Tax info

[BktBallRef]

Meals aren't necessarily deductible, anymore than eating lunch everyday at your regular job is. Gym memberships aren't deductible, so I would seriously doubt that anything else associated with working out would be. It has to be speciifcially associated with officiating.

[bigwhistle]

Meals are included if your game or conference took you out of town overnight. You can take actual dollar amount or use federal standard for the city involved. Lodging is also deductable for these events also.

[grizwald]

The only things I'd caution against that I see here.

Like one person said, meals aren't necessarily deductible. They have to have a business purpose or, like Bktballref said, it's no different then trying to deduct lunch. If you take someone to lunch or dinner to have a business meeting then 50% of it is deductible. You need to make a note of who was with you and what you discussed (as well as the date and time). For example, you take an AD or assignor to lunch to discuss possible future game assignments. What is not deductible is you buying lunch for yourself while working a tournament. In the Service's eyes, you were going to have to eat lunch anyway. If being away from home is an issue, you could've packed a lunch. So they will disallow any deduction in that instance.

Out of town travel is different. They allow deductions of lodging, airfare, mileage, meals, etc... for overnight business travel. I'd have to look up the rules to give you the specifics. But I believe you can deduct a per diem, or actual expenses (like someone here said). But I'd have to go look up the rules to be sure. However I am sure that deductions are allowed for this type of expense.

While you are OK deducting clothing that you will wear to officiate. Edited part is here: Clothing is only deductible if it is clothing that you COULD only use to officiate. While they are going to allow you to deduct your striped shirts, they won't allow you to deduct socks and underwear, unless those socks and underwear are somekind of special kind that would only be useful to you while you are working (I can't think of a good example of this). The best example I can think of is myself; I have to wear a suit and tie to work everyday. I rarely wear my suits and ties outside of work (maybe a wedding or funeral). However I can't deduct my suits and ties because they are useful for those rare instances when I need to dress up outside of work. In other words the IRS isn't going to buy my story that I never wear my suits outside of work. I would have to prove that somehow. IF you are are talking about a black and white striped shirt and matching shorts, or somekind of athletic support, the argument is easy enough to make. Simple socks and underwear is more difficult. END EDIT If you are one of the unfortunate souls who is audited, never tell the auditor that you use these clothes for anything other than officiating, like working out at the gym, or playing pick up games, etc...

For any deductible expense the key will be: does the expense have a strict business purpose.

I would assume that you guys are Schedule C guys (meaning independent contractors or sole proprietors) rather than employees. In other words you don't receive a W2 for your officiating income. You either receive a 1099 or nothing at all (I could be wrong about that, I have no officials as clients).

If you are independent contractors all expenses are directly deductible on Schedule C as a direct deduction against income. (ie only the net amount of income is included in your Adjusted Gross Income)

If you are an employee it gets a little bit tricky. All unreimbursed employee expense is deductible on Form 2106. Form 2106 flows to Schedule A - Itemized Deductions, as a miscellaneous itemized deduction. Subject to a 2% floor. This means if you don't itemize your deductions and take the standard deduction instead, you get no benefit. It also means than even if you do itemize. Your miscellaneous itemized deductions must be greater than 2% of your Adjusted Gross Income, before they are beneficial.

Mike Clark
Certifed Public Accountant

[Raymond]

I'm reading this as I'm headed out the door for my tax appt. Info is greatly appreciated.

[BktBallRef]

Originally Posted by grizwald

The only things I'd caution against that I see here.

Like one person said, meals aren't necessarily deductible. They have to have a business purpose or, like Bktballref said, it's no different then trying to deduct lunch. If you take someone to lunch or dinner to have a business meeting then 50% of it is deductible. You need to make a note of who was with you and what you discussed (as well as the date and time). For example, you take an AD or assignor to lunch to discuss possible future game assignments. What is not deductible is you buying lunch for yourself while working a tournament. In the Service's eyes, you were going to have to eat lunch anyway. If being away from home is an issue, you could've packed a lunch. So they will disallow any deduction in that instance.

Out of town travel is different. They allow deductions of lodging, airfare, mileage, meals, etc... for overnight business travel. I'd have to look up the rules to give you the specifics. But I believe you can deduct a per diem, or actual expenses (like someone here said). But I'd have to go look up the rules to be sure. However I am sure that deductions are allowed for this type of expense.

While you are OK deducting clothing that you will wear to officiate. Edited part is here: Clothing is only deductible if it is clothing that you COULD only use to officiate. While they are going to allow you to deduct your striped shirts, they won't allow you to deduct socks and underwear, unless those socks and underwear are somekind of special kind that would only be useful to you while you are working (I can't think of a good example of this). The best example I can think of is myself; I have to wear a suit and tie to work everyday. I rarely wear my suits and ties outside of work (maybe a wedding or funeral). However I can't deduct my suits and ties because they are useful for those rare instances when I need to dress up outside of work. In other words the IRS isn't going to buy my story that I never wear my suits outside of work. I would have to prove that somehow. IF you are are talking about a black and white striped shirt and matching shorts, or somekind of athletic support, the argument is easy enough to make. Simple socks and underwear is more difficult. END EDIT If you are one of the unfortunate souls who is audited, never tell the auditor that you use these clothes for anything other than officiating, like working out at the gym, or playing pick up games, etc...

For any deductible expense the key will be: does the expense have a strict business purpose.

I would assume that you guys are Schedule C guys (meaning independent contractors or sole proprietors) rather than employees. In other words you don't receive a W2 for your officiating income. You either receive a 1099 or nothing at all (I could be wrong about that, I have no officials as clients).

If you are independent contractors all expenses are directly deductible on Schedule C as a direct deduction against income. (ie only the net amount of income is included in your Adjusted Gross Income)

If you are an employee it gets a little bit tricky. All unreimbursed employee expense is deductible on Form 2106. Form 2106 flows to Schedule A - Itemized Deductions, as a miscellaneous itemized deduction. Subject to a 2% floor. This means if you don't itemize your deductions and take the standard deduction instead, you get no benefit. It also means than even if you do itemize. Your miscellaneous itemized deductions must be greater than 2% of your Adjusted Gross Income, before they are beneficial.

Mike Clark
Certifed Public Accountant

Thanks Mark. Yes, you are correct, we are considered contract labor. Usually we don't receive a MISC-1099 unless we're paid more than $600 per year by a specific entity, as is the case with most contract labor situations. of course, all income is still taxable, whether there's a 1099 or not.

Correct me if I'm wrong here: If I leave my regular job and head to a game 20 miles away, and then reurn home after the game, that mileage is not deductible.

[grizwald]

Originally Posted by BktBallRef

Correct me if I'm wrong here: If I leave my regular job and head to a game 20 miles away, and then reurn home after the game, that mileage is not deductible.

Yes, I think you have that correct. The key would be where did you leave from and where did you return to.

In this case the service would consider your trip to the game an afternoon comute from your day job. In other words, you would've had to drive home from your day job anyway. To make the trip deductible, return to your job site (and make sure it is logged that way in your mileage log, ) The fact that you keep an accurate mileage log is going to go a long way at an audit.

[26 Year Gap]

My job is a mile from my home. I keep a mileage log. I also keep a car log for gasoline fill ups and other repairs, so I have a dual record. My commuting miles to work are deducted from my total as I also do a fair amount of travel for my job. Sometimes I have business in the town I am officiating in, so I use that for business rather tahn officiating. I think I ended up netting $250 this year as taxable income. My previous two years, I was in the hole.

[Indy_Ref]

What would be my principal business code?

[grizwald]

Originally Posted by Indy_Ref

What would be my principal business code?

Good question. Maybe someone here might have some better ideas but from the lists I have these might be good choices:

561900 - Other support services
711210 - Spectator sports
711510 - Independent Artists, Writers and Performers
611000 - Educational services
999999 - Unable to Classify

I think the service just uses the business codes to compile data. While putting a code in is required (I think), there is no requirement that you put the exact code that they would want to see (that I'm aware of). I've NEVER had an IRS auditor even mention the business code I used, much less questioned whether or not it was "correct".

Mike Clark
Certified Public Accountant