Run/Tax Question - Any Accountants out there? How do you claim youself as a profes and deduct racing/training expenses?

In your first three years of involvement you can declare expenses against total income. This closes after three years and you need to either show a profit (as a sole proprietership) or incorporate. Incorporating is fairly simple, you can declare an S-corp to avoid double taxation, and run your personal and business books off one ledger.

Under either scenario, if you're operating with the intention of making money, you can expense virtually everything involved with athletics. This includes running shoes, race entry fees, travel to and from, a portion of your home which you use as an office (overhead), and even supplements. It's all legit.

What about coaching? Say I coach 5 people, but I spend a little on flyers, a website, etc. How would that work?

In theory it's exactly the same - if your motivation is profit, everything you do related to coaching/growing your client base is an expense (think marketing, promotions, etc). Check into the differences between sole proprietership and incorporation. As a paid coach you'll also want to investigate liability insurance.

Are you declaring the coaching income, or is it under the table? Did you incorporate? If so, you can deduct the expenses. Otherwise you can't -- those deductions are only available to businesses.

Get TurboTax for businesses, it will walk you through it and save you tons of time. Incorporation will cost you, and its a hassle with all the filings. Figure out what your total deductions would be, and weigh that against added work (10-20 hours per year in my case), value of the deductions, and any state fees for starting and maintaining the business.

Knowing several small-time coaches, usually not worth the hassle, just declare it on your personal return. But some do it anyway as a selling point to give it some legitimacy.

For the track club, depends on the purpose. If you're trying to make money off of it, use an LLC. Otherwise, create a non-profit corporation, with 501(c)(3) filing status, so that your contribution to it is tax deductible. But if money will be flowing fromt the track club to you, be careful. Most states also have lower fees for non-profits, and if your annual gross receipts are under 20K or something like that, you don't have to file a federal return.

anonymouscoach wrote:

In theory it's exactly the same - if your motivation is profit, everything you do related to coaching/growing your client base is an expense (think marketing, promotions, etc). Check into the differences between sole proprietership and incorporation. As a paid coach you'll also want to investigate liability insurance.

Consider a LLC as well.

One thing to do is to become certified through RRCA or USATF if they offer liability insurance. You can also get accreditation through something like NSCA (but this is one of the tougher certifications).

SomeIdiot wrote:

Are you declaring the coaching income, or is it under the table? Did you incorporate? If so, you can deduct the expenses. Otherwise you can't -- those deductions are only available to businesses.

Get TurboTax for businesses, it will walk you through it and save you tons of time. Incorporation will cost you, and its a hassle with all the filings. Figure out what your total deductions would be, and weigh that against added work (10-20 hours per year in my case), value of the deductions, and any state fees for starting and maintaining the business.

Knowing several small-time coaches, usually not worth the hassle, just declare it on your personal return. But some do it anyway as a selling point to give it some legitimacy.

You can run a sole propreitorship for this type of income and still take the deduction. A LLC is simple for a business like this and allows you to protect personal assets for the most part (something a sole proprietorship does not do).

In CO, the fee for an LLC is small ($50 I think for the initial filing). Good idea to open a separate bank account for the coaching business.