Tournament Wins & Taxes

[jhoffman]

When you win a large tournament, is that like hitting the lottery in that they take the taxes on the spot? Do you claim it as extra income on your filing at year end? Do you have to pay on it quarterly, how does it all work? Do they send you a w2 at the end of the year?

 

At what point do you have to start claiming it, $1000+ in total wins?

[wnybassman]

I think it is $600.   I had 1099's sent to me two years in a row, but it was very easy to offset the income with expenses.

[james 14]

I think it is $600.   I had 1099's sent to me two years in a row, but it was very easy to offset the income with expenses.

 

Yeah by the time you deduct for boat, gas, tackle and licenses you could get a return!

[wnybassman]

Yeah by the time you deduct for boat, gas, tackle and licenses you could get a return!

 

Can't get a return, can only break even.   I asked.    lol

[gripnrip]

In order for expense deductions, it needs to be a business.  

[jhoffman]

I thought you could itemize your costs of doing the job, much like a mechanic needs tools?

 

Can you fly under the commercial fisherman area?

[SirSnookalot]

I don' have the exact answer but an email to the irs and state would yield the correct answer, or your CPA.

Can you fly under the commercial fisherman area?

Perhaps if one held a commercial fishing license, if one doesn't it's a moot point.

Yeah by the time you deduct for boat, gas, tackle and licenses you could get a return! 

Probably most would be filing single or jointly if married and not file a schedule C, your 1099's would be included with your other 1099's or w-2's and you would be entitled to deduct allowable deductions, interest, charities , etc. But it brings us back to the beginning, are fees, gas, tackle, boat depreciation, travel expenses, repairs, etc etc., allowable for a recreational fisherman who just happens to win some money.  I'm going to make an uneducated guess.......NO.  All that said, you can deduct whatever you want, as long as it doesn't get audited, lol.

[wnybassman]

I don't remember exactly what my CPA told me, but said something about the Misc. 1099's and I could have expenses against that particular income only.  The first year I had fishing income from one organization that totaled $3700 or so, and I had receipts for over $5000 to wash it out.    It was his idea, not mine.   I only saved receipts just in case.    The second year was only $1200 or so.

[Megastink]

I hear that you can deduct hobby (fishing) expenses up to the amount of your (tournament) winnings. So, I I won $300, I can deduct $300 worth of gear.

My tax preparer at H&R block told me thAt, but you need receipts from your winnings.

[Gavin]

If someone gives you a 1099 you better declare the income. Most Tournament winnings will be hobby income. Report the income and offset it with your hobby expenses up to the amount of your hobby income(You cant use a hobby loss to offset other income as if it were a legitimate trade or business). Talk to your CPA and consult the IRS's Hobby Loss Rules for guidance.