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Taxes on tournament earnings
#11340494
01/12/16 05:50 AM
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Joined: Mar 2010
Posts: 30
Okie State basser
OP
Outdoorsman
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OP
Outdoorsman
Joined: Mar 2010
Posts: 30 |
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!
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340499
01/12/16 06:04 AM
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Joined: Jun 2010
Posts: 785
backatit
Pro Angler
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Pro Angler
Joined: Jun 2010
Posts: 785 |
Pay the tax until you start adding some zeros to that amount
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340557
01/12/16 11:15 AM
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Joined: Feb 2003
Posts: 2,940
Jigfish
Extreme Angler
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Extreme Angler
Joined: Feb 2003
Posts: 2,940 |
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
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340610
01/12/16 12:39 PM
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Joined: Oct 2004
Posts: 38,822
KingwoodCat
TFF Guru
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TFF Guru
Joined: Oct 2004
Posts: 38,822 |
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
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Re: Taxes on tournament earnings
[Re: KingwoodCat]
#11340682
01/12/16 01:44 PM
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Joined: Feb 2007
Posts: 1,476
fwfisher
Extreme Angler
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Extreme Angler
Joined: Feb 2007
Posts: 1,476 |
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.
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Re: Taxes on tournament earnings
[Re: backatit]
#11340690
01/12/16 01:47 PM
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Joined: Aug 2003
Posts: 30,306
RedRanger
burro desagradable
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burro desagradable
Joined: Aug 2003
Posts: 30,306 |
Pay the tax until you start adding some zeros to that amount Agreed......
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340695
01/12/16 01:50 PM
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Joined: Mar 2012
Posts: 1,120
Hoss Holding
Extreme Angler
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Extreme Angler
Joined: Mar 2012
Posts: 1,120 |
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
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340696
01/12/16 01:50 PM
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Joined: Jun 2015
Posts: 547
WillieKetchum
Pro Angler
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Pro Angler
Joined: Jun 2015
Posts: 547 |
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.
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340697
01/12/16 01:51 PM
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Joined: Sep 2010
Posts: 2,580
GROD
Extreme Angler
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Extreme Angler
Joined: Sep 2010
Posts: 2,580 |
^^^^^^.... 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.
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340716
01/12/16 01:59 PM
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Joined: Dec 2001
Posts: 7,377
TBassYates
TFF Celebrity
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TFF Celebrity
Joined: Dec 2001
Posts: 7,377 |
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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Joined: Dec 2015
Posts: 30
teamchampion
Outdoorsman
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Outdoorsman
Joined: Dec 2015
Posts: 30 |
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.
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Re: Taxes on tournament earnings
[Re: teamchampion]
#11340733
01/12/16 02:07 PM
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Joined: Oct 2013
Posts: 2,576
UTDmiller
Extreme Angler
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Extreme Angler
Joined: Oct 2013
Posts: 2,576 |
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
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340748
01/12/16 02:12 PM
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Joined: Sep 2006
Posts: 12,433
JIM SR.
TFF Guru
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TFF Guru
Joined: Sep 2006
Posts: 12,433 |
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.
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Re: Taxes on tournament earnings
[Re: Okie State basser]
#11340764
01/12/16 02:17 PM
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Joined: Jan 2011
Posts: 447
Jumpin J
Angler
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Angler
Joined: Jan 2011
Posts: 447 |
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.
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Re: Taxes on tournament earnings
[Re: UTDmiller]
#11340787
01/12/16 02:25 PM
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Joined: Jan 2004
Posts: 16,815
ezbassin
TFF Guru
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TFF Guru
Joined: Jan 2004
Posts: 16,815 |
[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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