Being an independent tennis pro might sound like an attractive lifestyle, but those extra expenses you rack up as a contractor aren’t so smashing. Although you might make a good hourly rate, by the time you deduct your increased payroll taxes and expenses associated with promoting yourself and teaching your lessons, you might struggle to make a living wage. Knowing the various deductions you can take as a teaching pro will help you keep more of your lesson fees.
Employee vs. Contractor
Check with a qualified tax professional to determine whether you’re a contractor, which will affect what expenses you can deduct. Look at last year’s tax return. If you received a W2 form, you’re an employee. If you received one or more 1099 forms, you’re a contractor. If you are an employee, your employer often pays for your equipment, marketing and facility costs. You can’t deduct any expenses for items you buy that your employer reimburses. If you’re an independent contractor, most expenses you have that arise solely from your teaching activities are deductible.
Any money you spend marketing yourself counts as a tax-deductible expense. Your website, brochures, flyers, banners, business cards, T-shirts and car magnets are business-related expenses. If you give free lessons or clinics to drum up business, you may not deduct the loss of revenue from that hour or two as a deduction, nor may you deduct time you donate to charity events and fundraisers. If you play in a commercial tennis league for fun, that might also qualify as a deduction if your main purpose for playing is to increase your exposure in your teaching area. This would count as a marketing expense, especially if you use your ranking or results in your marketing. One test for this is to ask yourself whether you would be playing in the league if you were not a tennis instructor.
All of your balls, rackets, hoppers, cones, ball machines, strings and other equipment you use to teach lessons are qualifying business expenses. If you receive free rackets, clothing, shoes, strings or other items from a sponsor, you do not need to declare this as income if your contract requires that you use these items when you teach or play to keep your contract. Any expenses to maintain a facility, such as squeegees, windscreens, garbage cans, nets, straps and benches or chairs, qualify as deductions. If you run a pro shop or sell equipment, even out of your car, your expenses to stock and market your business are deductible. Be careful before you shell out money for extra-nice tennis togs -- if you wear those clothes and shoes for non-work activities, you might not be able to deduct them.
Licenses and Fees
If you belong to a tennis-related organization, your dues qualify as a deduction. These include the National Tennis Academy, Professional Tennis Registry, U.S. High School Tennis Association, U.S. Professional Tennis Association, U.S. Tennis Association and any local, state or regional tennis associations you join to further your career. Expenses such as a city business license, liability insurance and copies of liability insurance certificates are deductible. Some facilities require you to name them as an additional insured on your liability insurance policy, which is a tax-deductible expense if you pay extra for it.
If you attend a workshop, convention or seminar, you can deduct the registration fee, travel and lodging costs and meals. Any magazines, books, CDs or tapes you buy to improve your knowledge or to show your students during rain days also qualify as deductible expenses. If you take college courses related to running your business -- such as marketing, advertising, bookkeeping, exercise physiology or nutrition -- you may deduct those expenses.
If you’re an employee and work at only one facility, you can’t deduct your mileage to and from that facility each day. If you are a contractor and travel to a variety of facilities -- especially if you take on new clients each season -- you can deduct your mileage to and from your various locations. If you teach at only one facility as a contractor, especially if you have a written contract, you might not be able to deduct that mileage, since it might be considered commuting.
Learn the standard deduction you can take for your filing status and whether it is higher than your total itemized deductions. These include deductions for mortgage interest payments, dependent care, education and health care. Work with a tax professional if you need help determining whether the total of any out-of-pocket deductions you can itemize will exceed the standard deduction.
Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.