Tax Claims for 2005 Tournaments

[MsgMills]

If i'm not mistaken, you could claim this money under the Hobby income section, and claim the cost of the expenses up to the amount of the Hobby income...But check with whomever dose your taxes, or call the IRS. They should also have a Publication that pertains to Hobby income and expenses...

The reason I'm telling you this is, because I prepare Taxes for individuals as a Hobby and I have Hobby income, but also have Hobby expenses to offset the income... Contact me if I can help you out any further.

[MsgMills]

Also, it doesn't matter who prepares your taxes to the IRS...You signed the Tax Returns saying the numbers entered are true and Accurate to the best of "YOUR" knowledge. So the IRS holds no one responsible but "YOU". If you had a Company like H& R Block fill out your Taxes for you, then you can only say they filled them out with the info I supplied them with, nothing more, nothing less...

Believe it or not, but I have been Audited about 3 times in my life...I make it a habit of "NOT" reporting 100% of my deductions when I file...Why you ask, because if and when I'm Audited, I then claim 100% of all deductions allowed to the maximum allowed by law that I have to claim... 2 out of the 3 times I was Audited resulted in me receiving another refund, plus interest dating back to that year in question...True Story.... The 1 time I didn't get a refund back after the Audit, was due to a typo error when I prepared my taxes in the first place. Only resulted in giving back part of the Original Refund I received for that Tax Year...

Hope this helps out some for you....

[Lowerider]

Lowerider,
Great info! In your opinion does gambling fall under any of the critera of having fun and trying to make money? Once heard that losses in that can be a write off. I know i'm getting off the subject a little but i would love to hear a professional opinion. Thanks.

Yes, you face similar circumstances in proving you are a professional gambler in able to write-off losses in excess of winnings. Similar to tourney fishing, you can always write-off expenses equal to winnings regardless if you are a pro or not. It gets tricky for state tax purposes; if you live in a state that does not allow itemized deductions like OH you basically get screwed since the losses are written off on Sch A (as an itemized deduction). There are many cases out there regarding this situation and if you're really interested in learning more you could probably do a google search to find more info.

Keep in mind there are many factors for determining whether or not you are a "pro" other than enjoying the activity. Many people love what they do. It's just another hurdle in a long list.

[Lowerider]

Oops, sounds as though I might have stepped on someone's toes not meaning too. However you have to admit that second opionions never hurt anyone. It would seem to me that if one advisor said no you can not and another said yes you can then, due to him accepting responsibilty for doing my taxes, it would make sense for me to go to the one that said I can. Am I missing something? If so please advise.
Thanks,
Marty

Fishin 4 Fun hit it on the head. The ultimate responsibility for information reported on a tax return lies with the taxpayer not the tax preparer. I'm certainly not saying it can't be done so please don't misconstrue what I'm saying. I'm suggesting that if you are going this route make sure you have all your i's dotted and t's crossed as far as record keeping obligations go. The odds are in your favor as far as being audited goes since only a small fraction of returns get audited. Filing a schedule C greatly increases your odds of being pulled for a random audit. Just make sure you are aware of the risks and decide if that extra $500 refund is worth the potential trouble of defending the deductions.

On a final note, I recommend all tourney fisherman keep some log of expenses so that when you do win some money and you get a 1099 you have documentation to at least off-set your winnings.

[DJD]

Fishin 4 Fun hit it on the head. The ultimate responsibility for information reported on a tax return lies with the taxpayer not the tax preparer. I'm certainly not saying it can't be done so please don't misconstrue what I'm saying. I'm suggesting that if you are going this route make sure you have all your i's dotted and t's crossed as far as record keeping obligations go. The odds are in your favor as far as being audited goes since only a small fraction of returns get audited. Filing a schedule C greatly increases your odds of being pulled for a random audit. Just make sure you are aware of the risks and decide if that extra $500 refund is worth the potential trouble of defending the deductions.

On a final note, I recommend all tourney fisherman keep some log of expenses so that when you do win some money and you get a 1099 you have documentation to at least off-set your winnings.

I'm sold on the idea that it's a risk that most of us shouldn't take. I know i won't and i appreciate the great info.

[Fishin_4_Fun]

AFAIK, unless the tax code has changed recently, as a hobby you can only deduct up to the portion of your winnings that's above 2% of your Adjusted Gross Income.

For example:
If your AGI is $50,000
2% of that is $1,000
You win $10,000 in tourneys
You can only deduct $9,000 in expenses, even if you actually had more than that

[MsgMills]

Yep, that was what I was saying and meaning, at least you can recoup some of your expenses over the 2% limit of your AGI.....