Maintaining accurate records of your income and expenses can transform your yoga teacher business for the better. From staying organized for tax season to gaining valuable insights into your daily operations, tracking your income and expenses is a habit worth establishing.

Whether you’re coaching your clients to healthier futures or taking some deep breaths yourself as you handle the business side of being a yoga teacher, there’s no doubt that you have your hands full.

One area that can be particularly challenging for yoga teachers is keeping detailed records of their income and expenses. While this is a vital piece of the yoga teacher puzzle, it often falls to the wayside amidst all the other responsibilities and passions you have.

Detailed record-keeping is essential during tax season, but the benefits of establishing this habit and sticking to it extend year-round.

KEY TAKEAWAYS: 

• Keeping organized records makes tax filing easier and more accurate
• Tracking income and expenses helps you budget and save for retirement
• Understanding cash flow allows you to make better financial decisions
• Using bookkeeping tools simplifies tracking and reduces errors
• Saving receipts ensures accurate deductions and tax compliance
• Knowing which expenses are deductible helps lower your tax burden

Tracking Income & Expenses As A Yoga Teacher

Why Tracking Your Yoga Teacher Income and Expenses is Important

Keeping detailed records of your income and expenses is tedious, time-consuming, and can be difficult to do consistently–especially if you already have a busy schedule. However, it is worth the time and effort when you consider the advantages having such records can provide.

So, if you’re looking for a compelling reason to start tracking your income and expenses, you’ve come to the right place. Read on for the top reasons you should keep detailed records (and how to do exactly that).

Tax Purposes

When tax season comes around, detailed bookkeeping can streamline the entire process and keep you as stress-free as possible throughout it. This is one of the most compelling reasons to track your income and expenses, especially if you are self-employed or plan to tackle your taxes alone.

Even if you work with a tax professional, the records you keep can be the difference between a smooth tax season and one filled with confusion or rushing to track down the information you need. It also ensures that you have set aside the right amount of money to pay your quarterly taxes.

Saving For Retirement

If you are an independent contractor, you are responsible for funding your retirement. Tracking your expenses gives you the insight you need to prepare for your future and put aside money for your retirement account.

Without a solid understanding of your income and expenses, you may be left with insufficient funds to contribute to your retirement. Staying on top of your bookkeeping helps avoid this outcome and gives you the financial knowledge you need to invest wisely.

Understanding Your Cash Flow

Speaking of keeping tabs on your finances, tracking your income and expenses gives you invaluable insight into your cash flow. You can use this information to better understand your business, pinpoint areas of success, identify where you can improve your spending, and make informed decisions moving forward.

Knowing where your money is going is absolutely critical to your success as a yoga teacher, so don’t overlook this benefit of detailed record-keeping!

How To Track Your Income & Expenses As A Yoga Teacher

Knowing why you should keep thorough records of your income and expenses is one thing; knowing how to track them in an efficient and organized way is something entirely different. Thankfully, it doesn’t have to be difficult, overwhelming, or time-consuming.

By utilizing the following tips, you can keep tabs on your income and expenses with ease.

Using Bookkeeping Software To Track Income & Expenses

One of the best ways to track your income and expenses as a yoga teacher is to utilize bookkeeping software. There are multiple options available these days, and most of them include tools that allow you to seamlessly integrate them into your workflow and streamline everything from your billing to your business spending.

Software like QuickBooks and Xero are popular among independent contractors because they provide full-featured suites that do a majority of your record-keeping (and daily business functions) for you. This not only ensures accuracy but also removes the pressure from you. Imagine all the time and energy you’ll have to allocate to other aspects of your business (and your life) with those responsibilities lifted from your shoulders!

Alternatively, you can keep your income and expense tracking simple by using an Excel or Google Sheets document to note your payments received (from all sources), outgoing expenses, and the receipts associated with running your business.

Keep Your Expense Receipts

We’ve mentioned the importance of keeping your receipts a few times, and it’s worth noting again. As you track your expenses, you will want to hang onto receipts related to your business operations. This ensures that the information you record is accurate and lends legitimacy to any deductions you claim on your taxes.

In the age of online purchases, this can be easier said than done, but once you establish the habit of keeping receipts, it will become second nature.

Know What Qualifies As Deductible Expenses

As a yoga teacher, you will undoubtedly have purchases that are directly related to your ability to run your business. The expenses associated with these necessities can be deducted from your income on your taxes, effectively lowering the amount of tax you’ll pay.

If this sounds like a great way to keep a little extra money in your pocket, you’re spot on. However, you must keep extremely detailed records of your spending and know what qualifies as a deductible expense and what doesn’t.

Every business is different, and we recommend discussing your potential deductions with a tax professional. That said, expenses that fall into the following categories typically qualify as deductions.

• Yoga teaching supplies, including props and mats
• Continuing education and yoga teacher training
• Yoga teacher liability insurance
• Rental fees for your studio
• Costs associated with marketing, including website hosting