Tax time can be a challenge for Tennis Teaching Professionals. Most pros love to be on the court doing what they do best – teach the game of tennis.

About January of each year we have this distant alarm that goes off in our head – April 15th is approaching. We have this tug at our heart and head that says, “Get your information in order – soon.” Here are some tips that may help you with organizing your information and figuring out what you can and cannot deduct.

Tip #1 Be Prepared when you meet your preparer.

Your tax preparer is usually not a bookkeeper. When you schedule your appointment have receipts and expenses totaled so your preparer does not have to run a calculator tape (and charge you extra.)

Tip #2 Keep categories

Know the titles of you major income and expenses. For example: Tournament Entry Fees, Advertising, Junior Tennis Parties, Awards, Tennis Balls, Marketing, Professional Dues, Tennis Socials, etc. Once these categories are set up get an accordion file folder and label each section to match your categories. When you get a receipt, drop it in the correct section. Come tax time you can pull the receipts out and total them and have the final figures ready for your preparer. Once these categories have been established, it becomes easy to keep them going from year to year and your preparer will have the same categories set up in their computer to match.

Tip #3 Check your records

In addition to checking and totaling your receipts, pull out your check register to be sure you did not forgotten some expenses. Next, pull out your credit card summary and using a yellow highlighter, mark each of your expenses on the report. You may also use several highlighters and color code your expenses. This will make it easy to identify where an expense might go on your summary.

Tip #4 Pay your quarterlies

The biggest surprise, and not a good one, is forgetting to pay your estimated quarterlies on self employed income (1099’s and no withholding.) It is easier to come up with four smaller amounts throughout the year, rather than waiting to pay at the end. Also waiting to pay can be expensive and often includes penalties and interest on top you the taxes you owe on your income.

Tip #5 Deduct only your own expenses

When you travel for tournaments or professional education, it is great you bring your family along – you just cannot deduct your family’s expenses on your Schedule C. Be sure to keep your food, travel and other expenses separate from theirs. It may be a good idea to write your portion of a meal on the receipts as you pay, so you are not guessing when your preparer asks for YOUR expenses.

Tip # 6 You must make a profit or it is considered a hobby.

It is great that you have all those expenses to reduce your total 1099 income but the IRS says you need to show a profit within a period of time (3 of the last 5 years) or it is considered a hobby. A business is in the business of making a profit. Showing a loss every year may reduce what you have to pay the IRS, but the IRS might re-categorize your tennis business as a hobby.

Tip #7 The IRS looks more closely at Schedule C reports

Be diligent in preparing your Schedule C. The IRS knows this is a common place to find inappropriate and bogus expenses. If they audit you, it can be a time consuming experience. They may ask you to provide receipts for each of your deductions in a specific category or all of your schedule C expenses. Play it a little conservative but be fair to yourself and to Uncle Sam.

If you make it a practice to keep on top of your income and expenses throughout the year, it makes tax-time less stressful and ultimately saves you time and money. If your situation changes, be sure to consult your tax advisor on your best course of action to avoid surprises on April 15th.

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