Children’s sports are a serious — and often expensive — business. Not only fees for playing on a teams, but equipment, uniforms and hotel rooms for long-distance away games. There have been some ingenious efforts over the years to turn sports expenses into a tax write-off, but usually you have to absorb your costs.
Donating to school sports or to a kids sports league that qualifies for tax-deductible gifts gets you a tax break. The catch? If you get something in return, you have to subtract the value from your donation before taking the write-off. Because fees allow your child to play, they give your family a substantial benefit in return, according to the IRS. Money you donate to help the team might still qualify, but membership fees probably won’t. Another drawback is that you can deduct donations only when you itemize on Schedule A.
If your company decides to sponsor your child’s Little League team, that’s a tax-deductible business-advertising expense. Purchasing ads or banners at her sports events could also qualify. You still can’t deduct your child’s individual fees and expenses or the cost of attending her games, however. The Micah Byrd accounting service’s website describes the case of an attorney who claimed a business-promotion write-off for the $71,000 it cost to attend his son’s sporting events and network. The IRS told him that one didn’t fly.
One way to get a write-off is when you use sports activities — a tennis program or a summer swimming camp, for instance — as a day-care service. The IRS lets you claim a tax credit of up to $3,000 for the cost of child-care programs, and sports programs can qualify. This only works if you — and your spouse, if you’re married — rely on the program to free you up for work or job-hunting. It also has to be an official program or organization — baseball practice at a neighbor’s house doesn’t count.
The chance of your kid turning pro in his teens is a long shot, but if it happens, the rules change. As a professional, your child can deduct any of his sports-related expenses against his sports income. Fees, equipment, travel and sports-related medical bills are all deductible. This doesn’t translate into a write-off on your taxes, but at least you don’t have to worry about paying his costs out-of-pocket any more.