Tax Deductions for Coaches: Life Coaching, Business Coaching, and the SSTB Question

The coaching industry, which includes life coaching, executive coaching, business coaching, health coaching, and career coaching, has exploded in size over the past decade. Coaches are typically self-employed, filing Schedule C and paying self-employment tax on their net profit. The deductions are similar to other service-based sole proprietorships, but coaching faces a unique question under the QBI deduction rules: is coaching a specified service trade or business (SSTB)?

Is coaching an SSTB?

The Treasury regulations (Treas. For current guidance, see IRS Publication 535 (Business Expenses). Reg. 1.199A-5(b)(2)(vii)) define “consulting” as a business providing “advice and counsel” to clients to assist them in “achieving goals and solving problems.” This description closely matches what most coaches do: they help clients set goals, develop strategies, overcome obstacles, and achieve results through conversation, frameworks, and accountability.

Likely SSTB: Business coaching, executive coaching, leadership coaching, career coaching, life coaching, and health/wellness coaching. These activities involve providing personalized advice based on the coach’s expertise and judgment, which is the hallmark of a consulting SSTB.

Possibly not SSTB: Fitness coaching (more analogous to personal training, which is not an SSTB), sports coaching (athletics in the SSTB context refers to athletes competing, not coaches), and coaching that is primarily educational (selling courses, group programs, or digital products where the principal asset is the content, not the coach’s personal involvement).

The practical effect: a business coach earning $400,000 (MFJ) gets zero QBI deduction if classified as an SSTB (the deduction fully phases out above $533,900 MFJ for 2026). If not classified as an SSTB, the coach gets a $80,000 QBI deduction (20% of $400,000), saving approximately $29,600 in income tax at the 37% bracket.

What can coaches deduct?

Certification and training: Coach training programs (ICF accredited, CTI, iPEC, etc.) are deductible as professional development expenses. These programs typically cost $5,000-$20,000. The cost is deductible in the year paid, even if the program spans multiple years.

Software and technology: Video conferencing (Zoom Pro, $150-$200/year), scheduling (Calendly, Acuity, $100-$300/year), CRM (HoneyBook, Dubsado, $300-$600/year), course platforms (Kajabi, Teachable, Thinkific, $500-$2,000/year), email marketing (ConvertKit, Mailchimp, $300-$1,200/year), and website hosting ($150-$500/year).

Marketing: Online advertising (Facebook, Instagram, LinkedIn, Google), content creation (blog writing, podcast production, video editing), social media management, and public relations. A coach who hires a virtual assistant for social media management deducts the assistant’s fees as a subcontractor expense.

Home office: Most coaches work from home, conducting sessions via video. The home office deduction requires exclusive and regular use. The simplified method ($5/sq ft, max $1,500) or the actual method (percentage of home expenses).

Travel: Flights, hotels, and 50% of meals for speaking engagements, conferences, retreats, and in-person client sessions. The travel must be primarily for business.

Professional development: Mastermind groups, mentoring programs, books, online courses, and conferences. These are deductible as business education expenses.

When should a coach elect S-Corp?

The S-Corp election reduces payroll tax when net profit exceeds $80,000-$100,000. For coaches who are classified as SSTBs, the S-Corp election creates an additional consideration: a higher salary reduces K-1 income (and the QBI deduction), but for SSTB coaches above the phase-out threshold, the QBI deduction is already reduced or eliminated, so the salary-versus-QBI tradeoff is less relevant.

For coaches below the phase-out threshold, the analysis is the same as for any service business: the S-Corp saves payroll tax but reduces QBI. The net savings depend on the coach’s income level and marginal tax rate.

Related guides:

• Entity structure for coaching businesses: S-Corp planning around the SSTB classification, how to structure a coaching business when the SSTB label affects the QBI deduction and S-Corp salary decisions
• Online courses and digital products tax treatment for coaches
• Retirement plans for coaches and SSTB threshold planning
• Tax reporting for coaches with international clients: foreign income, withholding, and currency
• Estimated taxes for coaches with variable income
• Tax treatment of group coaching programs, masterminds, and digital products

How do specified service trades or businesses affect your QBI deduction?

Specified service trades or businesses (SSTBs) including law, medicine, accounting, consulting, financial services, and performing arts face a phase-out of the QBI deduction at higher income levels. For 2025, the QBI deduction phases out for SSTBs between $191,950 and $241,950 for single filers and $383,900 and $483,900 for joint filers, with zero deduction above the upper threshold. Non-SSTB businesses above the income threshold are limited to the greater of 50% of W-2 wages or 25% of W-2 wages plus 2.5% of the unadjusted basis of qualified property, but they never lose the deduction entirely. The SSTB classification looks at the principal asset of the business, so if more than 10% of gross receipts come from specified service activities (5% for businesses with over $25 million in gross receipts), the entire business is treated as an SSTB.

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.