fishing tournies and taxes

[sweeney]

I have been seeing we have quite a few npaa members on this site along with quite a few guys that fish multiple tournaments. My question to you guys is when we win we pay taxes on our winnings, are any of you doing anything to offset this? What tax steps are there? Do you do a form c or d and if so how do those work, is it like gambling losses where you can only claim your expenses if you win money? Thanks in advance as I am sick of paying taxes on winnings that usually aren't enough to cover the gas, oil, bait, and entry fees after the govt takes their share.

 

[DirtyMike]

Simple...I don't win.

 

[Allen]

I suggest stop winning. That'll help remove your problem.


Actually, I am pretty sure there are ways to deduct the expenses, but I would probably pay a professional tax preparer to make sure it's done right. At least for the first time I tried it, then in subsequent years you can follow their methodology.

 

[gonefshn]

Keep track of all your expenses and treat it like a business (which it really is if you do very many). Schedule C for taxes. What I do for collecting receipts is use my phone's camera. I'll take the detailed receipt, write on it the purpose, then take a pic with my phone. I then file them in a folder on the phone and print them all out at the end of the year come tax time. For mileage, keep a little log.

 

[sweeney]

Can you have deductions even the years you don't cash checks? As far as going to professional tax prepares I did that a few times and felt like all they did was fill in the h&r program for me and didn't seem to have an answer for a majority of the questions. I would have no problem paying a tax guy if I knew of one that was confident with steering me in the right direction.

 

[powerman]

I have started to look into this as well Sweeney. I did find a good video that talks about it on the npaa website. It was really informative and pretty much said you need to treat fishing like a business. Make a plan at the beginning of the year and keep really good records. Some guys actually start an LLC. There is alot of good info that the npaa puts out there. Insurance is another one to look at.

 

[shorthairsrus]

Is it a hobby or a business. If a hobby deduct up to income. If a business you can deduct to create a loss. However this is where the grey area is.

 

[eyexer]

I wouldn't want to be trying to prove to the IRS that my fishing is a business if I get a W2 from my employer lol

 

[remm]

Sounds like a wonderful way to get audited if you aren't fishing for a living.

 

[shorthairsrus]

The thing is what you need to prove is that you have a profit motive. That is the key --we all have heard profit 3 out of 5 years -- case law has allowed for more than that. If your just doing local tournaments and no marketing or guiding--- i would say you have no motive. The winnings from the local tournaments put on in ND is a joke. Plenty of case law on the subject from racing and i am sure fishing is in the mix too. [video]https://www.irs.gov/uac/is-your-hobby-a-for-profit-endeavor[/video]https://www.irs.gov/uac/is-your-hobby-a-for-profit-endeavor

 

[DirtyMike]

I've been looking into this as well sweeney. Not for fishing tournaments, but for a tackle business. If I slap some dh customs stickers on my boat and pickup, can I deduct those costs along with part of my house in which the tackle is made. One would think so, but I don't want to spend any evenings going to law school.

 

[sweeney]

thanks boys for the links and info, I am going to do some more record keeping this year just in case we get lucky and have a few checks to cash like in the past, if I find anything else out or anyone has some first hand experience hopefully we can get it posted here. with the AIM trail and the usual 3-5 bigger money tournies in ND, I can see a few people making some good cash and then having to pay a good portion of it to the IRS.

- - - Updated - - -

I wouldn't want to be trying to prove to the IRS that my fishing is a business if I get a W2 from my employer lol

Yea maybe, just sucks having a portion of your return nixed from your w-2 job for tourney winnings when you barely broke even on any of the tournaments or actually lost money though. I'm guessing like someone said if it is a hobby with intent to profit you can deduct, much like when the casino gives you a tax form and you have to show proof of losses up to your winnings.

 

[espringers]

Whether it has a for profit motive or not, you can still deduct expenses to offset winnings at least to the point of zeroing your profits. You would have to have a heck of a year fishing tournaments as a semi pro or amateur to not be able to zero your profits. It's when you start to try and take a loss that you need to be more concerned.

 

[701FishSlayer]

How do you deduct depreciation on the boat?

 

[AR-15]

701 be a farmer, say you use it for checking slough's

 

[eyexer]

701 be a farmer, say you use it for checking slough's

or you use it to deliver meals to the men during harvest or something.

 

[AaronJ]

Keep all receipts related to tourneys (ie: tackle withing a couple weeks of tourney, gas, lodging, etc). Keep track of all miles related to tourneys (even prefishing days withing about 10 days of tourney). Keep track of total fishing days through the season and separate them out into fun vs tourney related days and depreciate your boat on the % tourney days related to total days. Insurance on vehicle and boat can also be deducted in the same manner. Taking a loss isnt going to kill you, it is just recommended to show a profit 1 of 3 or 4 years.

This is what I have done the last number of years per the recommendation of a family mamber that does my taxes and also is an IRS agent. I have yet to be audited.

Keep great records. I print a calendar with 1 month/ 8x10 sheet of paper. Days on the water are clearly identified as tourney vs non. Every receipt is kept and marked to each tourney. Just be meticulous with data collection and proof of expendatures and let your tax accountant do their job.

 

[huntinforfish]

I've been looking into this as well sweeney. Not for fishing tournaments, but for a tackle business. If I slap some dh customs stickers on my boat and pickup, can I deduct those costs along with part of my house in which the tackle is made. One would think so, but I don't want to spend any evenings going to law school.

There are a few things you can do here. I would get a good tax guy and they will tell you how to do things from the get go. My wife works from home and has a home office that we can deduct. In your case, I would think it would be the same thing. The area has to be strictly for business use and the deduction is a square foot calculation.

 

[espringers]

If u are going to deduct a home office expense, make sure you have the rest of your ducks in a row. It's one of the biggest irs red flags there is and the cause of many an audit.