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Taxes on tournament earnings #11340494 01/12/16 05:50 AM
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Okie State basser Offline OP
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Got an income statement on my tournament earnings (it's not much but apparently over the $400 that requires you to report it). My question is, how do you all handle this since I obviously spent much more than I earned on fishing? Just looking for some advice. Thanks!

Moritz Chevrolet - 9101 Camp Bowie W Blvd, Fort Worth, TX - Monte Coon (817) 696-2003
Re: Taxes on tournament earnings [Re: Okie State basser] #11340499 01/12/16 06:04 AM
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backatit Offline
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Pay the tax until you start adding some zeros to that amount

Re: Taxes on tournament earnings [Re: Okie State basser] #11340557 01/12/16 11:15 AM
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Jigfish Offline
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something I don't have to worry about. Winning, Me, That's funny.


Thanks,

The weak call it obsession, the strong call it dedication!
Jigfish

Re: Taxes on tournament earnings [Re: Okie State basser] #11340610 01/12/16 12:39 PM
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KingwoodCat Offline
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Originally Posted By: Okie State basser
Got an income statement on my tournament earnings (it's not much but apparently over the $400 that requires you to report it). My question is, how do you all handle this since I obviously spent much more than I earned on fishing? Just looking for some advice. Thanks!


You have to keep the receipts. Gas for truck and boat, fishing tackle receipts, figure a certain amount per day for food, lodging receipts, etc. Its a business and it has to be treated like one.


"Any man who thinks he can be happy and prosperous by letting the government take care of him had better take a look at the American Indian".

Henry Ford
Re: Taxes on tournament earnings [Re: KingwoodCat] #11340682 01/12/16 01:44 PM
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Originally Posted By: KingwoodCat
Its a business and it has to be treated like one.


I would presume that most people would be better off treating it as a hobby for tax purposes, not as a business. It always has been interesting to me that there isn't more discussion on how people handle tournament winnings with regard to taxes.

Re: Taxes on tournament earnings [Re: backatit] #11340690 01/12/16 01:47 PM
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RedRanger Offline
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Originally Posted By: backatit
Pay the tax until you start adding some zeros to that amount


Agreed......

Re: Taxes on tournament earnings [Re: Okie State basser] #11340695 01/12/16 01:50 PM
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Hoss Holding Offline
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If you don't have your receipts, you can also submit bank or credit card statements so you don't have to pay taxes or very little taxes on the hobby, of course that is something I don't have to worry about either, lol


I am blessed to have a opportunity to live a childhood dream as a professional wrestler

Re: Taxes on tournament earnings [Re: Okie State basser] #11340696 01/12/16 01:50 PM
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WillieKetchum Offline
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It's very simple. You will now have to file a Schedule C on your tax return. You then have 2 choices when filing.

Let's say you won $1000.

1) Claim $1000 in winnings and then claim $1000 in expenses (however you want to break it out - $500 in entry fees, $300 in fuel, $200 in tackle). This will simply show you breaking even at your business and you will not be required to pay any taxes on the $1000 winnings.
2) Claim $1000 in winnings and then claim ALL your expenses against it thus showing a LOSS for your business (fishing). In this scenario, if you claim $3000 in expenses, the additional $2000 loss will also knock down your W2 income allowing you to have to pay less taxes on it (resulting in a larger total return).

I do not suggest option #2. This is a good way to get audited and end up owing back taxes because at the end of the day, it's really just a hobby for you. I think if you can fish and it not cost you anything in the end, you're a winner. That's why I go with option #1.

As far as receipts...you do need to keep receipts, credit card statements, etc showing expenses just in case you do get audited. You will not send them in with your tax return.

Re: Taxes on tournament earnings [Re: Okie State basser] #11340697 01/12/16 01:51 PM
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^^^^^^.... Pay the tax unless there at least four zeros and you fish for a living. Kinda like gambling or winning a jackpot on a slot or table game... It's a hobby not a career.

Re: Taxes on tournament earnings [Re: Okie State basser] #11340716 01/12/16 01:59 PM
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Back when I was fishing all of the time I didn't win a lot of money but I was fishing pretty much every weekend for a few years.
I kept a spiral notebook and would use each page for a week and weekend for the year.
On each page for that time period I would list everything that had to do with a tournament or practicing for a tournament. Hotel bills, lures, entry fees, etc. and I used to write down mileage from the time I left the house until I got back home. I kept receipts and each year I would turn that over to my tax person. I was lucky enough for a couple of years to win 2 to 3 thousand dollars and for what I remember this really worked in my favor when tax time came around and I never had to pay any tax on winnings because of this record keeping.


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Re: Taxes on tournament earnings [Re: Okie State basser] #11340723 01/12/16 02:02 PM
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teamchampion Offline
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Tax guy might charge you more to file additional forms than just paying the tax would be. Also could create situation that IRS looks at more closely and trigger an audit.

Re: Taxes on tournament earnings [Re: teamchampion] #11340733 01/12/16 02:07 PM
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Originally Posted By: teamchampion
Tax guy might charge you more to file additional forms than just paying the tax would be. Also could create situation that IRS looks at more closely and trigger an audit.


This right here, it takes time to set up a new Sch C in tax systems correctly, dont treat it like a business when it isnt a business. Im sure you spent more in tournament entry fees than that 1 bigger win. If anything i would just write it off as a hobby and show entry fees as expenses. I make copies of entry forms for all the bigger tournaments i enter during the year


John Miller
Re: Taxes on tournament earnings [Re: Okie State basser] #11340748 01/12/16 02:12 PM
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Years ago I competed in another sport on weekends and made quite a bit of money. If my memory serves me correctly I used to file a 'schedule C' return
along with my regular incomes. I kept all my expenses/incomes and gave to my tax guy. It helped to not have to pay taxes on my secondary winnings which usually was more-less a push.

Re: Taxes on tournament earnings [Re: Okie State basser] #11340764 01/12/16 02:17 PM
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Jumpin J Offline
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I've been doing this, since 1996: File it separate, as fishing. You don't have to keep receipts, just add your Entry Fees and Mileage, to and from,(including practice), against any earnings you may have. Always a loss, deducts from Income Taxes, my Accountant doesn't charge me extra. Allowed cost of Mileage, is much easier than trying to nickel and dime them, with every little receipt.

Re: Taxes on tournament earnings [Re: UTDmiller] #11340787 01/12/16 02:25 PM
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ezbassin Online Content
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Originally Posted By: UTDmiller
[quote=teamchampion]Tax guy might charge you more to file additional forms than just paying the tax would be. Also could create situation that IRS looks at more closely and trigger an audit.


This right here, it takes time to set up a new Sch C in tax systems correctly,



^^^^^^^^^This is not correct. Schedule C is just an IRS form to list your business income and expenses, no "tax system set up", just fill in the blanks.




https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

Last edited by ezbassin; 01/12/16 02:28 PM.
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