Here’s what soccer referees should know about filing taxes and claiming referee tax deductions.
Income
Your taxable income includes all direct deposits, app payments, checks, and cash. Yes, the IRS can track cash. The people who pay you claim you as an expense.
Mileage and other reimbursements also generally count as income when you’re an independent contractor. However, you can deduct the related expenses so it all washes out. (But the IRS is like your math teacher — show your work.)
You should get a 1099-NEC from any organization that directly paid you $600 or more. If you get paid through an app like PayPal or Dwolla, you should get a 1099-K from the payment app. Clubs and leagues are not supposed to send you a 1099-NEC if they pay you through an app that sends 1099-K because it double reports your income.
Note: Some associations withhold pay for things like dues or uniform purchases. When your tax form asks for your income, enter your income before those deductions. You’ll claim your expenses later.
Deductions
If you’re an independent contractor, there are a number of tax deductions that you can take. If you’re hired as a W-2 employee, you won’t be able to claim any deductions.
Travel Expenses
Travel expenses mean actual travel. Commuting from home to local games is almost never deductible.
Just because your association tracks miles in Arbiter or GameOfficials doesn’t mean those miles are deductible. Also, those miles are often based on your address in that system rather than where you actually drove from.
For travel to be deductible, it needs to be either between business locations or travel outside of your metro area.
- Between business locations means from your day job to a game or between fields.
- Travel outside of your metro area means farther than a normal commute. This is a gray area. It’s usually safe to take the position that it means either greater than 50 miles one way (based on the standard practice of leagues and tournaments using this as the cutoff for travel reimbursements and hotels) or if an overnight stay away from home is required.
Driving from home to local fields is just like driving to any other job. It’s a non-deductible commuting expense.
If you have a qualifying home office, trips from home could potentially be between business locations. However, a qualifying home office requires much more than just having space in your closet for your shirts. In most situations, referees who do not have another work-at-home job do not qualify.
So what can you deduct for transportation for trips between business locations or travel outside of your metro area?
- Either the IRS standard mileage deduction or your actual gas, insurance, maintenance, repairs, depreciation, and other auto expenses. Use this AAA tool to look up the cost to operate your car per mile. If it’s more than the current IRS standard mileage deduction, you usually want to use actual expenses.
- Tolls.
- Parking.
- Bus, plane, and train tickets.
- Actual rental car expenses (you can’t use the standard mileage deduction for rental cars).
- Hotel nights you paid for.
Note: If you travel to games or a tournament as part of a longer vacation, your travel deductions may be reduced or eliminated based on how much of the trip was personal in nature versus how much was for business.
Meals
Meals are generally only deductible when you’re traveling overnight such as to a distant game or tournament. You can’t deduct meals, snacks, or drinks when you’re working locally.
For overnight travel, you have two options.
- Keep your receipts and report your actual amounts.
- Use the GSA per diem rates as a standard meals allowance ($50-70 per day depending on zip code).
How to use the GSA per diem rates.
- Get the zip code for your hotel or wherever you’re staying.
- Use this link to search: https://www.gsa.gov/travel/plan-book/per-diem-rates
- When you select the year, the GSA fiscal year doesn’t match the calendar year. The government fiscal year starts on October 1st. However, you still need to use the same rates for the entire tax year even if it’s after October. For example, in November 2022, you’d still use fiscal year 2022 instead of changing to fiscal year 2023.
- Find the number under M&IE. This is your standard allowance per day.
- For the first and last days, you multiply the standard allowance by 0.75.
- Example: 4 day trip, M&IE on GSA website = $54. Day 1 and Day 4 = $40.5 each ($54*.75). Day 2 and Day 3 = $54 each. Total standard allowance for that event = $189.
Whether you use the actual amount or the standard method, the deduction is only one-half of your expenses. So in the above example, your deduction is $94.50 not $189.
Filing tip: Pay close attention to whether your tax software is asking for your full meal expenses (and will divide by 2 later on) or for half of your expenses.
Generally Deductible Referee Expenses
You can generally deduct the full cost of the following items:
- USSF, NISOA, ECSR, NFHS, and other registration fees.
- Association dues.
- Background check fees.
- Assigning fees (if paid by referees rather than by the league or association).
- Uniforms, whistles, flags, and other equipment.
- Assessor fees (report your game fee as income and the assessor fee as an expense even if you’re paid in cash and hand the entire fee directly to the assessor).
Probably Not Deductible
You generally can’t deduct your referee shoes, workout clothes, polos, warmups, watches, or other non-referee specific items. The general IRS rule is that you can’t deduct anything that you COULD use in your personal time (even if you don’t).
So that bright yellow referee jersey is safely deductible. A USSF polo shirt you could wear on the golf course is not. Even things like cleats generally won’t be deductible because you could play in them even if you no longer play.
Also, your cellphone bill is one of those things that’s technically possibly a partial deduction but not worth it. You definitely can’t deduct the entire bill unless you have a phone you only use for refereeing. If you use your personal phone, you can deduct maybe 1% of the bill for the 1% of the time you use it to accept your games, but good luck dealing with the IRS on that one.
Qualified Business Income Deduction
Soccer referees can claim the 20% qualified business income deduction. That basically means instead of paying taxes on 100% of your referee profits, you only pay taxes on 80%.
The “the principal asset of such trade or business is the reputation or skill of one or more employees or owners” exception does not apply to soccer referees. Regulation 1.199A-5(b)(2)(xiv) defines this clause as a very narrow list of specific services. Referees aren’t on there.
Estimated Taxes
Because independent contractors don’t have taxes withheld, you need to pay your own taxes throughout the year. If you owe more than $1,000 when you file, the IRS will charge you interest.
The easiest way to do it is to add extra withholding at your day job. For most people, you’ll want to add 30% of your expected referee income (more if you usually owe when you file).
The other option is to make four quarterly estimated tax payments to the IRS. Again, it’s usually safe to start with 30% of your expected referee income. Divide that by four and pay the IRS on April 15th (not to be confused with paying and filing last year’s taxes), June 15th, September 15th, and January 15th.
After your first year, most tax filing software will tell you how much to pay in estimated taxes for next year.
There are also many tax apps that you can use. For about $10 to $20 per month, they’ll automatically track all of your income and expenses and tell you exactly how much to pay in estimated taxes.
State Taxes
If you have a state income tax, soccer referee income is normally subject to state income tax.
If you travel to another state with an income tax, you may owe taxes in that state for the games you worked in that state. You’ll need to check each state you worked in because they all have different rules. Sometimes you need to earn a minimum amount to file there, sometimes it’s based on the number of days you worked there, and sometimes you’ll always owe.
Minors and College Students
There’s no minimum age to file taxes. Teenagers and college students have to file and pay taxes.
Because of the self-employment tax, the minimum referee income to file a tax return is just $400.
Students having income can affect whether they can be claimed as dependents. Parents and younger referees may want to file taxes together or at least have a discussion to make sure they’re on the same page.
Soccer Referee Business Code
When you do your tax return, it may ask for you a business or activity code. This is mostly for statistical purposes and does not affect your taxes due. You may want to choose one of the following codes:
- 711210 Spectator sports (including professional sports clubs & racetrack operations)
- 812990 All other personal services
- 999999 Unclassified establishments (unable to classify)