Yoga Studio Retirement Plans: Solo 401(k) for Solo Instructors, SIMPLE IRA for Studios with Staff

Plan selection for yoga studios:

Owner-only studio (contractor instructors or solo instructor):

• Solo 401(k): $23,500 employee deferral + 25% of net SE income (or W-2 salary for S-Corp), up to $70,000 total
• Ages 60-63 super catch-up: additional $11,250 (SECURE 2.0)
• Roth option available: contribute after-tax, grow tax-free
• Cannot maintain once non-spouse full-time employees are hired

Studio with employees:

• SIMPLE IRA: $16,500 employee deferral + 3% employer match (or 2% non-elective)
• Low administrative cost, no nondiscrimination testing
• Must be offered to all eligible employees

SSTB gray zone and QBI: Yoga studios sit in a gray area for SSTB classification. Group fitness classes are generally NOT an SSTB (instruction, not a health care or consulting service). Private yoga therapy sessions may be an SSTB (health care). If 90% or more of revenue comes from group classes, the studio likely qualifies as non-SSTB under the de minimis rule, preserving the full QBI deduction at any income level. This matters because a QBI deduction stacked with a retirement plan contribution can reduce taxable income by 35-45%.