W9

[Austin]

I saw this on the Lewisville flyer on dynamicdiscs.com. Is this something that is going to happen from now on? Just for Texas tournaments? Just for DD? Can't the government keep their fat fingers out of anything?

*Professional players who cash in their division will be paid out by check and required to fill out a W9 Tax Form due to IRS Regulations that are being enforced on Dynamic Discs. These forms will be provided for you at each tournament.

[smitty]

It will be the standard at all DD events. With the number of online registrations we take in, we are being forced to show the amount of money we are paying out. Rusco is really as frustrated with it as any one.


On the other side of the coin. Disc golf really is the only "pro" sport that the pros are not made responsible to pay taxes on their income.

[kscustom]

With last years most awesome congress, came about some new rules that suck for me as a small business owner. I could see some of that affecting disc golf.

[discscout]

I am not a tax attorney but if you make money; there are expenses that you can deduct. Mileage to and from the event, the cost of your tools of play- ie discs and lots more. This could in turn reduce your taxes on your earned income.

[smitty]

Maybe Bob, could chime in and give us a little advice. I think there is a number you have to reach $700? before it is even worried about.

What can we claim? Gas, Food, Discs, Motel room?

[Schoen-hopper]

You can't deduct expenses unless you are itemizing, which most of us do not qualify for. Unless you give 15+% of your income to charity or pay rediculous amounts in interest payments.

I also heard that if your pay is less than $700 (per event or total for year?) that it cannot be taxed.

Should definitely ask Bob about this.

[Chucker9]

There are alot more people that itemize than you think. (I do and several of my friends that play DG do) I don't know for sure about payouts, but you can cash in Lottery ticket after Lottery ticket without having to claim it. $700 dollars or more in one payout is what I heard. My ex-wife won $500 dollars three times in one year and didn't have to claim it.

Where is the eaglescout? We need him to chime in. Funny, don't ask him to and he won't stop. Ask him to and ya get nothing....What's up Bob?

[Schoen-hopper]

I'm going by his office to get a disc order. I'll hit him up on this.

[jump_putter]

I'll weigh in on this subject from the experience of a pretty seasoned gambler..When the track was still around, we (me and a few friends) were there very often and did hit some pretty nice sized pools. No w9 was needed for any win smaller than 599x the base amount of the ticket bought (usually $599). Which is usually why we tried to hit exactas and trifectas not superfectas because they usually would not have to be taxed...I dont think that DG winnings would be the same, they would probably fall under a basic taxed income law, much like professional bowling.

[Ruder]

Colorado was requiring anyone to fill out a w9 for anything over $500. I believe anything under $3000 in one year is considered just a hobby and therefore does not need to be claimed.

[Schoen-hopper]

This from Bob:

"The simple answer: Nothing has changed. As always, 100% of all cash earnings are taxable whether one gets a 1099 or not. Those cash earnings can be offset by ordinary and necessary expenses related to the generation of that income. Examples: Entry fees; travel costs; PDGA, etc. dues; equipment; etc. Most of our “pros” will have sufficient expenses to “zero out” their income.

1099 rules did not change from 2010 to 2011; if DD pays $600 or more to any one participant in 2011, they will be required to prepare a 1099 for them or do backup withholding of 20% (much better to get the 1099 – see above). Arguing point is whether each tournament is a separate entity such that DD would not combine them throughout the year. With the penalty exposure, I would recommend that DD combine them."

So in short, all earnings are taxable, though a TD doesn't have to send a 1099 unless earnings exceed $600. But... a player could list expenses on a schedule C to offset the expenses. If a schedule C-EZ is used, the what type the expenses are do not even have to be recorded. I don't think it would be wrong for a discer to evade shelling out a lot of extra cash to Uncle Sam in this way. Thing of how much money just in gas you spend travelling to tournaments each year. For most of us, this alone would cancel out any earnings!

Still don't know what a W-9 has to do with this. Irs.gov shows names the form as "Request for Taxpayer Identification Number and Certification". I didn't read all of it, but it didn't seem to relate to self employment tax or anything of the like.

[chappyfade]

A W-9 is simply a request for information. It's basically just an official request for your taxpayer ID, address, etc..., so if DD has to send you a 1099 after the end of the year they have your address to send it to. I don't believe W-9's are typically seen by the IRS, just as W-4's aren't. Usually companies just hold those in a file for internal use in preparing forms (w-2, W-3, 1099, 1096) and withholding, although I suppose the IRS could request those...that's probably a question better suited for Bob. Bob's the CPA, I'm simply an accounting major at this point, and not very far along at that.

Michael is correct. You can deduct expenses on a Schedule C, or Schedule C-EZ. I file a 1040 every year with a Schedule C because of my officiating income. With the gas allowance for 2010 at $0.50 per mile, you can probably deduct almost enough expenses to cover your winnings just from the mileage, not to mention other expenses.