Boutique Fitness Studio Owner Saves $38,000 with S-Corp and Equipment Strategy
I opened my boutique fitness studio two years ago and was shocked by how much I was paying in taxes. As a sole proprietor, every dollar of profit was getting hit with self-employment tax, and my old accountant never suggested anything different.
AE Tax Advisors elected S-Corp status for my studio, which immediately reduced my tax burden by properly splitting income between salary and distributions. They also went back and accelerated deductions on all the equipment I purchased when I opened -- reformers, bikes, weights, sound system, flooring, mirrors, and locker room buildout. My old accountant was depreciating everything over seven years when much of it qualified for bonus depreciation or Section 179 in the year of purchase.
They also helped me properly deduct my startup costs. I spent tens of thousands on marketing, legal fees, branding, and lease negotiations before opening day, and my old CPA had not captured all of those expenses correctly. AE Tax amended my opening-year return to fix it.
Total savings: $38,000. I gave four stars not because of any issue with their work -- which was excellent -- but because at my revenue level, the savings are naturally smaller compared to larger businesses. The team was upfront about this and set realistic expectations from the start, which I appreciated.
If you own a fitness studio, yoga studio, or any boutique wellness business, talk to AE Tax Advisors. Even at smaller revenue levels, the S-Corp election alone can save you thousands every year.