Tax write offs

[WhistlesAndStripes]

Originally Posted by MadCityRef

Whenever my wife comments that I work a lot of games, I remind her of the tax deduction every year. I'm always in the negative because of the mileage.
( , that could be a selling point to get more officials.)

If you do make a profit, you also need to pay the Self Employment Tax.

Mileage to/from meetings, clinics, games. Percentage of the cel phone bill and internet. Video tapes/dvds, Datebook, Ref magazine/NASO, Dues and fees, Tolls, Gear. (I have an office too.)

It adds up. Have receipts.

My next license plate:: SHDL C ROX

Always in the negative because of the mileage? Are you kidding me? I don't see how this is possible.

As a CPA, I won't give any specific tax advice here, but what I will say is, be very careful about which advice from this board you follow. Some of it is good. Some of it is not so good. Just make sure that it will pass scrutiny in the event of an audit. The best way to be sure of that is to pay someone lots and lots of money to prepare your taxes for you. Mine were efiled last weekend, and I should be getting my nice fat check from Uncle Sam direct deposited next week.

[26 Year Gap]

Kramer is the expert on write-offs. He is often quoted here.

[DonInKansas]

Originally Posted by 26 Year Gap

Kramer is the expert on write-offs. He is often quoted here.

What does this guy know about taxes?

[Mark T. DeNucci, Sr.]

Here is a short list of deductions for officiating for this year's Schedule C:

Lines 1, 3, 5, and 7: These lines all should be the same; the total amount of game fees for the year.


Now for the deductions:

Line 9: Automobile expenses including: mileage, parking, and toll road fees.

Line 15: Insurance: liability, game fee loss protection, and suplemental health insurance that is specific for officiating injuries only.

Line 16b: Interest: If you are making payments on the automobile you use for officiating, you can pro-rate the amount of interest that you paid for the year on the car loan.

Line 17: Legal and professional services: Lawyers' fees, accountant fees, any out of pocket medical expenses that are related to your officiating that is not covered by your primary health care insurance or your supplimental medical insurance (for sports officiating only).

Line 20a: Automobile rental.

Line 21: Repairs and maintenance.

Line 22: Supplies.

note: For Lines 21 and 22, one should check the Schedule C instructions.

Lines 24a and 24b: These lines are self-explainatory. Check with the Schedule C instructions.

Line 27 and 48:

membership dues (officials' associations)
registrations fees (StateHSAA, FIBA, ASA, USSSA, etc.)
assingnors fees
uniforms
laundry/drycleaning
postage
education
publications


MTD, Sr.

[jmaellis]

I've used H&R Block software for the past couple of years to complete my Schedule C. I've found that their explanations regarding what can/can't be deducted to be fairly straight forward and easy to follow. When all is said and done I paid about $14 in self employment tax.

I didn't receive a single 1099 last year, but I reported ALL my referee income. In turn I took all the credits/deductions that were allowed and still came out okay. It's much better to just report it properly and take the deductions than to not report the income (and since you didn't report the income you can't claim the deductions) and risk and audit.

[bob jenkins]

Originally Posted by Whistles & Stripes

Always in the negative because of the mileage? Are you kidding me? I don't see how this is possible.

I agree, and I think (but I am not a tax expert, nor did I stay in a HolidayInn Express last night) that you need to occasionally (something along the order of 1 in three years) declare a profit or the IRS might / will decide that this is a hobby and not a business.

[Mark T. DeNucci, Sr.]

Originally Posted by bob jenkins

I agree, and I think (but I am not a tax expert, nor did I stay in a HolidayInn Express last night) that you need to occasionally (something along the order of 1 in three years) declare a profit or the IRS might / will decide that this is a hobby and not a business.

Bob:

I think the correct ruling is that a Schedule C business must show a profit two out of the last five years. BUT, that is not how the IRS applies the rule. Back in 1996, at the ABL officiating tryout camp, I officiated with an IRS Agent who worked in the IRS's Headquarters in Washington, D.C. He told me that the IRS looks at the type of buiness and the amount of gross income is being generated.

As example, a person is a stamp collector and travels to stamp shows every weekend to attend stamp shows. The stamp collector trades and sell stamps at these shows. Every year the stamp collector shows gross income between $300 and $500, but shows a taxable loss every ear in excess of ten times his gross income. That would bring out the red flags. The IRS would consider this a hobby and not a business.

Officiating of amatuer sports is a travel intensive buiness and the IRS understands that. I have had a few years when I have had a taxable profit, but more often that not I have a taxable loss and I have been filing Schedule C's for over 25 years.

MTD, Sr.

[26 Year Gap]

Originally Posted by DonInKansas

What does this guy know about taxes?

Where did I say anything about taxes?

[WhistlesAndStripes]

Originally Posted by Mark T. DeNucci, Sr.

Bob:

I think the correct ruling is that a Schedule C business must show a profit two out of the last five years. BUT, that is not how the IRS applies the rule. Back in 1996, at the ABL officiating tryout camp, I officiated with an IRS Agent who worked in the IRS's Headquarters in Washington, D.C. He told me that the IRS looks at the type of buiness and the amount of gross income is being generated.

As example, a person is a stamp collector and travels to stamp shows every weekend to attend stamp shows. The stamp collector trades and sell stamps at these shows. Every year the stamp collector shows gross income between $300 and $500, but shows a taxable loss every ear in excess of ten times his gross income. That would bring out the red flags. The IRS would consider this a hobby and not a business.

Officiating of amatuer sports is a travel intensive buiness and the IRS understands that. I have had a few years when I have had a taxable profit, but more often that not I have a taxable loss and I have been filing Schedule C's for over 25 years.

MTD, Sr.

Ya know, I'm sorry, but if your travel is eating up all of your game fees, something is wrong with this picture. I mean, I know none of us are in this to get rich, especially if we're just doing high school levels and below. But realistically, you should be making more money per game, at least most of the time, than it costs you to get there and home.

[Mark T. DeNucci, Sr.]

Originally Posted by Whistles & Stripes

Ya know, I'm sorry, but if your travel is eating up all of your game fees, something is wrong with this picture. I mean, I know none of us are in this to get rich, especially if we're just doing high school levels and below. But realistically, you should be making more money per game, at least most of the time, than it costs you to get there and home.

W&S:

Its called the mileage deduction. When I travel to either the IAABO Spring or Fall meetings I drive there from my home, those miles count as a deduction because I am attending a business related funcition. When I go to Florida every summer for AAU and YBOA national tournaments I drive from my home in Ohio to the Florida, those miles count as a deduction. Everytime you attend a rules meeting given by your local association or StateHSAA, the miles you drive to attend those meetings count toward your mileage deduction. If you officiate scrimmage games at the beginning of the season, even if you are not compensated for officiating, the miles traveled for officiating the scrimmage games are deductable.

MTD, Sr.

[Bearfanmike20]

Originally Posted by jmaellis

I've used H&R Block software for the past couple of years to complete my Schedule C. I've found that their explanations regarding what can/can't be deducted to be fairly straight forward and easy to follow. When all is said and done I paid about $14 in self employment tax.

I didn't receive a single 1099 last year, but I reported ALL my referee income. In turn I took all the credits/deductions that were allowed and still came out okay. It's much better to just report it properly and take the deductions than to not report the income (and since you didn't report the income you can't claim the deductions) and risk and audit.

I will be doing this as well... Most of my counterparts give me this look like "are you crazy", but I am the epitomy of murphys law so... I'll report, but I will also claim my office space at home, and my laptop that I bought this year.

[WhistlesAndStripes]

Originally Posted by Mark T. DeNucci, Sr.

W&S:

Its called the mileage deduction. When I travel to either the IAABO Spring or Fall meetings I drive there from my home, those miles count as a deduction because I am attending a business related funcition. When I go to Florida every summer for AAU and YBOA national tournaments I drive from my home in Ohio to the Florida, those miles count as a deduction. Everytime you attend a rules meeting given by your local association or StateHSAA, the miles you drive to attend those meetings count toward your mileage deduction. If you officiate scrimmage games at the beginning of the season, even if you are not compensated for officiating, the miles traveled for officiating the scrimmage games are deductable.

MTD, Sr.

Mr. Denucci, as a CPA and someone who spent half of my professional career preparing taxes, I think I understand the mileage deduction as well as anyone, and the reasons you state for taking the deduction all seem to be legitimate.

While I understand the travel to the meetings is always going to be a cost you have to bear, I can't help but asked if you are given some kind of reimbursement for travelling to those tournies in Florida. It just doesn't seem to make good business sense to me.

[Rizzo21]

Originally Posted by Whistles & Stripes

Mr. Denucci, as a CPA and someone who spent half of my professional career preparing taxes, I think I understand the mileage deduction as well as anyone, and the reasons you state for taking the deduction all seem to be legitimate.

While I understand the travel to the meetings is always going to be a cost you have to bear, I can't help but asked if you are given some kind of reimbursement for travelling to those tournies in Florida. It just doesn't seem to make good business sense to me.

Well, I'm an accountant (but not a CPA) and only travel locally with about 35 reimbursable games/year. I claim all income, cash or otherwise because it's the right thing to do, not because of audit risk or that I love paying taxes. With the travel to and from the games, association meetings and scrimmages along with supply expenses, association dues and state registrations, I end up with about 75% of my revenues being expensed out. I don't see that as unreasonable, especially at .50/mile these days.

If I drive 100 miles for a $55 game, I'm only getting whacked for $5 by the IRS. I use about 3 1/3 gallons and at $3/gallon that's $10 for gas and I'm up $45 before other hidden auto expenses (I drive a high-mileage car so it's not too bad). I consider the .50/mile deduction pretty generous actually.

[kmw]

postage for mailing back ref shoes that we didn't keep? It seems that I should be able to, but thought I would ask anyway.

[Mark T. DeNucci, Sr.]

Originally Posted by Whistles & Stripes

Mr. Denucci, as a CPA and someone who spent half of my professional career preparing taxes, I think I understand the mileage deduction as well as anyone, and the reasons you state for taking the deduction all seem to be legitimate.

While I understand the travel to the meetings is always going to be a cost you have to bear, I can't help but asked if you are given some kind of reimbursement for travelling to those tournies in Florida. It just doesn't seem to make good business sense to me.

W&S:

I got free motel rooms. It isn't about making good business sense. Sports officiating is a profession masquerading as a avocation. Besides, one does not officiate in these national tournaments to make money per se. It is an honor to officiate in these tournaments. One meets officials from all over the country and has the opportunity to make life long friends.

But one other point I would like to make. I have done examinations of my expenses in past years. My exact pro-rated automobile expenses never come close to the mileage deduction. When comparing my after actual expense income compared to my mileage expense calculated income, yes I make a profit every year, but the because the mileage deduction is so much greater than my actual expenses it is crazy for me not to take the mileage decuction. The mileage deduction creates a paper loss that does not reflect my actual profit/loss for the year. IRS rules are such that I can take the deduction that gives me the largest deduction under the rules not the smallest deduction.

I think that it is a great country that allows me to have a taxable loss, while making an actual profit after my acutal expenses are deducted. If it is good enough for a large corporation it is good for a mench like me and my fellow officials.

MTD, Sr.