Be smart when accepting prizes or money or claiming deductions related to college sports. That means no net deduction however, if you’re required to report prize money, you may still be able to claim a corresponding deduction for out of pocket expenses. Sensing a pattern? Expenses cannot exceed prize money. The NCAA also says that amateurism does not allow for “rize money above actual and necessary expenses.” Per the NCAA website:Īn amateur, as defined by the NCAA, is someone who has not profited above his/her actual and necessary expenses or gained a competitive advantage in his/her sport. If you file a tax return claiming that you’re engaged in a trade or business, or that you’re being paid to participate in sports, this might affect your eligibility under NCAA rules. Remember, to claim a deduction, you have to either show that you’re engaged in a trade or business OR that you’re engaged in a hobby where you occasionally earn money. There is, however, a big caution flag when it comes to college athletes. The same rules generally apply to children of all ages: it doesn’t matter if your child is in elementary school or in college. ![]() How much you can claim as a deduction – and where to report the income and deductions – depends on whether you treat the sport as a business or a hobby since most of us aren’t raising a little Simone Biles, it’s likely a hobby which means you’ll report winnings as “other income” on your federal form 1040 and take the deduction as a miscellaneous expense on Schedule A (you’ll find more on hobby loss rules here). If your child wins prize money (or equivalent, like Olympic medals) for participating in sports competitions, you can offset taxable income from those prizes by deducting the associated costs. While your mind likely goes first to professional athletes who are paid by teams – the Cam Newtons and the Carli Lloyds of the world – “for-profit” is more encompassing than that. That changes the nature of the expense from a personal expense to a business expense. ![]() The most obvious – and least common – exception is that expenses related to sports can be deductible if your child is engaged in the activity for profit. There are a few exceptions to this rule.ġ. That includes what you spend on instruction, equipment, accessories, and uniforms.īut I did say “most” expenses – not all. Most expenses associated with after school and extracurricular sports are not tax-deductible – even if the programs are affiliated with a school. There has to be a tax break in all of these expenses, right? Something? Anything? ![]() And if you play travel? Tournaments are typically overnight which can mean gas, meals, and hotels. In addition to chauffeuring the kiddos to practice and games, I am constantly paying up for tournament fees, ice time, equipment, jerseys (parenting tip: make your kids pick a number early on and stick to it year after year), sneakers, cleats, and skates. It’s all we can do to manage one sport per kid. ![]() I have friends who have their kids in multiple sports all year round. The thing is, we’re not even the worst of the lot. So, yes, he does get extra snacks at practice.īut, all of this means that we are that family: the sports family. Of the three kids, he is the one that has promised to turn professional and buy me a vacation house in whichever European city he plays for. She was pretty excited, as was I until I had to write out the first check for the season.Īnd it doesn’t end there. She found out this week that she once again made travel team for field hockey as a goalkeeper. My other daughter plays hockey, too, but not on ice: she plays field hockey. She’s on a travel ice hockey team, and she also plays for an ice hockey team affiliated with her school. Tonight is a skate night for my oldest daughter.
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