Savings
With the help of our AI engine and the built-in business expense tracker, we can save you money by organizing your tax deductibles. All you need to do is let us know what business-related expenses you made.
By simply swiping right, Persona will tag the expense as a business expense. You can watch your taxes reduce in cost as we process your deductibles. We will alert you on how much taxes you’re going to owe and will provide that information whenever you request it.
Persona makes saving for taxes easy; once inside the Persona app, navigate to the “tax” page and toggle the “tax withholding” feature. From there, we will automatically collect a portion of your future business revenue and place it in your tax bucket. Your tax bucket will always be accessible to you, and you can deposit or withdraw the money instantly and whenever you want.
- Automatically generate tax forms
With only a click of a button, Persona will generate a 1040 and Schedule C. With your request, we will also transfer the tax amount owed to the IRS. At Persona, our goal is to keep things easy and hassle-free with no added stress so you can focus on your business and get more personal training clients.
- Business account
Persona will keep your money safe in your business account, easily accessible by your Persona visa card. Your visa card will be shipped to you as soon as you sign up through the Persona app. Once you receive the card, you’ll be able to activate it and set a pin so that you can use it at an ATM. Whenever you use your Persona visa card, you’ll get up to 10% cash back on purchases! With your Persona business account, you’ll be able to easily wire money to any other bank account as you see fit.
As I conclude this article, I would like to review some of the points made. As a business owner, you can’t be too tentative about your business’s financial needs. If you don’t properly prepare yourself, once tax season comes around, you’ll find yourself trying to scrape together the money for the IRS. Don’t let yourself end up in a financial hole.
Allow for Persona to help with all your financial needs and get you ready for taxes. In your Persona business account, we will process your deductibles and save a portion of your revenue for taxes. You’ll have full access to your money at any given time and we will even inform you on how much taxes you will owe after the deductibles.
We will automatically generate a 1040 and a Schedule C, and if requested we will send the taxes owed to the IRS on your behalf to keep everything easy and stress-free.
Best part? Persona is completely free with no hidden fees! Just download the app from either the Google Play store or the Apple store – we weren’t voted one of the best apps for personal trainers in 2022 for nothing.