Tax Deadlines and Government $$$ Updates for Gyms & Boutique Studios

Tax deadlines for gyms 2021

Should you extend your business tax return this year, and what government funding is still available?

These are a few of the questions we’ve been asked recently here at The Fitness CPA. 

The answer? It depends. 

Our goal here is to answer some of your tax questions as a fitness business owner and look at a few ways to receive more funding, if necessary.

Let’s dive in. 

Skip ahead if you’d like: 

 

Tax Filing Deadline Extended

In case you hadn’t heard, individual tax deadlines were extended to May 17, 2021.  While this short extension was helpful, many taxpayers need more time to file.  If you need more time to file, be sure to file form 4868 Extension for more time to file or just ask your CPA to file an extension electronically for you.  Filing the form gives you until October 15th to file your individual income tax return.

An extension to file is not an extension to pay.  So if you think you might owe, send in what you think you may owe.  Not sure if you’ll owe or don’t have the cash?  Interest rates are at historic lows so we wouldn’t sweat it.  You might owe “tens of” dollars or a couple hundred bucks of interest if you pay later this year.  But don’t forget to file the extension form even if you don’t owe, otherwise there can be very costly late filing penalties (think several hundred or even thousands of dollars).

 

Good Reasons to Extend Your Tax Return

Many states are now retroactively deciding that PPP funds are not taxable.  California recently decided just last week.  Illinois is set to decide later this month.  Our advice?  If your state is still taxing PPP funds (as of 5/6/2021 MN, NH, VA, NC, FL, TX, UT, NV, CA, WA, OH, HI), file an extension and wait to see if it changes this Summer.  Our bet?  More states will change their rules retroactively so hang tight and do not file.  Already filed your return?  You can amend, though that usually costs more tax preparation fees.  So you’ll need to see if the tax savings are worth more than the fees to adjust your tax filings.

FCPA Tip: Wait to file your business tax return if your state has decoupled from the IRS PPP rules.  You may save hundreds or thousands by waiting.

 

PPP Funds Exhausted and Program Sunsetting

Set to expire May 31st, funding for the PPP program was exhausted this week about three weeks before the program was set to expire.  If you haven’t yet claimed all of your PPP 1.0 or PPP 2.0 funds, you’ll want to follow the news and see if congress provides more funding to the program to see if you can still get in.  Among our client base, we found many didn’t think they qualified for either round of funding, but upon a closer look were eligible for thousands.

FCPA Tip PPP 1.0: every fitness business.  If you didn’t obtain these funds you definitely should if more funding is allocated to the program so you can get your share of the funds.

FCPA Tip PPP 2.0: Your business had to have a 25% reduction in revenues for a quarter in 2020 compared to a comparable quarter in 2019 to qualify.  Run the math or have your accountant run the math to be sure you’re not missing out.  Here’s the template we use for our clients.

If funding does open back up, we like the team at A10 Capital (ask for Steve Hoffhine). We are not affiliated in any way with this company.  They just provide good service and get our clients the money they deserve.

 

Need $$$? Get More EIDL Funding

Still not out of the woods yet? Still trying to recover from the pandemic? You’re not alone. Tens of thousands of fitness businesses across the US are still struggling and have bills piling up. Our advice?  Get more funding if you need it.  While we aren’t big fans of going into more debt, desperate times call for evasive maneuvering.  The EIDL program recently raised its maximum loan amount from $150,000 to $500,000.

How to get more funding: log into your online SBA portal to make the request.  If you previously sent an email to the SBA, be sure to redo the request in your portal as they have updated the way to request more funding.

FCPA Tip: Only borrow what you absolutely need.  If you can keep the total loan less than $200,000 there is no personal guarantee.  Amounts over $200,000 require personally guaranteeing the loan.

 

EIDL First Payment Due Date Extended to 2022

Good news for EIDL (Economic Injury Disaster Loan) borrowers.  Payments originally scheduled for  2021 have been extended to 2022.  That gives fitness businesses more time to add back members and make a debt payback plan. The statements you’ve been receiving in the mail should already or will soon reflect the extended due date.

FCPA Tip: Your business should have a plan for how much you can pay down on your loan each month and that it fits into your budget. Don’t have a cash flow plan? Check out NPE’s programs specifically designed for fitness businesses to help jumpstart your fitness business.  Spoiler alert: one of the first tasks is getting a handle on your cash flow and making a plan for your money. Don’t delay.

 

What’s Next?

Accounting and taxes are never boring for successful business owners, but it’s been unusually exciting these past 14 months.

As we continue to push through to the end of tax season, we’ll be sure to keep you posted of any new changes that come up surrounding government funding and new legislature.

When we come up for air in June, we have a lot of content planned that will help you save thousands of dollars for your gym or fitness studio, and help get back on your feet post COVID-19.

You can stay up to date by following us directly on our blog for the latest news by joining here. (no spam, just good content, and we never sell or share your information).

In the meantime, you can check out a few of our most recent posts on Getting More Leads With Google My Business and our thoughts on Opening a Gym in 2021 – Part I.

Until next time.

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