How to handle contest winnings

[moocow]

With our recent win we are left with how to handle our money. I am looking for advise on what to do as far as taxes, Tax ID #, etc. Do most of you guys have an LLC? Will all contests give you a 1099? How much does it cost to set up an LLC? Do you have to have a business lic.? How long before you have to make a profit? Any info would be helpful. Thanks

 

[early mornin' smokin']

well, if we ever won enough to cover what we spent, we've decided to cover the costs of entry, meat, and incidentals, and if there was money left over, reinvest in the team, ie, new cooker....im not a big fan of giving up more money than i already do to the government!

 

[Scottie]

If you set up a LLC, be prepared for the IRS to look closer at you. Your best bet, unless you are planning on opening a catering business, is to just get a dba for your team name. If you get a 1099, have it under your SSN #.

But to have a LLC for a BBQ team, I would not recommend it...

 

[Lake Dogs]

Only your profits are taxable. Factor in, for the entire year, all costs associated with
practices and competitions, including gasoline, spices/sauces/rubs/injections, meats,
team garb, etc. Very few actually make a profit at this. Otherwise, you're probably
fine just using your personal taxes, schedule C. For 99.9% of us, no matter how
you slice it and dice it, to the IRS it's a hobby. If it's a hobby, you cannot use the
costs as a deduction against other income (damn it). If there's a profit, schedule C.

And, what Scottie said.

 

[paydabill]

Agree with Scottie. LLC means - Audit in most cases.

I would keep it in your name and SS# - remember 1099 money is taxed at the full amount to what your bracket is. So, what I did was reserved the % from the winnings and did not touch it. Then when taxes roll around, I refunded that money to my family.

 

[Smokin' Joe]

Not all contests give out 1099's...We won a substantial sum at an event in 2009, no tax information was ever collected and no 1099 ever showed up. But it just would have been a little more paperwork if it did as I had several thousands of dollars of expenses to go against it

 

[ique]

Not all contests give out 1099's...We won a substantial sum at an event in 2009, no tax information was ever collected and no 1099 ever showed up. But it just would have been a little more paperwork if it did as I had several thousands of dollars of expenses to go against it

Uh Joe, are you saying you didnt claim these earnings to the IRS? :tape:

 

[musicmanryann]

No, he Brian and Matt just spent the cash on booze and strippers on the way home, so there was no record of it!:dancer::rofl:

 

[KC_Bobby]

Set up a checking account for your team using your dad's info - let him deal with it. :becky:

Might not be in your best interest to set up a biz after Belton winnings, but it could be when the year is over - let the entire year determine your best route. But keep your receipts - fortunately we did.

 

[Gowan]

Another tip - if you have a choice, have prize checks cut in the name of the team member who pays the least taxes.

 

[moocow]

We would like a separate BBQ checking acount but can't use the team name without a tax ID #, Is this correct? We have a pretty big company wanting to provide us with some cash but would like to make the check out to the team name and not an individual so I am not sure what we should do. Would also like to be able to go to places like Restaurant Depot with a permanent card and not go to the desk all of the time like the current deal is set up. It not so much about the prize winnings as it would be some of the other perks that would come with it. We have been asked several times to cater and so far we have stayed away from larger things. Thanks for all of this info, keep it coming.

 

[Scottie]

you just need a dba to open a business checking account.

 

[Lake Dogs]

Sponsorship and catering. No longer a hobby. Do you have a CPA that you know and trust? If so, this might be a good
thing to run by them before you go too far down one avenue or another.

 

[Smokin' Joe]

Uh Joe, are you saying you didnt claim these earnings to the IRS? :tape:

I would never say that, certainly not on a public internet forum:doh::-D:mod:

No, he Brian and Matt just spent the cash on booze and strippers on the way home, so there was no record of it!:dancer::rofl:

Ryan, may be onto something here...cash has no paper trail especially when spent in this fashion

 

[ique]

No, he Brian and Matt just spent the cash on booze and strippers on the way home

I wonder if they give out receipts in the champagne lounge VIP room :idea:

 

[2Fat]

I wonder if they give out receipts in the champagne lounge VIP room :idea:

Only if you ask!

 

[Balls Casten]

I wonder if they give out receipts in the champagne lounge VIP room :idea:

In Minneapolis the “Sheiks Palace Royal” will give you a receipt from “SPR”. To which I have told our accounts that watch my expenses … that’s from the Saint Paul Radisson.

 

[JD McGee]

We split our winnings 50/50...our local BBQ association sends out a 1099 to each of us for equal amounts. I do not claim my winnings for my catering business...it it strictly personal.

 

[Rub]

I set up an LLC a few years ago.
So far, so good.

 

[BBQ_Mayor]

If it gets to be too much trouble, you could just sponsor our BBQ team and I'll take care of the tax burden.:becky: