Bass Fishing Forum - Westernbass.com

My taxes are not to complicated so I usually do them myself. I'm looking for some info on how to write off some expenses associated with tournament winnings. I've heard you can write off up to the amount you won but not sure how complicated it is.

TritonBrent wrote:My taxes are not to complicated so I usually do them myself. I'm looking for some info on how to write off some expenses associated with tournament winnings. I've heard you can write off up to the amount you won but not sure how complicated it is.

Brent,
Get ahold of Senko. He has the guy your looking for.............

Had a friend who specializes in Tax accounting do mine last year.

There are kind of two ways to go about it.

I'm not sure the specifics, because honestly I don't know what he used but...One will be a hobby write off, which I believe is the easier to prove, and the other is a secondary source of income which you will be audited on almost guaranteed. So if you decide to go that route be prepared to get F'ed by the IRS.

Again, I'm not sure what my friend used, but it still cost me a lot due to not saving receipts, magazine clippings, etc etc to help strengthen my case.

If you have a full time job It may cost you more then it's worth!! If you are self employed or own a CO then it easy.

I have been audited twice by the IRS for fishing. All I will say is that unless you can prove that you are a professional bass angler or had a profit motive you may be in for far more trouble than its worth.

During my audits I had to bring in copies of contracts, guide license and bonding, and copies of magazine/newspaper articles, receipts, etc.

I would suggest contacting a tax expert before I even attempted to write off fishing as a business.

In a nutshell, if you are only wanting to write off expenses to the amount of winnings do it as a hobby expense. You must have receipts for entry fees, travel expenses etc...The business route is more complicated but offers greater deductions. Boat depreciation being an example. However, if you have a "real" full time job with substantially more income than your winnings, you will get audited and probably not allowed to take it as a business. I have done both hobby and business. Hobby when I worked full time and business when fishing full time but I have a CPA do my taxes which I think decreases the odds of getting audited (this last statement is absolute opinion). A long time ago I did accounting for an investment firm including taxes (K-1's) and I would recommend spending the money on a CPA if you won a significant amount.
Hope this helps!
Smitty

pm sent

If you're writing off your expenses, I'm no longer paying for gas...

Hey Brent,
Call Dean Hendricks at H&R in Lodi. He was a Tournament Pro and knows how to get it done for you.

Tim

LHayes wrote:pm sent

I need help too! Anyone with any info on this matter, I would really appreciate it!

g-man wrote:

LHayes wrote:pm sent

I need help too! Anyone with any info on this matter, I would really appreciate it!

+1
Someone can PM me with some good info as well. I did not make a lot of money last year but enough to have to pay on it.

I guess im not getting one after all!!!

Thanks,
John

The most important thing is to report all your income. Most tournament anglers will fall into the hobby category - not a business. Regardless, keep really good records. Keep all of your receipts and a calendar of your travels. If you start trying to depreciate your boat, you need to keep records of basically each time you used it and what % was business vs. personal. You'll likely get audited by the IRS. Try and find a CPA with other Pro clients. In the long run, unless you've made a bunch of money, or lost a ton of money, it's probably not worth trying to file as a business. If you are serious about it, then you should consider actually starting some type of LLC and conducting your pro fishing career as a business - not a hobby.

I've been writing off my bass fishing as a business for 16 years. It's gonna either be a hobby, or a business, each with it's own set of rules. The very first two years, it was as a hobby fer me and I did get audited for 1994. I had the records and everything went smoothly other than the time waisted in prepairing and processing for the audit, a definate pain. We're not talking about a whole lot of money here in the overall scheme of what the IRS deals with on a daily basis, but my changes in my tax return from one year to the next, was a definate RED FLAG for them. I actually got some purty good insight and advice from the Auditor himself, that first year, on what to do and how to prepair.

If you do not get 1099'd, don't even worry bout it. It will definately be a red flag if your requesting deductions and showing a loss as a hobby. If ya do git 1099'd, unless it's a significant amount, like over $5k, your still better off just reporting the 1099 income and not worrying about the deductions. For most, especially those with a day job, your regular taxes that are being withheld, will typically protect you from having to pay additional taxes on what income ya got from fishing. It may reduce your return some, but that's to be expected. At least ya won't have the IRS putting you thru an audit.

Now if that 1099 is indeed over $5-10k, then there are certainly options available to you and it is best to employ a specialist who is better suited at prepairing your taxes and assuring you are doing so in accordance with the IRS regulations. As someone else above mentioned, it is always a big plus when the IRS sees that a specialist has prepaired yer taxes for you.

Writing it off as a business comes with more complicated regulations. To do so, you MUST file Schedule C. You better have a guide liscense AND a business checking account. It also helps to have the appropriate guide umbrella coverages on yer boat for guiding. This still may not prevent the first years audit as RickyS mentioned, but it certainly will play a huge role in convincing the IRS it is indeed a business. As with any small business, you can get away with only 2 consecutive years of losses and not get questioned. No doubt, if ya take this route, you better hire someone to prepair your taxes properly for you to avoid tossing out red flags triggering the audits.

Bottom line Brent, if yer gonna include the fishing into your taxable income, whether it be as a hobby or business, you better consult a proffessional, or don't even bother.

As a regular employee and bread winner for my family I dont know if its worth claiming 'right offs' for the income shown on my 1099 from the local circuit?? An audit is not something i want to fuss with.

I dont fish for money, i fish for fun and until now competing was fun and winning along the way made it that much more of a pleasure. Having to pay taxes on that money doesnt make alot of sense to me when i already pay alot of taxes in my regular day job??

Im thinking going back to the club circuit only might make good sense??

Later; Big Ed!

Brent,

My wife is a licensed tax preparer and an accountant with a non profit who regularly deals with auditors (internal, state and federal). She obviously handles my taxes. Even in the year my team partner and I won a boat it was not worth (in her opinion) trying to write off anything against that income. Granted it may be different depending on your total income. We are both full time professionals that also do side work, in the end it was just too much hassle to go for any write offs. Tempting a personal audit for a minimal write off just doesn't seem worth it to me.

Scott