If you have expenses related to coaching youth sports, you may be eligible for tax deductions. If you get paid (even a small amount), you may also need to pay taxes.
Types of Coaches
What type of coach you are affects your tax situation. There are differences between volunteers, independent contractors, and employees.
Are you also an official? Check out this Referee Tax Guide. See also: Personal Trainer Tax Guide
Volunteer Coaches
Volunteer coaches are coaches that don’t get paid at all. You might volunteer because your own kids are involved or just to support the local community.
If you’re not getting paid, you obviously have no income to report. If your organization wants to reimburse your expenses, there are two main paths you can take.
- Have them reimburse specific expenses rather than providing a general stipend. You should generally give them receipts (and keep copies for yourself). They should have a documented reimbursement policy. This makes it clear that any payments are for expenses not for services you’re performing.
- Be treated as a hobby. The downside to this option is that you will have to claim the reimbursements as hobby income but won’t be able to deduct any expenses. This choice is usually for when your organization does pay a small amount but it’s not your main job so you spend everything they pay you. See more on hobbies below.
Can volunteer youth sports coaches deduct expenses?
In order to deduct expenses, you generally need to be coaching for a qualifying 501(c)(3) non-profit organization. Most established youth sports leagues and clubs have this designation.
Some smaller organizations that operate like non-profits haven’t gone through the IRS process, and you wouldn’t be eligible to deduct expenses. Some for-profit leagues also use volunteer coaches, and you also can’t deduct expenses in those leagues.
Your expenses are considered contributions to the 501(c)(3) organization, so that’s why your organization has to be a qualifying non-profit for you to be able to deduct expenses.
If you receive benefits, such as discounted registration fees for coaching, you need to take those into account. For example, if you have $500 in expenses and your child’s $150 registration fee is waived, you can’t deduct the full $500. The first $150 counts as payment toward the registration fee, and the remaining $350 is a contribution to the organization.
What expenses can volunteer coaches deduct?
You can generally deduct expenses like equipment, team registration fees, and communication software apps.
In addition to the expenses being for a 501(c)(3) organization, the expense generally needs to be for the team or organization as a whole or for disadvantaged players. If you’re buying equipment that your own kids use or that you use outside of coaching, it generally wouldn’t be deductible.
For registration fees, it would also need to be a team expense, such as paying a tournament entry fee, rather than a personal expense, such as your child’s own registration fee. If you have to pay a background check fee that non-coach parents don’t have to pay, that would typically be deductible since it’s an expense required by your volunteering.
Can volunteer coaches deduct mileage?
The IRS has a fixed standard mileage deduction rate of 14 cents per mile for volunteer work for qualifying non-profits. Like equipment and other costs, the driving should be something you only incur by volunteering.
- Driving your own kids to and from practice or carpooling with other parents like you might do even if you weren’t coaching = generally not deductible.
- Driving the entire team to away trips or driving for events where you’re not related to the participants = generally deductible.
How do you track and report your deductions?
Deductions for volunteer work are itemized deductions on Schedule A of your tax return. If your standard deduction works out to be bigger than all of your potential itemized deductions, you won’t be able to claim these expenses.
In order to deduct your expenses as itemized deductions, you need two pieces of information. One is receipts that show the specific things you bought and what you paid. The other is a log you keep that shows the expense was a qualifying purpose. Include
- The organization the expense was for
- Who benefited (individual player, team, entire club, etc.)
- Who kept the property (i.e., do you keep the equipment at home or did you give it to the club to permanently keep at their facilities?)
For mileage, you’ll want to keep similar information and a log of the miles you drove and when. You may find it useful to use a mileage tracking app if you frequently drive for volunteer coaching.
Employee Coaches
If you’re an employee coach, your taxes are very simple. Your organization will withhold taxes and give you a W-2 at the end of the year. You report your W-2 on your tax return just like any other job.
Employee coaches generally can’t deduct any expenses. The main exception is that if you’re a full-time teacher coaching for your school, you may be able to deduct up to $300 per year for equipment through the Educator Expense Deduction.
If you receive reimbursements for specific purchases, such as buying equipment, you may be able to exclude those reimbursements from your taxable income. In order to do so, your employer will need to mark them as a reimbursement rather than wages, and you’ll usually need to submit receipts to your employer.
Independent Contractor Coaches
Independent contractor coaches are the most common type of paid coaches in youth sports organizations. It’s often a side hustle, or you may need to find multiple teams or other training work to make it a full-time gig.
You should receive a 1099-NEC from your organization at the end of the year if they paid you $600 or more. You’ll need to add a self-employed Schedule C tax form to your Form 1040 individual tax return when you file your taxes.
You’ll be responsible for both income taxes and self-employment taxes. You’ll also generally need to make quarterly estimated tax payments.
What tax deductions can independent contractor coaches take?
When you’re an independent contractor, you’re engaged in a business, so you can take ordinary and necessary expenses related to your business.
- Mileage: You can take the standard mileage deduction when you travel to away games. Trips from your house to home games and practices would generally fall under non-deductible commuting expenses. If you travel between club facilities, including for home games or practices, those trips would be deductible business trips.
- Tolls and parking: Tolls and parking fall under similar rules to mileage — deductible for business trips but not deductible for commuting trips.
- Travel expenses: If your team takes overnight trips and you have expenses like hotels, meals, flights, or rental cars, those are generally deductible. If your organization reimburses you, you generally report the reimbursements as income and then deduct the travel expenses (they cancel out).
- Coaching courses and memberships: If you pay for a coaching course or join an organization like United Soccer Coaches (formerly NSCAA), those expenses are generally deductible.
- Uniforms: Uniforms depend on if it’s something you can wear other places. So baseball coaches who wear uniforms like players can deduct those. Polo shirts and other athletic attire that’s suitable for casual wear is generally not deductible.
- Equipment: When you buy equipment, it generally needs to be for your coaching. If you still play, you can’t deduct things that you also use when you’re not coaching.
- Insurance: If you have to buy your own liability insurance, you can usually deduct that. If you don’t have an employer that offers health insurance, you may also be able to deduct the cost of your health insurance.
- Software: If you pay for software like TeamSnap or other communication or coaching tools, those are generally deductible.
- Cell phone: You can only deduct the business portion of your cell phone bill. If you use your personal phone for coaching, you can’t deduct the full amount. You need to find a reasonable way to divide up the bill such as minutes or data usage.
- Qualified Business Income deduction: The QBI deduction is an automatic deduction of 20% of your net profit. Your tax filing software should automatically add this in.
What if I donate the money back to the club?
If you coach as an independent contractor but it isn’t your main job so you donate the money back, you still have to report your business income. You can deduct your expenses, but the cash you donate back is not a business expense. You may be able to deduct the donations as a charitable expense.
If you don’t want to pay taxes on money you’re donating back you can:
- Refuse all payments, or
- Have your organization register you as a volunteer and reimburse you only for documented expenses
What if I’m losing money?
If you’re losing money as a coach or the amount you’re making works out to less than minimum wage, you may be a hobby rather than a business. The general rule is that you’re a hobby if you lose money in three out of five years. You’re a business if you make money in three out of five years.
Hobby Tax Status as a Coach
Being a hobby is a special tax status. You may be a hobby if one of the following applies.
- Your organization provides a small stipend that’s more of a token of appreciation than full compensation for your time
- You’re compensated your time but you do this for fun so you spend most of the money on coaching expenses
- You meet the hobby loss rule (losing money in three out of five years)
If you’re a hobby, you
- Report all of your income from coaching as other income on your tax return. You pay income taxes but not self-employment taxes.
- You can’t deduct any expenses — not even to offset your hobby income
You can learn more in this Hobby Tax Guide or check out more hobbies that make money.
