Tournament fishermen, Tax help needed

[HTO Rex]

I need some advise. I won some money in tournaments this year and have to claim it on the ol tax form. It isn't a lot of winnings, but enough that Uncle Sam would run me in for not claiming it. WEhat I needs to know is, how do you tournament guys do your taxes? What can be deducted to make the winnings a loss instead of an asset? Help?

[steve(IL)]

I'm not a tournament fisherman, but recall reading something a while back that explained that "hobbies" that pay money/generate incomes can be useful at tax time. You require the services of a good tax accountant. I have a hunch that his her/help will more than pay for itself in terms of additional deductions - truck & boat depreciation, gas, lodging, storage(?).... who knows?
Good luck with it.

[Robert Rachowicz]

I'm listed under Walleye Central's Sponsor's page (click Sponsors). Choose Boats & Motors and look for Fishing Systems Ltd where I'm got two filled-out examples of profitable & unprofitable Tournament Fishing businesses ($14.50). I've collected many tax returns from tournament guys (including myself)and have tried to get it down to understandable language. I'm a tax preparer as well and I've listed the many deductions & income sources that we're collectively aware of. For example, if you're intent was to earn a profit, you are the same as GM or Ford. There are even some deductions that are available whether you are in business or not - a good one most of us can utilize is the Federal Fuels Tax Credit. For each gallon of gas we burn off highway (boat, lawnmower,ATV,...), we are entitled to a credit (Form 4136 is the tax form to use). Mileage, depreciation & entry fees are some examples of large deductions.

[Zach]

http://www.walleyecentral.com/wcsponsors4.htm

[Sheila]

You need to do a Form 1040 (Schedule C) Profit or Loss from Business

Get it and the instructions at http://www.irs.gov/forms_pubs/forms.html

Obvious expenses:
tourney entry fees
travel (hotels)
mileage (32.5 cents per mile in 2000)
meals (only 50% deductible)

trickier expenses:
boat
gas
insurance
equipment
*stuff you would need to be prepared to prove 100% is for business purpose of fishing tournaments to make profit (nah, you never use that stuff recreationally right?)

Never give the IRS more money than rightfully owed.
Learn about your rights as a taxpayer and business operator.
Seek advice from qualified tax people.
If you received $600 or more, definitely expect at 1099-Misc from source.
There is nothing wrong with a loss. Well, just think of it as "investment" not failure!
Read all the information the IRS provides. The answers are in there if you can't afford tax counsel.
Good luck and God bless...