The Referee's Playbook to Managing Finances: From Hobby to Small Business

Important: This is not intended as tax advice. Please consult a tax and legal professional regarding your own tax situation.

For many referees, officiating is more than a gig—it’s a passion that keeps them connected to the sports they love. But whether you’re officiating soccer matches, gymnastics meets, or basketball games, it’s time to view your role through a more professional lens: as a business owner. While refereeing may not be your primary source of income, understanding the business side of officiating can save you money and help you maximize your financial potential.

Here’s a deep dive into why referees should treat their work as a business and how to navigate some key financial aspects.

From Hobby to Professional Mindset

Referees often think of officiating as a sideline hobby rather than a professional pursuit. However, this mindset can undervalue the time, effort, and financial resources invested in this role. According to Robin Ruegg, a gymnastics judge and former IRS employee, “If you treat officiating as a business, those hiring you are more likely to treat you professionally as well.” This shift in perspective not only elevates the respect you command but also opens the door to financial benefits.

Setting Up a Refereeing Business

You don’t need to form an LLC or a corporation to operate as a business. Becoming a sole proprietor is often the simplest route. Here’s how it works:

1. File as a Sole Proprietor
   As a sole proprietor, you’ll file a Schedule C with your taxes. It’s straightforward and doesn’t require legal assistance. In some states, like Georgia, you might need to register your business name for a nominal fee, but it’s far less complicated and expensive than forming a corporation.

2. Why Sole Proprietorship?
   Sole proprietorship allows you to claim deductions for expenses related to your officiating work. From uniforms to travel costs, these deductions lower your taxable income, potentially saving you hundreds of dollars in taxes.

Understanding Deductions

Tax deductions reduce the income on which you’re taxed, meaning you keep more of your hard-earned money. Here’s a breakdown of common deductions referees and officials can claim:

1. Membership Fees and Training Costs
   Many officials are required to join professional organizations or undergo certification and training. Fees for organizations like USA Gymnastics or U.S. Soccer, as well as safety certifications, are tax-deductible.

2. Uniforms and Equipment
   Uniforms specific to your role (e.g., referee shirts with logos) are deductible, as are whistles, scorecards, flags, or any other equipment you use exclusively for officiating.

3. Office Supplies and Technology
   If you use an iPad, laptop, or other devices for officiating duties, these can be partially or fully deductible depending on their usage. Be sure to keep records of what percentage of time these items are used for officiating versus personal use.

4. Travel Expenses

   • Mileage: If you drive to officiate, you can deduct mileage at the IRS standard rate (67 cents per mile in 2024).
   • Overnight Travel: Costs for flights, hotels, and meals when traveling for games outside your local area are deductible.
   • Local Travel: If you have a home office dedicated to officiating, mileage from your home to the game site can also be deducted.           

5. Meals and Entertainment
   Meals during overnight travel are deductible. Additionally, if you have a business-related meal (e.g., meeting with an assigner or fellow officials to discuss work), you can deduct 50% of the cost.

Navigating Questionable Deductions

Some expenses, like gym memberships or massages, fall into a gray area. While these might seem directly related to your role as an official, the IRS typically views them as personal expenses. Robin suggests consulting with a tax professional for clarity. She notes, “The IRS looks for large, unusual, or questionable items (LUQs) during audits. Be prepared to justify these deductions.”

Tracking Expenses

Maintaining accurate records is critical to claiming deductions. Here’s how to stay organized:

1. Keep Receipts
   For every expense, from a referee uniform to gas for travel, save the receipt. Digital apps can help you organize and store these records.

2. Log Mileage
   Use a mileage tracking app or a simple notebook to document the miles driven for officiating. Include dates, destinations, and purposes of trips.

3. Separate Business and Personal Expenses
   Consider opening a separate bank account or credit card for officiating-related expenses. This makes it easier to track and justify deductions.

Making the Most of Your Home Office

Having a dedicated space at home for officiating tasks, such as reviewing game footage or managing assignments, can offer additional deductions. The IRS allows $5 per square foot for a home office, up to 300 square feet. This deduction also opens the door to claiming mileage from your home to local games.

Why It Matters

Treating refereeing as a business doesn’t just benefit your wallet—it also elevates the profession. When you operate professionally, you gain credibility with assigners, teams, and organizations. Additionally, this mindset shift can help you reinvest in your craft, whether by upgrading your equipment or attending advanced training.

Key Takeaways for Referees

1. Refereeing is not just a gig—it’s a business.
2. Filing as a sole proprietor is simple and offers significant tax advantages.
3. Track and claim deductions for memberships, uniforms, equipment, travel, and home office use.
4. Maintain detailed records to justify expenses and avoid issues with the IRS.
5. Consult a tax professional to navigate tricky or questionable deductions.

By adopting a business mindset, referees can maximize their income, reduce their tax burden, and gain the respect they deserve. It’s time to step onto the field not just as an official, but as a business professional. 

Important: This is not intended as tax advice. Please consult a tax and legal professional regarding your own tax situation.