Taxes

[Kim to the Max]

Hey everyone,

I have a quick tax question for those of you who simply coach LTS. I made just over $750 teaching LTS this year and my club gives us 1099-MISC forms, so I have to claim it as income on my taxes. I know that some of my personal expenses can be claimed for this, so I was wondering what would qualify. Obviously my coaches membership to the USFS and my insurance directly affect my coaching, but would any other expenses, such as my personal lessons, since those enhance my skills to be a better instructor, etc. I don't want to go too far, but I want to make sure I am appropriately claiming my personal expenses.

Thanks!!

--Kim

[phoenix]

Mileage to & from the rink, jacket if required, stickers (seriously! every little bit counts!), probably at least a few sharpenings.

I claim my own lessons, but I also coach quite a few private lessons so it offsets it. I'd ask an accountant about the lessons thing--when you're self employed, the govt. does let you *lose* money on a business for a certain amount of time (3 years? 5 years?) before you have to show a profit or quit taking the deductions, so you maybe would be all right w/ taking that much in deductions.

[Isk8NYC]

DH is doing our taxes now. Coaches are allowed to claim a variety of business expenses:

Clothing - Rink jacket, ski/special coaching pants, warm weather clothes for coaching.
Equipment - boots, blades, guards, champion cords, hand/foot warmers (j/k)
Books/DVDs/CDs - skating books, PSA/USFSA seminar DVD's and CD's, music CDs that you weren't reimbursed for by students.
Subscriptions to magazines, trade journals, and online websites such as icoachskating
Memberships - ISI Professional, USFSA Personal, USFSA Coaches, Skating Club, Positive Coach Alliance.
Education - coaching-related seminars, conferences, etc. Event fee plus travel expenses.
Travel - to/from seminars, competitions, test sessions. Some people deduct their travel to/from their regular rinks for 1099 employees, but I don't do that.
Child Care - expenses for babysitting, day care, or other programs while you taught or coached.

Miscellaneous - stickers, markers, bubbles, gifts for skaters, office supplies, mailing supplies, computer software for skating like DartFish or a music editing program, video camera used for recording skate lessons/playback.

My husband says that personal lessons and ice time fees are deductible and we've taken them off in the past, but I didn't take any lessons during 2009.

Test fees: Since I was an ISI skater, but I'm now a USFSA coach, I have to study the MITF and Freestyle test requirements. Many parents judge a coach by their personal test level (right or wrong, it's true) so to become more marketable, I've been practicing to take the standard-track tests.

I doubt that competition entry fees could be deductible.
However, if you attend a competition to size up the skaters or coach, and you incur an attendance fee, that's deductible.

I don't know about an FSU membership - seems like it would be relevant if you had skaters who were being discussed over there. Given that site's current status "in the news," I think you could make a case for it if you wanted to.

[Isk8NYC]

My taxes were confusing this year. The rink gave me TWO 1099 forms this year. The first one was for my group lesson income, which they pay me for. The second one was for my private lesson income.

When I teach private lessons, the student pays the rink cashier. That's convenient because they accept a variety of payment methods and I don't have to make change. Every two weeks, the rink gives me a check for the private lesson amount less the commission cut the rink takes out.

Let's say a student pays for $100 of lessons. The rink collects $100, then gives me a check for $80. The $20 difference is their commission. (I'm making these numbers up.)

On my taxes, I declare
Gross Income = $80
Comm's Expense = -0-
Net Income = $80

When I coached in NYC, I would collect the $100 then write a check to the rink for the $20 commission.

On my taxes, I would have declared:
Gross Income = $100
Comm's Expense = $20
Net Income = $80

I end up with the same net income, it's just a different methodology.

[Isk8NYC]

One thing that's really important is to have a separate bank account and credit card that you use just for skating. I remember a well-established coach in the Northeast giving a seminar about keeping personal and business monies separated. During an audit, one such coach was challenged on whether or not her coaching income was from a "business" or a "hobby." If it's classified as a hobby, you aren't eligible for business deductions.

[dbny]

In addition to the expenses mentioned above, last year I also claimed the $20 for IceNetwork. I really do study what I see there, and I ask some of my students to watch certain events/performances. Wish I had remembered that deduction, because I haven't anted up for IceNetwork yet, so it's out the door for my 2009 taxes.

[Mainemom]

Can I surmise from this thread that the majority of the LTS coaches out there are being paid with no withholding of taxes (getting a 1099 at the end of the year)? Our club decided to make all our coaches employees and it's so much more expensive since we have to now pay employer taxes and a tax preparer to file the taxes for the club. I was just wondering if 1099's are the norm or not?

[Isk8NYC]

I can't remember ever getting a W-2 instead of a 1099. All of the rinks, skating schools, and Clubs I've taught groups for classify the position as an "independent contractor."

There was a PSA magazine article that discussed that "fine line" between employee and ind. contractor recently. I don't know if I still have a copy of the issue. I'll look.

[Lsk8]

I would wonder why your club decided to hire the coaches as employees.

Your club should look closely at having coaches as employees. In addition to the tax issues you also should consider that the club could be sued if an employee coach gets hurt (do you have them covered by workmans comp?), or if a child he/she is coaching gets hurt or if the coach is accused of any sort of impropriety.

But if you chose to go the independent contractor route, the coaches may want a pay increase to offset the benefits they now receive as employees (ie social security). It might be worth doing that to get out of the role as employer.

[Mainemom]

I would really appreciate it if you could dig up the article on the "fine line" between independent contractor and employee. I think it's crazy to be giving them W2's but I was outvoted. Would that article be available on line, do you think?

[Isk8NYC]

I would really appreciate it if you could dig up the article on the "fine line" between independent contractor and employee. I think it's crazy to be giving them W2's but I was outvoted. Would that article be available on line, do you think?
Jimmy Santee at the PSA has always been helpful and friendly. He might be able to email you an electronic copy.

I went through my stack of PSA magazines, but I didn't see that article. I might have already recycled or given the issue away. (Just gave away about 8" of magazines this weekend at the test session. The skaters picked them based on the cover photos, lol.)

This is from the ISI Archives: http://www.skateisi.com/site/sub.cfm?content=Archive_TaxesandIceSkating
The advice might be out of date since it's so old. Here are the IRS rules:
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html


More advice on deductions: http://coaching.usolympicteam.com/coaching/kpub.nsf/v/6Dec03 (http://coaching.usolympicteam.com/coaching/kpub.nsf/v/6Dec03)

[Skittl1321]

I would really appreciate it if you could dig up the article on the "fine line" between independent contractor and employee. I think it's crazy to be giving them W2's but I was outvoted. Would that article be available on line, do you think?

Here is a start on the IRS webpage. http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Having coaches as employees sounds kind of crazy- in addition to being responsible for the withholdings, you also need to pay FICA/Medicare, have a system for workers comp/unemployment.

I much prefer being an employee than a contractor because the taxes are a lot lower (since the company pays half)- but I've rarely seen a situation of a coach that falls as employee.

For "part time coaches" - I'd be careful with your deductions. That "hobby" line can get crossed pretty easily in an audit. If you aren't coaching close to full time hours, and still skate for yourself, I wouldn't take skates and lessons as an expense- since clearly those are used for personal use as well.

[Mainemom]

Here is a start on the IRS webpage. http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Having coaches as employees sounds kind of crazy- in addition to being responsible for the withholdings, you also need to pay FICA/Medicare, have a system for workers comp/unemployment.



Well it is certainly more expensive for us, but looking at the ISI archived article recommended by isk8NYC it appears that our instructors are employees. We assign the classes, tell them when to coach, who to coach, what they need to teach and the money comes directly to us as the skating club. I don't like it but they are definitely not independent contractors.

[Skittl1321]

Well it is certainly more expensive for us, but looking at the ISI archived article recommended by isk8NYC it appears that our instructors are employees. We assign the classes, tell them when to coach, who to coach, what they need to teach and the money comes directly to us as the skating club. I don't like it but they are definitely not independent contractors.

Well then good for your club for recognizing it! It's an even bigger hassle if the IRS finds out you have employees that you've been treating as independent contractors.