Tournaments and taxes...

jhanso18

jhanso18

Broken Lock
Silver Member
I saw in the other thread about taxes for pool players. I have some questions if any CPA's or otherwise would like to chime in.

I am by NO MEANS a pro. But, can I write off my travel and hotel expenses on my taxes? I've been known to cash in a tournament here and there from time to time, but I more often go 3-5 rounds and out. (I suck, what can i say...)

I know when I use to race, that I could write off damn near everything. (Gas to get there, gas to race, gear to race, tires, etc.) Is this a similar situation since I AM competing for money? I'm not looking to write off my cue or anything crazy, but Hotel, travel expense, tips and repair while on location, etc?

The reason i ask, is I would play alot more if I could write off my expenses.

Thanks,

Justin
 
If pool was your main source of income and you were profitable at it, then yes. But assuming your expenses are always going to be more than the income generated from pool it is subject to the hobby rules.

In which case you could write them off to the extent it reduces your pool income to zero. (Similar to gambling).

And yes, I know there are a ton of people who have a "business" (cough, hobby, cough) which has a big loss every year and they use that loss to offset other income. That doesn't mean it's legal. They catch up to them eventually.

(Not intended to be tax advice.)
 
jhanso18 said:
I saw in the other thread about taxes for pool players. I have some questions if any CPA's or otherwise would like to chime in.

I am by NO MEANS a pro. But, can I write off my travel and hotel expenses on my taxes? I've been known to cash in a tournament here and there from time to time, but I more often go 3-5 rounds and out. (I suck, what can i say...)

I know when I use to race, that I could write off damn near everything. (Gas to get there, gas to race, gear to race, tires, etc.) Is this a similar situation since I AM competing for money? I'm not looking to write off my cue or anything crazy, but Hotel, travel expense, tips and repair while on location, etc?

The reason i ask, is I would play alot more if I could write off my expenses.

Thanks,

Justin
Click to expand...

I know with horse racing, let's say you cashed a ticket for $1,000. You have to file taxes on that $1,000 winnings, but if you can show you lost $1,000 by saving old tickets, then it's a wash. This is why you see a lot of folks picking up dead tickets on the floor at the horse races. :D
 
I have several friends that race sprint cars, motorcyles, drag cars, etc. They all have heavy right offs. They all use "(insert name) Racing" and file taxes as a business. Why couldn't us do this with pool tournments? Such as SVB Billiards, or some such?
 
jhanso18 said:
I have several friends that race sprint cars, motorcyles, drag cars, etc. They all have heavy right offs. They all use "(insert name) Racing" and file taxes as a business. Why couldn't us do this with pool tournments? Such as SVB Billiards, or some such?
Click to expand...

You probably could. The thing about being self-employed, whether in racing or pool, the more deductions you have, the more it raises a red flag with the IRS. So if one were to get audited, they need to have good records.
 
Talk to an accountant. Seriously. Yes, the moment you are paying taxes on any income, you're entitled to deduct expenses but your best course of action is to discuss this with someone who truly knows what they're talking about. There are changes to these laws that can benefit/hurt you. There are nuances to be aware of that the average person on this forum might not know. You want a tax expert, not pool advice.
 
Jude Rosenstock said:
Talk to an accountant. Seriously. Yes, the moment you are paying taxes on any income, you're entitled to deduct expenses but your best course of action is to discuss this with someone who truly knows what they're talking about. There are changes to these laws that can benefit/hurt you. There are nuances to be aware of that the average person on this forum might not know. You want a tax expert, not pool advice.
Click to expand...

Good advice for sure! :)
 
jhanso18 said:
I have several friends that race sprint cars, motorcyles, drag cars, etc. They all have heavy right offs. They all use "(insert name) Racing" and file taxes as a business. Why couldn't us do this with pool tournments? Such as SVB Billiards, or some such?
Click to expand...

I think you would need to get a business license in your state to run your "so called" business. The IRS would also need your Employee Identification Number when filing taxes.
 
Jude Rosenstock said:
Talk to an accountant. Seriously. Yes, the moment you are paying taxes on any income, you're entitled to deduct expenses but your best course of action is to discuss this with someone who truly knows what they're talking about. There are changes to these laws that can benefit/hurt you. There are nuances to be aware of that the average person on this forum might not know. You want a tax expert, not pool advice.
Click to expand...

Kind of what I was thinking, but Figured i'd ask here first.
 
I own a CPA firm here in Seattle, however, for insurance purposes it is best not to answer specific questions into peoples tax liabilities from such minimal information.

Also, i'm a (very) amateur pool player who occasionally gets into the money (two years in a row with APA team nationals and a few local tournaments with APA, NAPA and BCA).

I'll just say this: All of my business deductions for pool trips are related to my auto-detailing business where I generally pick up one client or offer consultations while at tournament events. That is very easy to relate to the income from that business. And I report a gambling income from the pool tournaments (which is more than offset by the detailing business expenses). THAT is on the level and has held up against IRS audit.

Claiming all of your expenses year round to offset a few grand here and there would be a stretch, IMHO, should you find yourself talking to Aunt Iris. (IRS)
 
jhanso18 said:
I saw in the other thread about taxes for pool players. I have some questions if any CPA's or otherwise would like to chime in.

I am by NO MEANS a pro. But, can I write off my travel and hotel expenses on my taxes? I've been known to cash in a tournament here and there from time to time, but I more often go 3-5 rounds and out. (I suck, what can i say...)

I know when I use to race, that I could write off damn near everything. (Gas to get there, gas to race, gear to race, tires, etc.) Is this a similar situation since I AM competing for money? I'm not looking to write off my cue or anything crazy, but Hotel, travel expense, tips and repair while on location, etc?

The reason i ask, is I would play alot more if I could write off my expenses.

Thanks,

Justin
Click to expand...
I did it for years. Although I owned a pool room and being a professional player just figured into my overall business. I found the biggest problem was the promoters. Because they were themselves are probably not reporting honestly if at all, they didn't want to give me receipts for entry fees. Many would not even take a check that I would then cash for them.

To be honest, these promoters probably need a license to do what they do in every city the put on tournament. I ran into this once and found what I was doing was not legal. I needed a temporary license to put on a sports promotion like is taken out by a traveling carnival. I would say, by and large, most of the tournaments players attend on weekends all over the country are not even legal. No one pays taxes, no one has licenses, there is no accounting what so ever at all.
 
jhanso18 said:
I saw in the other thread about taxes for pool players. I have some questions if any CPA's or otherwise would like to chime in.

I am by NO MEANS a pro. But, can I write off my travel and hotel expenses on my taxes? I've been known to cash in a tournament here and there from time to time, but I more often go 3-5 rounds and out. (I suck, what can i say...)

I know when I use to race, that I could write off damn near everything. (Gas to get there, gas to race, gear to race, tires, etc.) Is this a similar situation since I AM competing for money? I'm not looking to write off my cue or anything crazy, but Hotel, travel expense, tips and repair while on location, etc?

The reason i ask, is I would play alot more if I could write off my expenses.

Thanks,

Justin
Click to expand...

I won a tournament that was sponsored by a liquor company. Every time I won 1 of those events I had to sign a tax form.
 
Produce Something

jhanso18 said:
I saw in the other thread about taxes for pool players. I have some questions if any CPA's or otherwise would like to chime in.

I am by NO MEANS a pro. But, can I write off my travel and hotel expenses on my taxes? I've been known to cash in a tournament here and there from time to time, but I more often go 3-5 rounds and out. (I suck, what can i say...)

I know when I use to race, that I could write off damn near everything. (Gas to get there, gas to race, gear to race, tires, etc.) Is this a similar situation since I AM competing for money? I'm not looking to write off my cue or anything crazy, but Hotel, travel expense, tips and repair while on location, etc?

The reason i ask, is I would play alot more if I could write off my expenses.

Thanks,

Justin
Click to expand...

Justin,
Write a book, produce something that would benefit a pool player and your travel could be to talk to clients about it, your tournament fees might be considered a part of what you do for promotional expenses. Create a new idea to help people to want to play pool. Just my suggestion. Mileage to and from, hotel....but focus on getting some income if possible from the product, winnings are likely sparce.
 
Not really

JAM said:
I know with horse racing, let's say you cashed a ticket for $1,000. You have to file taxes on that $1,000 winnings, but if you can show you lost $1,000 by saving old tickets, then it's a wash. This is why you see a lot of folks picking up dead tickets on the floor at the horse races. :D
Click to expand...

Been doing this (horses and casino jackpots) a long time without a formal audit. It's doesn't wash dollar for dollar. If you use software to do your taxes you can see the very little impact it has writing loses against wins. Furthermore, you need more than tickets. Legally, you need a journal showing each loss bet with date, time and amount as well as tickets. Did you have any winners while you were losing that 1K? That needs to been documented as well and then declared.

One year I won multiple trips to Vegas (APA). My LO sent me a 1099 because the amount was over $600. I tried to write that off as not true value coming out of a prize fund I paid into all year. The IRS got me the following year. While not an audit, I had to pay additional tax (approx $250) on the amount further reducing the net received which was a joke to begin with considering I got $925 for THREE trips. Sorry got a little sidetracked, but that one has stuck in my craw for a long time.

One last thought. This kind of 1099s are issued for cash or the cash equivalent of prizes won. For example, if you win $300 in cash, a cue and a jacket, etc. valued at $400, you can expect to receive a 1099.
 
:thumbup:In the past I think the threshold was six hundred dollars. While helping and watching the larger payouts for the BCA Nationals, I think 1099s' had to be filled out before we handed over checks larger than $599. Tax laws are in constant change, but this number is most likely the threshold. If you are a pro, and your unable to show a profit after five years, you are no longer able to apply deductions. That's the way it was during a two year stint, and my brother was/is a Sr. Partner at a Accounting firm.
If you ever are given a ck for six hundred, tell em to write it for Five hundred Ninety nine.
 
Just remember that there is not limitation to the period of time in which the IRS may go back to audit you. They simply choose when you went wrong and if confirmed they start going backwards in time until it is sorted out.....

Our record is going back 14 years but some fellow CPA's in town have had to go back over 20 years. Good luck with those receipts from 1999!
 
I believe that after 2 years of loss that pool becomes your hobby, but if you start to make money 2-3 years in a row it can be a business again with the IRS. This was almost 10 years ago so things might be different now. Johnnyt
 
This is not the best place for tax advise. I suggest you contact a professional and have a broad conversation regarding your current income expenses etc.
 
Allen Brown said:
I think you would need to get a business license in your state to run your "so called" business. The IRS would also need your Employee Identification Number when filing taxes.
Click to expand...

this is not true at all. many business run as a sole-prop using the the persons ss#. Not all businesses require incorporation or a license. Moreso, anyone that is paid by 1099 is treated just like a business- IE self employment tax etc...
 
I was told it can be considered "hobby income" and expenses for said hobby can be deducted from income (1099's). My accountant fills out an extra form and all is good.

Search "hobby income" on the IRS website.
 
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