Tax Help for Tourney Winnings

[cruizer]

Claiming my winnings under Hobby Income in my taxes and claiming entry fees under Hobby Expenses. I was told by another angler that I can't use entry fees as a right off. Does anybody have an answer for me. I do my own taxes, always have. this is the 1st time I claim winnings.

[fishwithron2]

My tax man told me that you can't use it as it's a HOBBY and it'll up throw up a red flag and chances's are that you'll get audit. Told me that it's just not worth it if you get called in.

[kopper_bass]

cruiser,
i'm no tax attorney, so my advise is only my personal understanding.
1) definitely get advise with a tax accountant if you intend to claim fishing as a business, or if the dollars are large.
if not, then here is what I believe to be the case.

you should claim prize money as taxable income. it would go under hobbies or etc. You can then write off direct expenses in the pursuit of that cash prize, up to the total winning amount, for a net zero gain/loss. you cannot claim anything more than that.

If you try to claim more expenses than winnings, and lower your overall tax liability, then you are surely going to get red flagged for an audit; so be forewarned.

this is basically the same rules with gambling and routinely done.

also, if the dollar value you are claiming as winnings is really not significant, and the extra dollars are not pushing you into a higher tax bracket, then it also may be wise to just pay the taxes on it and leave it at that. the more you make issue of this on your taxes, the more likely you are to get audited. so why take that chance for saving a few extra dollars. of course, everyone has their limit on what a "few extra dollars" is.

Hope that can help some.
good luck,

kopper_bass

[Smitty]

Tax issues with fishing. Well, after claiming winnings vs expense as a hobby no audits. 2000-2006. 2007-2010 I fished full time with my only income fishing or dividend interest income and after moving I am getting audited for 2010. I have all the receipts, documented miles, etc... You have the right to take a position on your taxes but you may have to defend that position if audited. Keep all your receipts. Document all your miles etc...the exception is if you make a lot of money in your job and a little fishing watch out. Do not let your tax guy tell you it's a red flag, you have the right to claim it as a business if it is your main source of income. Just be prepared that you will have to document your winnings, advertising expenses, etc... They will send you a little survey of what the trips were for etc... make copy's of all receipts (thermals fade) and if you get audited be ready.

Smitty

[scott h]

The best advice I can give you is take it to a tax professional, you are from Brentwood go to Brentwood taxes and let them have a look, they have been doing my taxes for years and in the past I have been able to claim/write off certain things fishing wise and never had a problem but that's what they do, they will tell you what you can and cannot claim based on your situation.