You run group classes, in-home clients, and a digital program. Three different tax stories on one Schedule C. We pick the right entity, expense the rack, and keep the digital sales tax compliant in all 50 states.
A boutique gym is part service business, part equipment-heavy capital business, part SaaS. Most preparers treat it as a sole prop and call it a day. That leaves $20K+ a year on the table.
Racks, plates, rowers, bikes, treadmills, sound system, mirrors, mats. Up to $1,160,000 of §179 expensing for 2024 plus 60% bonus depreciation on the overflow. A full box build-out of $80K can be fully expensed in year one. We time the buy against year-end income.
IRC §179; §168(k); Rev. Proc. 2023-34Drive to client homes, the park, the gym from your home office? Business miles between client sites are deductible at 67 cents per mile for 2024. Contemporaneous mileage log required. We set up MileIQ or a similar tracker so the audit-defensible record exists.
IRC §162(a); §274(d); Notice 2024-08; Rev. Proc. 2010-51Selling online programs, app subscriptions, recorded workouts? Approximately 25 states tax digital products. Wayfair economic nexus thresholds are typically $100K or 200 transactions. We register where you owe, file the returns, and stop the surprise back-tax letter.
South Dakota v. Wayfair; state digital goods sales tax statutesIf you set the schedule, brand the class, take the booking, and process the payment, your instructor is probably a W-2 employee under IRS SS-8 factors and state ABC tests. We rebuild the contractor agreement to actually look like independent work, or we move you to W-2 cleanly.
IRC §3121(d); Rev. Rul. 87-41; Form SS-8NASM, ACE, CrossFit Level 1 and 2, RYT-200, RYT-500, nutrition and mobility CE. Ongoing education that maintains or improves the skills required for your business is fully deductible §162. Initial certification to enter the field is generally not. We split it correctly.
IRC §162(a); Treas. Reg. §1.162-5; §274(d)At $150K+ of net income an S-Corp election starts saving real self-employment tax. Stack a Solo 401(k) or SEP and you can shelter another $69K. At higher income a cash balance plan takes another $50K to $150K off the top. We model it before you elect.
IRC §1402(a); §401(a); §404(o); Form 2553Boutique gym owner, sole proprietor, $215K net income 2024. We elected S-Corp status mid-year, set a reasonable wage, opened a Solo 401(k), and ran §179 on a $42K equipment refresh.
$24,000 savedCombined self-employment tax savings from the S-Corp election, federal tax savings on the retirement contribution, and §179 deduction on the new racks and rowers. State savings on top.