Just like many other specialized professions, coaches and personal trainers can benefit from some specific tax deductions. Here's an up-to-date guide on tax deductions for coaches and personal trainers.
If you're a coach or a personal trainer, you can take advantage of a few tax deductions this tax season — despite some rule changes from tax reform.
Prior to the 2018 tax reform, unreimbursed job-related expenses could be claimed as a miscellaneous itemized deduction. These expenses were subjected to the 2% AGI threshold as well. But this provision has been suspended for tax years 2018-2025.
On the other hand, if you work for yourself outside of a school setting, or inside one and spend your own money within certain limits, you may qualify for some tax deductions for coaches or personal trainers.
The Educator Expense Deduction
A major distinction exists between coaching a school team as an employee and coaching your neighborhood's Little League team as a parent or volunteer. If you're a school coach who also teaches, you might be eligible for the Educator Expense Deduction if you worked for the school at least 900 hours during the academic year.
You can claim this deduction regardless of whether you want to itemize or claim the standard deduction.
- You can claim up to $250 for expenses that you personally purchase for the team as an Educator Expense Deduction, as long as the school doesn't reimburse you for them.
- You must also be an educator to qualify for this deduction — meaning the school employs you to teach or instruct.
For 2021, you can also deduct up to $250 (or $500 if filing jointly and your spouse also works as an educator) in personal protective equipment costs.
What else can coaches, personal trainers, and fitness coaches deduct?
Aside from $250 in work-related educator expenses, you can also claim expenses if you work as a self-employed person. Prior to tax reform, you could deduct unreimbursed work-related expenses subject to a 2% threshold as an employee, but Congress discontinued this for tax years 2018 through 2025.
The deductions you can claim as a self-employed person or small business owner include:
- Supplies and equipment
- Education and certifications necessary for you to perform your job's requirements
- Medical exams required for work
- Meals (but subject to certain limitations on business tax deductions like the one-half rule and only when away from home overnight on work-related business)
- Travel and transportation costs
- Subscriptions related to work
As a self-employed coach or small business owner, you can deduct many expenses that are both "ordinary and necessary" to your coaching work. To claim these deductions, your coaching must qualify as work — otherwise, it's a hobby.
What tax deductions are available if I'm coaching online?
You may have recently begun offering classes or sessions online to reach your clients and paid technology costs to support your trade or business. If these technology-related expenses become necessary to earn a living in your trade, you can deduct these expenses on your tax return.
Items can include costs like:
- Video cameras
- Videoconferencing software and subscriptions
- Lighting equipment
If you use these items exclusively for your coaching or personal fitness work as a self-employed person or small business owner, you can deduct these expenses while working from home. You may even qualify for the home office tax deduction. But employees no longer qualify for claiming this deduction since the passage of the Tax Cuts and Jobs Act.
In addition to being self-employed or a small business owner, you must also meet two more criteria to claim the home office tax deduction:
- Exclusive and regular use: You must use a portion of your house, apartment, or other living space regularly to conduct your work. This can also include other structures on your property like an unattached exercise studio, barn, greenhouse, or garage.
- Principal place of business: Your home office must be either the principal location of your business or a place where you regularly meet with customers or clients in person or It can also qualify if it’s used for the administrative or management activities of your trade or business.
What if coaching is my hobby?
What if you coach your town's Little League team as a volunteer? You're probably not paid for this work, so the work-related deduction and the Educator Expense Deduction aren't available to you.
In the past, you could possibly deduct some of your costs, but there were limitations since you could only claim hobby income related expenses up to the amount of hobby income. Currently, hobby-related expenses are no longer deductible.
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