Running a gym is awesome! You help people reach their fitness goals. But tax time can be a drag for any business owner. This guide cuts through the confusion and shows you how to save money on taxes as a gym owner.

Let’s break down common tax deductions for gyms, from the cool equipment you buy to the ads that bring in new clients. You’ll also learn how to claim deductions for maintaining your gym space and even continuing education to stay on top of your game. By the end, you’ll be a tax-savvy gym pro, ready to keep more of your hard-earned cash.

Tax Deductions for Gym and Fitness Business Owners

Several business expenses qualify for tax deductions by fitness businesses. Let’s explore some of the most common categories.

Employee Salaries and Training Costs

Salaries, wages, and employer-provided benefits are significant operating expenses for fitness businesses. These costs are generally considered fully tax-deductible. It lowers the taxes you owe.

Marketing and Advertising Expenses

Building brand recognition is a cornerstone of any successful fitness business. Fortunately, marketing tactics qualify for tax deductions — social media ads, flyers, billboards and more.

Office Supplies and Utilities

Office supplies and utilities are crucial for smooth gym operations. But these are also prime examples of often overlooked minor expenses that lead to missed tax savings opportunities.

Common office supplies like printer cartridges, paper, and toner used for administrative tasks are fully deductible. Utilities like electricity, water and internet that power your facility are also eligible for deduction.

Travel and Meal Expenses

Expenses incurred during trips directly related to your business are deductible. This includes transportation (flights, mileage), lodging, and reasonable meals consumed while travelling.

Some examples include conferences and workshops, client meetings, continuing education, etc.

Fitness Equipment, Workout Gear & Facility Improvements

Treadmills, weights, and anything clients use to get fit? You can deduct all of it in the year you buy it (thanks to Section 179 of the IRS!). For equipment costing more than a specific threshold (set by the IRS annually), depreciation lets you deduct a part of the cost each year over its useful lifespan.

Special equipment trainers use (like resistance bands) counts too. Even improvements to your gym, like new floors or paint, can be deducted! Just make sure they last a long time and make your gym even better.

However, workout clothing worn by both staff and clients doesn’t qualify.

Workout Music, Exercise Videos & A/V Equipment Deductions

Any fitness business must create a motivating workout atmosphere. Following are some ways to do that (all tax-deductible!)

• Licensing fees for royalty-free workout music used in your gym classes are fully deductible.

• Purchasing exercise videos for a wider variety of fitness classes is tax-deductible.

• The A/V equipment like sound systems, projectors, and screens, are also considered fully deductible.

Fitness Education & Continuing Education (CEU) Credits

The IRS recognizes the importance of ongoing education in the fitness industry. You can deduct the cost of attending workshops, conferences, or online courses to get CEUs that benefit your business. This includes registration fees, travel, meals (within IRS guidelines), and course materials.

The deduction applies to your staff too, as long as it helps them serve clients better.

Software Expenses

The cost of your gym management software is fully deductible. This includes accounting software, marketing automation tools, scheduling software and more.

Rent for Your Fitness Facility

Rent is often one of the biggest ongoing expenses for a fitness business. The rent you pay for your gym space is a fully deductible business expense. The IRS allows you to deduct the entire amount of your monthly rent payments, only if you use the space exclusively for business operations.

Insurance

Insurance premiums for most key policies qualify as tax-deductible business expenses. Review your insurance coverage regularly for optimal protection and tax benefits.

P.S. If you have a personal training business, you can deduct 100% of your health insurance costs from your taxes! This saves you money, but it only applies to the amount of profit your training business makes in a year.

Business Use of Car

Expenses related to business use of the car are deductible. The IRS lets you deduct car expenses in two ways:

• Standard Mileage Rate: Track business miles and deduct a set amount per mile (67 cents in 2024). No receipts needed!

• Actual Expense Method: Deduct actual expenses like gas, maintenance and depreciation.

Depreciation

Fitness assets like treadmills lose value over time. Depreciation lets you deduct a portion of that cost each year for their “useful life.” Instead of a big deduction in year one, you get smaller deductions over several years, lowering your tax burden.

There are two methods for this calculation:

• Straight-Line: Equal deduction each year over the useful life.

• MACRS: Potentially higher deductions in earlier years.

Track your assets and consult a tax professional for deductions under Section 179 or choose the best depreciation method.

Legal Fees

Legitimate legal fees incurred for business purposes are generally tax-deductible. Contract reviews, business formation, and intellectual property protection all qualify for deductions.

Having said that, we do recommend consulting a tax pro for legal defence situations.

Telephone and Internet Expenses

Landlines and business internet are fully deductible as long as you use them primarily for your business operations. This includes scheduling appointments with clients, sending workout videos, or communicating with staff.

But, if you use your phone for business purposes, the IRS lets you deduct a part of your mobile phone bill as per the documented business usage.

Tips To File Taxes and Monitor Deductions For Fitness Businesses

Here’s how to prepare for taxes and be a tax-filing pro:

Tip #1: Keep Track of Everything!

This means saving receipts for all your gym’s expenses, from new weights to printer ink. Hold onto bank statements, bills, and anything else that shows your income and spending. Good records make tax filing easier and prove your deductions if needed.

Tip #2: Group Your Expenses

Imagine all your fitness business expenses in piles. Put equipment receipts in one pile, marketing flyers in another, and utility bills in a third. This way, you can easily see where your money goes and find deductions for things like equipment or advertising.

Tip #3: Tech Can Help!

Use designated tax software to track your business income and expenses. Scan receipts and sort them into piles (categories) ready to go come April!

Tip #4: Stay Up-to-Date on Tax Rules

Tax rules can change, so it’s like keeping up with the latest fitness trends. Check with a tax pro like one of doola’s tax experts, or look online for resources from the IRS or fitness business groups. This way, you won’t miss out on any new deductions that can save you money.

Tip #5: Set Aside Money for Taxes

Like saving for new equipment, set aside some money from each month’s income to pay your taxes. This way, you won’t have a big surprise come tax time and will have the money ready to go!

FAQs

What are other good tax write-offs for gym owners?

Beyond the foundational deductions like rent, equipment, and employee compensation. Some other valuable write-offs are professional fees and home office (if applicable, with IRS requirements about dedicated space and its use).

Professional organization memberships or subscriptions to relevant fitness publications are also deductible.

Are employee salaries and benefits deductible for gym owners?

Absolutely! Employee salaries, wages, and employer-provided benefits (health insurance, retirement contributions) are fully deductible. This means the entire cost associated with your staff directly reduces your taxable income.

How can I keep track of my expenses?

Stay organized with your finances to maximize deductions and ensure a smooth tax filing process.

Maintain separate bank accounts for your business and personal finances. This simplifies record-keeping. Use dedicated business credit or debit cards for all business expenses to easily track and categorize your spending. Hold onto receipts and invoices for all business-related expenses. These documents are crucial for substantiating your deductions during tax season.

As your fitness business grows, consider talking to a tax professional. They can give you expert advice to help you maximize your deductions and pay less in taxes.

Take the Tax Stress off With doola Books

doola Books offers a simple way to keep track of your finances. Just link your financial accounts, and the platform pulls your business activity into the software. Simple reports make it easy to see how your money is being spent. Best of all, you won’t lose track of valuable tax deductions.