Old 'losing' lottery tickets do NOT count as receipts, unless you have proof that you paid for them.
APA sending out 1099 to players?
- Thread starter AcuraHeel
- Start date
Old 'losing' lottery tickets do NOT count as receipts, unless you have proof that you paid for them.
Stick $1 in the machine for a scratch-off. The machine spits out a lottery ticket, only a ticket, and nothing else.
The 'losing' lottery ticket IS the receipt/proof !!!
These publications are what the APA should be giving you:
Topic 419 - Gambling Income and Losses
The following rules apply to casual gamblers. Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 (PDF) and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income.
A payer is required to issue you a Form W-2G (PDF) if you receive certain gambling winnings or if you have any gambling winnings subject to Federal income tax withholding. All gambling winnings must be reported on your Form 1040, including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax.
You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A, as a miscellaneous itemized deduction that is not subject to the 2% limit.
It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.
Topic 419 - Gambling Income and Losses
The following rules apply to casual gamblers. Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 (PDF) and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income.
A payer is required to issue you a Form W-2G (PDF) if you receive certain gambling winnings or if you have any gambling winnings subject to Federal income tax withholding. All gambling winnings must be reported on your Form 1040, including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax.
You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A, as a miscellaneous itemized deduction that is not subject to the 2% limit.
It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.
I think that money won by performance in a pool tournament does not count as gambling. I think that if it was gambling, the State of Nevada would be a lot more involved.
First of all, lottery tickets or other gambling losses won't help at all with the 1099 you get from APA. Gambling losses can only be used to offset gambling winnings, and those are reported on a 1099-G. If a pool tournament was considered gambling, it would be illegal to conduct them in most bars/rooms across the country.
Second of all, the 1099 you get has nothing to do with tax deductions made by APA from their revenue. Regardless of the reported value of what they gave you, they are only allowed to deduct the actual cost to them, as shown on receipts and invoices.
Third, the retail values of the prizes awarded are determined by the manufacturers of those prizes, not the APA. If the makers of the Outlaw cue put something special on it, like an APA logo or something, and say that makes it a "commemorative edition" cue, they can estimate its retail value at a higher number because it is scarce. Same thing applies to the jacket - even though I am an APA operator I cannot get one of the cues or jackets, so it doesn't surprise me to see numbers like that.
Fourth, if they could, APA would skip the whole 1099 business. As I mentioned, it has no impact whatsoever on their taxes. It's just something the government makes them do, so the government can get into your pocket a little more. They would get in big time trouble with the IRS if they didn't do it. Trust me, they would LOVE to skip the trouble/expense of all that reporting.
Fifth, the money you pay for league fees, minus the portion that is for stuff like trophies, patches, and other awards, is already reported to the IRS as revenue for the operator. For awards/money distributed locally, it is up to the operator to comply with IRS reporting requirements. In almost all cases, the local operator complies by awarding less than the IRS minimum. For example, if the operator awards travel assistance for nationals, the amount is usually less than $600 per person, so a team of eight can receive $4,799 without getting 1099's, AS LONG AS they don't receive more in the same calendar year for other stuff.
I believe you can deduct from your income certain expenses related to the singles tournament (such as travel and whatever entry fees you paid), but don't take my word for it. You should really consult with a tax professional for that.
Second of all, the 1099 you get has nothing to do with tax deductions made by APA from their revenue. Regardless of the reported value of what they gave you, they are only allowed to deduct the actual cost to them, as shown on receipts and invoices.
Third, the retail values of the prizes awarded are determined by the manufacturers of those prizes, not the APA. If the makers of the Outlaw cue put something special on it, like an APA logo or something, and say that makes it a "commemorative edition" cue, they can estimate its retail value at a higher number because it is scarce. Same thing applies to the jacket - even though I am an APA operator I cannot get one of the cues or jackets, so it doesn't surprise me to see numbers like that.
Fourth, if they could, APA would skip the whole 1099 business. As I mentioned, it has no impact whatsoever on their taxes. It's just something the government makes them do, so the government can get into your pocket a little more. They would get in big time trouble with the IRS if they didn't do it. Trust me, they would LOVE to skip the trouble/expense of all that reporting.
Fifth, the money you pay for league fees, minus the portion that is for stuff like trophies, patches, and other awards, is already reported to the IRS as revenue for the operator. For awards/money distributed locally, it is up to the operator to comply with IRS reporting requirements. In almost all cases, the local operator complies by awarding less than the IRS minimum. For example, if the operator awards travel assistance for nationals, the amount is usually less than $600 per person, so a team of eight can receive $4,799 without getting 1099's, AS LONG AS they don't receive more in the same calendar year for other stuff.
I believe you can deduct from your income certain expenses related to the singles tournament (such as travel and whatever entry fees you paid), but don't take my word for it. You should really consult with a tax professional for that.
The IRS has rules than prevent people from going to trash can after trash can. Don't believe what other dooflops tell you about tax laws.
It's simple...
APA is trying to claim an expense of that amount in giving you that prize so they are screwing you to cover themselves in the case of an audit...
Jaden
APA is trying to claim an expense of that amount in giving you that prize so they are screwing you to cover themselves in the case of an audit...
Jaden
True. The term prize winnings would better cover this. You have to deduct expenses none the less under miscellaneous/Schedule A, and if you don't itemize you are screwed.
Can't file under a Schedule C because there you have to have a business purpose etc., with the objective of MAKING A PROFIT - not a hobby. Another tax trap for goofballs trying to cheat the IRS.
This 'commemorative edition' cue does NOT hold water. You could have a cue with a Johnny Archer engrainment, as is common with many cues. This does NOT raise the value of a cue.
300+%. Get real. The APA is trying to cheat the IRS by artificially increasing the value of assets given away. Let's see - they would have had to pay $350 per cue (highly unlikely) or have had to record a realized gain upon disposition of an asset (again highly unlikely). Most likely, the APA has some kind of investment in the company that produces these cues and is trying to laundry money LOL.
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Dooflops... LOL
Ok, then. How does the IRS know whether or not I went from 'trash can after trash can' ? I had a relative hit a slot machine for around $6,000 a few years back. The taxman told them to find as many lottery tickets and scratch-offs as they could.
If they needed to 'find' tickets, they would have gone to a couple of the local restaurants and would have been able to come up with 'losing' tickets with no problem. My relative was habitual in keeping such things, hoping for such an event, so it wasn't an issue.
But even if my relative did hop from trash can to trash can, how can the IRS prove that they may have done such a thing ?
Please... Enlighten me...
Your second and third point somewhat contradict each other. IMO the chances are pretty slim the APA paid 350$ for a 100$ cue.
Since the APA is now sending out 1099s should they not also be sending out itemized receipts for all the funds charged to the players?
Did the APA tell said players they would be receiving a 1099 for any money/prizes earned over 600$ before the items were handed out? I would have refused the cue and the jacket. Did the players have that option?
I also disagree with your fourth point as well. If the APA sends out 100 of these forms that is a 100,000$ less they have to claim on there earnings which directly affects there taxes. Is that not the whole point of a 1099?Not being a tax lawyer this is all my opinion of course.
Banks
Banned
It is a commemorative cue that has some engraving and such on it, so having a limited set of those could easily cost them more than the $100 that Outlaw charges for a standard cue. My girlfriend has one and it isn't half bad, but then again you should see what I've been using lately. And the whole point of a 1099 is so that the rightful recipient of compensation is held responsible for their own taxes on such funds. That's like expecting your employer to pay all of your income taxes for you. If either the payee or the payer do not claim that income, it can get messy. Not only would the APA be held liable for the taxes, but they'd also be held liable for failure to comply with the law by not sending out those 1099s. My job is A/P, so other than reading about pool and people complaining about the APA, I must make sure that the proper IRS forms are completed prior to payment and that proper documentation accompanies any check copy before payment is released. Fun stuff, let me tell you. :boring:
And no, they don't have to send out itemized receipts, just as your employer doesn't have to send out your timesheets. The breakdown for the distribution of the monies is made known in the flyer or whatever it is for nationals.
Both you and APA operator could very well be right. The whole thing just seems pretty shady to me... You could write a book explaining it and I would still believe that the APA is somehow making out on this.
Don't agree with this. The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year.
The APA has always sent out 1099's just like the WPBA, BCAPL, TAP and any other organization out there that operates like a business. This is not an under the table operation like many people try to do in the pool industry which is a big reason why the industry has the reputation we do.
I don't understand why everyone is making such a big deal about this, you sign the paper when you receive your award and unless you are cashing out at the very top with like $10K then you are most likely able to write off all of the winnings and won't have to pay any taxes on it. Everything you do associated with pool can be written off against your winnings. Everything including pool time, league fees, travel, food on your trip, entry fees, equipment you bought, even lessons you have paid for, etc.
And if the APA is valuing something at a certain price it is usually because that was what the donating company valued it at for their own tax purposes.
I don't understand why everyone is making such a big deal about this, you sign the paper when you receive your award and unless you are cashing out at the very top with like $10K then you are most likely able to write off all of the winnings and won't have to pay any taxes on it. Everything you do associated with pool can be written off against your winnings. Everything including pool time, league fees, travel, food on your trip, entry fees, equipment you bought, even lessons you have paid for, etc.
And if the APA is valuing something at a certain price it is usually because that was what the donating company valued it at for their own tax purposes.
Of course - 'but who is going to be making a profit here?' was my assumption. My statement still stands - you would have to be nuts to file on the Schedule C!
So, are you going to suggest to all the AZBilliards folks to go ahead and file under Schedule C?!