Ok, you’re a personal trainer, and it’s tax time. Does your tax bill hit you like a ton of bricks? Chances are you’ve experienced this pain. But, there are ways you can plan so that your not working for “Uncle Sam” and paying too much of your heard earned money!
The first thing to consider is how you’re getting taxed–as an employee or contractor? If you just filed taxes, then this is easy to find out. If you received a 1099, then you are a contractor. if you received a W-2, then you are an employee.
What’s The Difference?
If you are a contractor getting a 1099, you are technically self employed. Meaning, that you will owe self employment tax on whatever your net income is. This also changes how you file your tax return by requiring you to report your income, and any expenses associated with that income, on a business form called Schedule C.
Getting a W-2 is inherently easier. You report the W-2 as wages, and there is no self employment tax.
Which One Is Better?
There is a good, and a bad list to each one. If you’re detailed, you can save a lot of tax by being self employed. However, it’s much less complicated to receive a W-2 and report the wages. Whatever you’re preference is, there are ways to make sure you’re minimizing your tax.
If you need help or have questions, feel free to reach out or leave a comment! If you have friends that would find this useful, tweet, share, plus this over to them!