fight pay/taxes

[caged]

I am looking for some input from other fighters who have been pro for a few years.  Are we expected to claim our money earned off of pro fights.  I have heard different stories about this topic…one being that if a single check does not exceed $500, then you don’t have to claim it.  Also, if you do claim it, then can you also claim all your training expenses for the year?

[Barry]

I'm no CPA, but I think the $500 thing isn't per check, it's per year.  At least that's the case for a business. If I pay somebody to help me with my business and pay them more than $500 I have to send them a 1099.

[CelticTiger]

Barry is correct. You have to claim all income. However think about it when you file and write off everything with your training, equipment, dues, transportation, meals, hotel. blah blah ....guys help me out here.... You are better off going to a CPA, for the $400-$500 he will charge you, more often than not he will make that up in savings. The form is a schedule C.

disclaimer, I am not a CPA and cannot even count up to my age in one sitting...but I have stayed at a Holiday Inn Express

[Barry]

...but I have stayed at a Holiday Inn Express

 

[ghostman]

I'm no CPA, but I think the $500 thing isn't per check, it's per year.  At least that's the case for a business. If I pay somebody to help me with my business and pay them more than $500 I have to send them a 1099.

I just sent out 1099s for our company, and you are required to send them out if the amount is $600 or more for 2010.  $500 is old school. lol

Our geniuses in congress slipped this in during the health care bill.

Starting in 2012, that changes. All business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing. That means obtaining the taxpayer ID number of the individual or corporation you're making the payment to -- even if it's a giant retailer like Staples,Best Buy, or Walmart -- at the time of the transaction, or else facing IRS penalties.  This will also pertain to governmental agencies.  

disclaimer, I am not a CPA and it takes me at least two sittings to count my age.

[Jaime_4oz]

The above stated is correct. Companies are required to provide 1099misc statements for any amounts paid out in excess of $600 dollars. This amount is not per check but in total paid by that company to the individual in a fiscal year. If for instance you get paid $400 dollars to fight and thats all that you receive from that promotion in a calendar year, then you are not required to claim this because the company is not required to file the amount to the IRS. I have the joy of doing the taxes for the company I work for I go through this on a yearly basis .

Jaime

[caged]

good info...thanks. so at what point can you "write off" all the expenses? Can you write off the entire year of expenses related to fighting even if it exceeds what was made off of a few fights towards the end of the year?

And I believe I will go with the advice of the man that stayed at a holiday inn express.

[PenguinOfBane]

I am a CPA & all I feel comfortable telling you guys is the following: 

1)  Go see a CPA who specializes in tax for complex returns.  Think of CPA's like doctors who specialize in different fields....you wouldn't go to an optometrist instead of an orthopedic for a knee injury just b/c they're both doctors. 

2)  Just b/c you don't get a W-2 or 1099, you're still supposed to claim earnings/income


Good luck

[Barry]

There you go!