As a personal trainer working on a 1099 basis, taxes may not be your favorite topic of conversation. However, understanding the ins and outs of navigating taxes is crucial to keeping your financial house in order. Here’s what you need to know.
What is a 1099?
First things first, what exactly is a 1099? It’s a tax form used to report income that doesn’t come from an employer. As a personal trainer, you’re likely to receive a 1099 if you’re working as an independent contractor, which means you’re responsible for paying your own taxes and maintaining your own records.
What taxes do you need to pay?
Working as an independent contractor means that you’re responsible for paying certain taxes that an employer would typically handle. The two primary types of taxes you’ll need to account for are federal income tax and self-employment tax.
Federal income tax is pretty straightforward – it’s a tax on your income that goes to the federal government. Self-employment tax, on the other hand, covers the Social Security and Medicare taxes that would typically be taken out of your paycheck if you were an employee. As an independent contractor, you’re responsible for paying both halves of these taxes, which adds up to 15.3% of your income.
What deductions can you take?
One of the benefits of working as an independent contractor is that you may be able to deduct certain expenses from your taxable income. Some common deductions for personal trainers include:
– Gym memberships or equipment purchases
– Liability insurance
– Marketing and advertising costs
– Continuing education expenses
It’s important to keep thorough records of your expenses throughout the year so that you can accurately calculate your deductions when tax time rolls around.
When are taxes due?
As an independent contractor, you’ll typically need to make estimated tax payments on a quarterly basis. These payments cover your federal income tax and self-employment tax liabilities for the year. The due dates for estimated tax payments are typically in April, June, September, and January.
In addition to estimated tax payments, you’ll also need to file a tax return with the IRS by April 15th of each year. Make sure to keep track of all of your income and expenses throughout the year so that you can accurately calculate your tax liability when tax season rolls around.
Navigating taxes can be intimidating, but with a little bit of planning and preparation, it’s manageable. Keep track of your income and expenses throughout the year, take advantage of deductions where you can, and make sure to stay on top of your tax payment deadlines. With these steps in place, you’ll be able to keep your financial house in order and focus on what you do best – helping your clients achieve their fitness goals.
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