Well then you are self-employed if you got 1099 misc...you can offset the taxes on that income...and only that income.

It is like a part time or second job. Lot of people have more than one.

Always show a little income ( don`t try to write it all off ) and you will be fine. Pay a little taxes on your winnings and you will be ok.

If you are writing off more than you make, it is a hobby and a red flag.

IMHO, better to do your own taxes, or rely totally on the pro guy, who may be wrong. You can also call the IRS,.......they are friendly now

You don't want to treat it as self employment (earned income) then you bring in self employment tax to it. That would be both sides of ss tax on anything left. You can probably write off entry fees for your tourneys, gas to and from, lodging. For the events themselves and that it about it. Anything else is going to potentially cause problems. Now if you happen to be a guide as well then you get into a different deal. Just be careful. Don't know what your tax bracket is but it very well might not even be worth it to work very hard at this.

So the way I'm reading these post is that you can only write off expenses if you made money and only up to the amount you made?

Also, I know for real questions consult a CPA.


Jody

I just schedule another meeting with him. Ill let yall know how it goes.

Professional fisherman have these awesome things called contracts. That is one way they legitimize what they are claiming.

I don't think you "wrote off" your home office.You may have taken depreciation on the square footage of your office. If you did then you would have to recapture the depreciation when you sold the house and pay tax on it.At least thats the way I understand it.

You basically have to treat it as a business from the start. If you end the year ahead and decide "hey I can write off more if I file a Schedule C" then you will probably be denied. I have done it in the past and quit when I lost the ability to devote the time to it as I would any other for profit venture.

Have a look at this ruling. It pretty well lays out what the courts look at when determining if an activity is a hobby or for profit.

http://law.onecle.com/tax/2006/h2ill.sum.wpd02.html


And, no, it does not have to be a significant amount of income nor do you have to quit your regular job. You just have to pursue it as if you are trying to make a profit.

But, yeah, contact your tax guy. Look for Mike Whitten in Tennessee, He's a CPA that fishes and has written some articles on this.

If you don't want to go the business route with a Schedule C and the Self emplyment tax, etc. Then you can write off expenses for hobbies up to the amount to won. Several above have mentioned that. That's what most fishermen are going to qualify for.

No need to be sorry. You have received some really good advice to take to your CPA. What I was saying is, just don't take what you have received here as legal advice. I've learned that some of these people on here are pretty smart folks, but most here aren't lawyers and CPA's and when it comes to the IRS you don't want to use advice from friends as the final say. Believe me, I know of what I speak.

I'm not a CPA but I did stay at a Holiday Inn Express last night.

I would follow these type of instructions directly from the IRS website. This is for gambling but it seems to be closely associated with your situation.

Topic 419 - Gambling Income and Losses

The following rules apply to casual gamblers. Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 (PDF) and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income.

A payer is required to issue you a Form W-2G (PDF) if you receive certain gambling winnings or if you have any gambling winnings subject to Federal income tax withholding. All gambling winnings must be reported on your Form 1040, including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax.

You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A, as a miscellaneous itemized deduction that is not subject to the 2% limit.

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.

I'm a CPA, but I do not specialize in tax.

General rule: you can writeoff expenses incurred in pursuit of the income earned.

There are hurdles to overcome inorder to claim your tournament fishing is not a hobby, which will effect your deductions (such as depreciating your boat).

I would certainly go with professional advice from a CPA, and if you're CPA isn't sure, they should be able to contact other peers in the business to get it right.

Otherwise you may want to look at adding the road tax on gas as another write off. Keep track of every gallon used on your boat. For example - I use about 2000 gal of gas per year. Let's say the road tax contained in the price of gas is $.38. Well, 2000 X .38 = $760 refund...

I wrote off the wife and man I got to fish so much more.

This is correct unless you can convince the IRS that you tourney fishing is in pursuit of taxable income (if) you get audited.

Google--Schedule C instructions 2011. It will give you the rules for deducting business expenses. Hobby loss instructions are in Publication 17 (beginning with page 92) and it will tell you that you can deduct expenses up to your winnings if the activity is a hobby and not engaged in for a profit, if you can deduct expenses on a schedule A. You may have to prove a profit motive if you deduct expenses on a Schedule C and you get audited.

^^ This ^^ ... and I understand why you might bring this up here ... but, Dude, we're just dumb fishermen ... even the smart one's here.

Trust and rely on your CPA once you've met in person and laid out everything in front of him and fully discussed your situation. Don't even trust the advice of a CPA based on a mere conversation, phone call, or "Forum Posting". There are likely CPA's on here and probably some very qualified in tax issues. But they would also probably be the first to tell you to meet with someone personally to discuss your situation.