Awesome tax quote
Yes, there are awesome quotes about taxes, too. :-)
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Judge Learned Hand, Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934), aff'd, 293 U.S. 465 (1935).
See! And isn't the judge's name as awesome as his quote?
Where are you getting your information?
Filing your tax returns is a serious business.
The information you rely on should not be based on a Google research from unreliable sources.
If you are relying on ANY resource, take an extra moment to review the author's credentials.
Does he or she have the relevant educational and/or professional background and experience?
You can read about me here.
Tax Write Offs for Yoga Teachers
I have two offerings for tax deductions for yoga teachers.
If all you are looking for is a simple list of tax deductions (write offs) common for yoga teachers, you can download the free bullet list.
If your yoga business is more established and you are looking for more professional information, you can purchase the 25-page eBook.
Many of you have found the bullet list of the tax deductions for yoga teachers (above) to be very helpful. Thank you for your positive feedback!
Many of you have also asked for more details and guidance on each of these tax deductions since they are not so straight forward as one would hope. After all, we're talking about taxes. So I promised to write an eBook addressing these deductions a little more in-depth.
And it's finally here!
Here are some questions and answers.
Who wrote this?
I'm a yoga teacher and a tax attorney who has been disheartened by the lack of quality and relevant information for yoga teachers (and wellness professionals at large).
You can read more about me (including my credentials) here.
Who is it for?
This is an eBook written specifically for you, yoga teachers, so you can maximize the tax deductions you are legally entitled to when calculating your business profit and the taxes you owe.
It can also be used by other wellness professionals. At least two families in our audience each own a martial arts studio.
I already have a CPA. Why would I need this?
I'm glad that you are working with a professional tax preparer. After all, not everyone finds tax (or law) to be as interesting as some of us.
Some of the teachers I spoke with told me that while they have been working with a CPA (some for a very long time), they didn't necessarily feel comfortable asking questions to their CPA.
Here is an opportunity to arm yourself with very specific and relevant information for your yoga business so you can gain clarity on exactly what information to organize and submit for preparation.
This eBook will help your team help you.
What laws apply?
This eBook is written based on the tax laws of the United States for tax year 2017.
I will update this specifically for tax year 2018 and offer a special discount to those who purchased the earlier version.
When are the taxes due, anyway?
The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018 (unless you extend).
Otherwise, you can apply for an automatic extension to file your tax returns by filing the Form 4868. "Automatic" means you get it if you apply for it. If you file for an extension, your return is due 6 months later, October 15, 2018.
However, this is an extension to file the tax return. It is not an extension to pay the taxes you may owe. Otherwise, everyone would extend! If you owe taxes and do not pay by the April deadline, you will owe penalty and interest charges.
What's included in the eBook? Can I take a peek at the eBook?
Of course. Here is the table of contents so you can see exactly what is included.
How much is the eBook?
Your investment is $25.
Great news! This expense is a tax deductible business expense. 😍
Why should I buy this when there is so much free information online?
That is a very reasonable question. Let me explain.
Yes, there are a ton of articles and websites available for free out there. I've seen them myself and also been told by other teachers that there are endless inaccurate tax tips out there.
Generally speaking, you get what you pay for. So what are you getting when your tax information comes from Google search results, word-of-mouth from a fellow yoga teacher, or even an article written by a seemingly reputable source?
For instance, this TurboTax article has been circulated among many yoga teachers as a reliable source of information. After all, it is written specifically for yoga teachers and instructors.
The article states that "Yoga apparel for teaching your classes" is deductible (at least as of March 26, 2018).
Do you know what the Internal Revenue Service (IRS) says?
Work Clothes and Uniforms
You can deduct the cost and upkeep of work clothes if the following two requirements are met.
- You must wear them as a condition of your employment.
- The clothes aren't suitable for everyday wear.
Then it goes on and on about the topic, which, you probably don't want to read.
On this topic, I've written the content as follows:
Contrary to the popular (or perhaps hopeful) belief, yoga apparel is not deductible.
You can deduct the cost and upkeep of work clothes if: (1) you must wear them as a condition of your employment and (2) the clothes are not suitable for everyday wear.
Considering especially how fashionable yoga clothing is, yoga apparel does not meet this definition of deductible cost and upkeep of work clothes.
See how much easier this was?
With this eBook, you can have relevant and specific information written by someone with the necessary professional and personal background.
It is written very recently to file your tax return for 2017 (not written years ago).
Plus, it can be downloaded immediately after your purchase so you don't have to send questions and wait for answers or set up an appointment with a qualified tax professional.
You can gain clarity and confidence in your tax deductions by making a small investment for your business.
What if I have more questions about this eBook?
Please send me an email at firstname.lastname@example.org.
I have gathered and responded to some additional questions on various group chatrooms on Facebook.
For everyone's benefit, I've listed the questions and my responses below. Please note that I've paraphrased questions in order to keep only the essential parts and also to protect the privacy of the individual asking the question.
DISCLAIMER: Everything on this website is provided to you for informational purposes only and as such, it does not constitute legal advice or tax advice and it does not create an attorney-client relationship between us.
I keep hearing conflicting info from teachers that our initial training is able to be written off, but seeing your information, it says it is not. Is it pretty much going to come down to what my tax person can do? Thank you 🙏
I work full-time as a salaried employee and teach yoga on the side as an independent contractor. What do I need to know regarding filing my tax returns?
Many yoga teachers are part-time yoga teachers and work as independent contractors.
According to the 2016 Yoga in America Study by Yoga Journal and Yoga Alliance, “[n]early half of all yoga teachers and trainees report being independent contractors” and only 29% of the yoga teachers in the United States considers income from teaching yoga to be their primary source of income; 30% considers teaching yoga a part-time job; and 33% considers it a hobby.
Personally, that's my situation as well!
In terms of filing your tax returns, if you work full-time as a salaried employee, you will receive a Form W-2 for tax year 2017 (if you haven't already). As a yoga teacher working as an independent contractor, assuming you have met the filing threshold ($600 for 2017), you will receive a Form 1099-MISC from the place you teach. All income and expenses related to your yoga business will be reported on Schedule C, Profit or Loss from Business (Sole Proprietorship).
The net profit or loss then flows into and make up a part of the main tax return form, Form 1040, U.S. Individual Income Tax Return.
In short, the calculations of your business net income or loss will be done independently and then, the net amount will flow into the big picture.
What deductions, if any, are acceptable for me to claim against my yoga business?
Whether you are a full-time or part-time yoga teacher, you are entitled to take (write off) all legitimate business deductions.
The fact that you work full time as a salaried employee at another job or profession does not impact your ability to take business deductions.
Do the tax deductions apply if you are a part-time only employee?
Unfortunately no. These tax deductions are available to self-employed taxpayers (e.g., working for yourself by teaching private lessons and leading workshops and working as an independent contractors for a studio and receiving a Form 1099 for your work).
While it is too late to change your work portfolio for 2017, if you only received a Form W-2 as an employee in 2017, my recommendation is for you to start working for yourself by adding more yoga offerings to your portfolio. Teach a private lesson or two. Offer workshops. Really get out there and provide other offerings to show that you are indeed self-employed. These offerings will provide tax deductions that offset the corresponding income.
The owner of the studio where I teach said she thinks I do not need to claim anything $400 or less. I made exactly $400 in 2017. Do I need to claim it or not?
She may be thinking of whether or not SHE must issue you a Form 1099-MISC as you likely worked as an independent contractor. This form is used by the payer to report non-employee compensation to the payee (as shown on Box 7), among other types of payments. Yoga teachers working for a studio as an independent contractor would receive this form if the filing threshold is met.
The threshold for tax year 2017 is $600 so the studio owner in this case does not have to issue you the form.
Whether or not you claim the compensation depends on your overall tax filing obligations (i.e., do you have to file a tax return for 2017?), which is highly personal to your situation! Here is the Interactive Tax Assistant on the IRS website to help you determine if you have a filing obligation for 2017.
If yes, you must file a tax return and must include this income in your tax return.
Including this income in your tax return allows you to take the tax deductions (also known as the "tax write-offs") that you would like to claim for ordinary and necessary business expenses you incurred to work as a yoga teacher during 2017. Depending on what expenses you incurred, you may be able to offset the income substantially or completely.
How about 2018 taxes?
It's good that you are planning ahead.
If you are a sole proprietor as most yoga teachers are, your business deductions that are being reported on Schedule C have not been impacted.
Of course, there have been many changes impacting business entities and other deductions reported on Schedule A (e.g., medical expenses and limit on the state and local tax deduction).
If you are a sole proprietor and bringing in a significant income through your offerings (I'd say $100,000 or more), it would be worthwhile to engage a qualified tax professional to review your tax profile at a holistic level (i.e., business and personal) and do some tax planning.
Scheduling a tax strategy session with me would be the first step.
Tax and legal matters are highly personal in that what is best or appropriate is dependent on facts specific to you.
One-on-one strategy consultation is available in order to help you gain clarity and confidence.
We can meet via Zoom (on your computer or mobile device) or on a call for one hour.
I'm sorry but I'm not offering tax return preparation services at this time. But I'm happy to answer your questions, discuss strategies specific to your situation, and guide you to practical recommendations and solutions during our consultation.