Pro Players paying into Social Security and Taxes on monies won
- Thread starter justabrake
- Start date
You're no fun...
I report every 20 dollar set I win to my accountant for my taxes.
Flazell
My son gambling at V.F.
You ask a simple question and unfortunately, some people take the podium to try and paint a different picture and insinuate that you're being "nosy". That's the problem with social media nowadays.....some people just want to be negative and instigators.
There was absolutely nothing wrong with what you asked. :smile:
DrawBack74
Banned
They should be issued a 1099 for anything over $600 in a calendar or fiscal year. But, they can also deduct losses or expenses. Tournament fees, lodging, food and travel expenses. If it’s a 1099 then they file it (if they do) with there personal tax return. If they have a Corp or LLC then the have to have a tax ID number and present a W9 to get paid as a Corp or LLC. Then the taxes get filed under the Corp or LLC and they need to put together a K1. A K1 represents the profits and losses of the Corp or LLC. Under that umbrella you make deductions etc and you are taxed only on the profits of such.
Now wether they file is an entirely different story.
Even if you gamble, say in Vegas or other they issue a 1099 for winning over $1000. You can deduct the losses also. That’s where the players card helps you keep track. Along with ATM withdrawals etc.
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Now wether they file is an entirely different story.
Even if you gamble, say in Vegas or other they issue a 1099 for winning over $1000. You can deduct the losses also. That’s where the players card helps you keep track. Along with ATM withdrawals etc.
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Those fees, plus a lot of other expenses of a pro pool player, are deductible business expenses. So that portion of their gross income ISN'T taxed. Do you really not know how our tax system works?
Yeah. The plan is a gofundme page.
I wonder if anyone fills out form 8300 to report cash payments of $10,000 or more?
Probably no pool players.
A match between two players for cash without a spot could be considered a two person single elimination tournament, so gambling rules would not apply. A spot would tip it towards gambling IMO.
Probably no pool players.
A match between two players for cash without a spot could be considered a two person single elimination tournament, so gambling rules would not apply. A spot would tip it towards gambling IMO.
Here in the U.S., tournament organizers are required by law to withhold a set percentage from each player's prize money payout and forward it to the IRS.. The player then has to file an income tax return for that year to get the money back if they qualify for a tax refund.
This is usually done in the big events. The U.S. Open 9 Ball championship (under Pat Fleming) did this. Also, the BCA did this as well when they held their pro events in Las Vegas.
Players can show proper documentation to the organizer to be exempt from having taxes withheld. For example, some top players have incorporated themselves.
This is usually done in the big events. The U.S. Open 9 Ball championship (under Pat Fleming) did this. Also, the BCA did this as well when they held their pro events in Las Vegas.
Players can show proper documentation to the organizer to be exempt from having taxes withheld. For example, some top players have incorporated themselves.
Not exactly. The organizer is usually not required to withhold taxes on players who have a tax ID such as an SSN. The organizer is required to withhold money from foreign players (and I suppose anyone who cannot present a valid tax ID number -- TIN).
The exact percentage that is withheld depends on which country the player comes from and the specific tax treaty that the US has with that country. For some countries there is no withholding on up to several thousand dollars of income. In general the organizer is not required to wade through the tax treaties -- every country seems to be different -- and can simply withhold 30% from every non-resident alien (NRA). There is no minimum reporting amount for an NRA like the $600 minimum for a US citizen.
Such withheld funds must be deposited immediately at a certain class of bank. In addition the organizer must file forms with the IRS.
In the case of a US citizen, the organizer may be required to withhold money if he has previously been notified by the IRS that a particular individual has a tax problem. As an organizer, I have received such a notice. IIRC, the notice could potentially require withholding the entire prize.
The organizer is liable for taxes and penalties that turn out to be due if he fails to file the proper paperwork and of course withhold as required.
That is very useable information, but tell me: what does one get from the money withheld?
oke::rotflmao1::speechless:
oke::rotflmao1::speechless:
A little piece of paper saying that you were a very nice person to give the IRS it's 30% share. And if you give them a lot more paper in return, you may get some of the money back. Oh, and you get a warm, fuzzy feeling.That is very useable information, but tell me: what does one get from the money withheld?
Yes, sorry, the main issue was for non U.S. players. I don't know if you already do this, but it helps them if you can supply them with W 9 forms at the tournament so they can start the process to get a U.S. tax ID number so they can file a return to get their money back.
But as for U. S. players, as I'm sure you've also researched, it depends on whether or not the organizer is giving the U.S. players a W 2 or a 1099 at the end of the year to report their income. If it's a W 2 then the player is treated as an employee and must fill out a W 4 form if he wishes to be exempt from withholding tax. Without that form, the organizer can be held liable if the player owes tax and defaults on paying it for that tax year, even if the IRS hadn't previously informed the organizer.
I'm not sure how the players were designated at the US Open and the BCA events but I'm pretty sure I remember seeing W 4s on somebody's table at one of those events.
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You may want to do a 5-year depreciation schedule. The IRS says in a FAQ:Hmmm.. maybe I can deduct that Tascarella as a 'business' expense.. that'll nicely offset my winnings
[1] Can I deduct the cost of the equipment that I buy to use in my business?
Equipment is considered a capital asset. You can deduct the cost of a capital asset, but not all at once. The general rule is that you depreciate the asset by deducting a portion of the cost on your tax return over several years.
Equipment is considered a capital asset. You can deduct the cost of a capital asset, but not all at once. The general rule is that you depreciate the asset by deducting a portion of the cost on your tax return over several years.
If in fact you are going to claim pool expenses as a business deduction, you better show that your pool business turns a profit for something like three of five years or the IRS will conclude that it is just an expensive hobby. Doing a five-year schedule on a cue allows you to sop up profits over that period. If you sell the cue, the amount received over the depreciated value has to be declared as a profit. (Or at least that's the way I read the tax code. I am not a CPA, although I used to lose regularly to one.)
I was half-kidding, Bob!... but yes, I do depreciation and expenses for my real business...
I'm sure someone on Shane's level probably writes off travel, meals, equipment etc.
DrawBack74
Banned
Not all of this is factual. Pool players generally wouldn’t put a list of assets on a depreciation schedule. Especially if it is a single owner or pass through without partners. In my LLC we do not put anything on the depreciation schedule that is under $1000.
The purpose of the depreciation is to advertise the asset over a 5 year period. You receive a 20% deduction for a period of 5 years. At the end of the 5 years the government or even a bank of a loan was given for the assets determines the item to be fully depreciated and its value to be nil. Now we all know this is not necessarily the case. Especially with a collector pool cue. Never the less they had to set a time limit. This rule is primarily geared towards the technology sector (which is where the majority of company investments are made). Example....you buy a computer today and in 5 years it’s basically worth nothing. So you can no longer leverage that asset for say a loan. They want you to continue to buy. It stimulates growth and tax base.
The government occasionally offers incentives that go as far as to allow a company to deduct 50% of an asset purchase in a calendar year. Unfortunately they don’t advertise these changes very loudly and hopefully your accountant is on top of that. If you have the cash flow and can time it right it can be very valuable. You make $40k in purchases in December and get 50% tax credit if you file early in January..
In regards to a company losing money....you can continue to lose money on the books indefinitely. You may get audited (never fun) but, as long as you show legitimate activity such as tournament entries etc. and it’s documented then you should be fine. How can you possibly know what your income will be as a player. You can only hope you take first at every tournament but that is obviously not reality.
There are several things as a sports figure or athlete that can be taken advantage of.
At some point you certainly hope you are making money otherwise you are not surviving. In which case pay up buddy.
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This whole thread can be summed up nicely if everyone remembers 1 simple rule when it comes to taxable income.
Pigs get fat-Hogs get slaughtered.
Pigs get fat-Hogs get slaughtered.