Taxes are no fun. They’re something that we put off all year until April rolls around and they become a quick necessity and an annoyance. Taxes as a contracting yoga teacher are more manageable and less scary than they may seem leading up to April, however. The one thing all yoga teachers need to keep in mind is to keep track of almost everything. This sounds ultra-annoying, but a little work throughout the year means less digging for information at tax season.
Unfortunately there is no shortcut to filing taxes when working for yourself as a yoga teacher. Whether you work part-time now and again, or fill your weekly schedule up with as many classes as you can, you will need to keep track of how much you worked, where, what you spent to do your job, and how much you made, of course. It can be easier than it seems.
One thing that helps is to keep track of all of your classes, taught and classes attended. Keeping track of hours taught is beneficial for two reasons. One, you can add up your teaching hours and eventually use them to increase your yoga teacher title from RYT (registered yoga teacher) to E-RYT (experienced registered yoga teacher). The second benefit is that you can look back at your calendar and track your driving mileage to and from class to be deducted. Miles to and from classes and trainings taught and/or taken can be tracked and used as deductibles.
The rule on deductibles is: They must be both ordinary and necessary. Ask yourself what you need to teach yoga and if those things are common necessities for all yoga teachers. For example: yoga mats, clothes, and trainings. By clicking the hyperlink you will find an article by Turbo Tax which goes into detail on this.
Other business expenses might include accommodation during weekend long workshops as well as meals out during those trips. Keep track of spending during such cases by using a consistent credit card that continuously tracks spending, keeping receipts, or by keeping paper records. My credit card offers a year-end summary that is very handy to double-check my spending, specifically business spending, which I printed out and highlighted before filing my taxes. My credit card, (Capital One Venture) also earns travel points and has no international fees. Perfect for international yoga retreats.
When working for multiple studios or for companies teaching corporate yoga, you will receive a 1099 from each employer as long as you earned more than $600 in the year. The 1099 is a form that you will have filled out when you started the job and at the end of the year the employer will send you the completed 1099 with your year-end earnings to be used for filing. Keep track for yourself so you can check for mistakes. One thing to keep in mind, if you send an invoice at the end of December but are not paid until January for that work, then the money paid to you in January will be applied to your following year’s earnings.
Final tip, find a tax professional to help with taxes. It may seem as if taxes are a DIY item, and they may very well have been for you for the majority of your life, but with the complications of working for yourself and juggling multiple studio employers, taxes may no longer be self-manageable. Plus, by hiring a professional you will be able to relax knowing that everything is by the book and that you will be receiving the largest possible refund.
Follow hyperlinks for more information. This article does not constitute as legal, professional tax advice, for the real deal find a tax professional.