Your Pilates equipment costs you money, and it also makes you money. In the midst of tax season, when you are finally ready to consider your assets, take some time to get organized. The following questions and answers relate to Pilates equipment purchased for use in a studio and are by no means comprehensive. Rely on the advice of a trained and trusted financial adviser before filing your taxes.
Equipment cost is simply the amount you paid for it. The cost of new equipment gives you a tax deduction in the form of depreciation, an often overlooked advantage.
What Is Depreciation?
Depreciation is a decrease in the value and usefulness of an item over a determinable length of time. To be eligible for a tax deduction, the item needs to be owned and used in the business and have an estimated usefulness of over 1 year. Independent contractors’ income tax returns show depreciation as a deduction within Schedule C (Profit or Loss From Business). Once you’ve fully depreciated the equipment, you can claim no further deductions unless you replace your equipment.
The cost of repairing your apparatus for use or sale is also tax deductible. Service maintenance fees are tax deductible too. Keep a trail of your paperwork, as well as a bill of sale, even on used items. Include the purchase date, a description of the goods and the sale price.
It’s easy to sell a Gratz reformer in New York City but hard to sell anything in Montana. In today’s market, plan on waiting 30, 60 or 90 days to sell an item if you want to get the highest value. If you’re in a bind and need to get rid of some of your assets, contact teachers and certification programs affiliated with the equipment brand. You’ll be more likely to get higher offers.
Be prepared to put a lot of time into selling, unless you find a broker who will liquidate everything for you at a percentage. The Pilates Tech (www.thepilatestech.com) will pack your equipment for storage (tax deductible) or ship your equipment to a buyer in another state.
Find out exactly where you are financially by making an appointment with a tax accountant and exploring your options.
For more information, please refer to the complete article, “Realizing Tax Benefits From Pilates Equipment” in the online IDEA Library or in the February 2011 issue of IDEA Pilates Today. This e-newsletter has been specifically created for the Pilates community. Articles include case studies, advice on Pilates studio–specific business matters, help with equipment maintenance and programming ideas, information on teaching skills and advanced cuing techniques and interviews with Pilates experts from all lineages and backgrounds. Visit www.ideafit.com/idea-pilates-today for more information. If you do not currently receive IDEA Pilates Today and would like to, contact IDEA member services at firstname.lastname@example.org to find out about upgrading your membership.