How to handle contest winnings

moocow · 05-03-2010, 10:12 AM

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' · 05-03-2010, 10:49 AM

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 · 05-03-2010, 10:57 AM

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 · 05-03-2010, 11:02 AM

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 · 05-03-2010, 11:05 AM

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 · 05-03-2010, 11:47 AM

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 · 05-03-2010, 12:01 PM

Quote:

Originally Posted by 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 :)

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

musicmanryann · 05-03-2010, 12:09 PM

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

KC_Bobby · 05-03-2010, 12:16 PM

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

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 · 05-03-2010, 12:17 PM

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

moocow · 05-03-2010, 12:35 PM

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 · 05-03-2010, 12:43 PM

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

Lake Dogs · 05-03-2010, 12:46 PM

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 · 05-03-2010, 12:59 PM

Quote:

Originally Posted by ique

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

I would never say that, certainly not on a public internet forum

Quote:

Originally Posted by 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!

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

ique · 05-03-2010, 02:29 PM

Quote:

Originally Posted by musicmanryann

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

05-03-2010, 10:12 AM	#1
moocow is One Chatty Farker Join Date: 07-31-08 Location: Belton, mo	How to handle contest winnings 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 __________________ -Shane Petzold- -MooCow BBQ team- -Facilities and equipment manager at Operation BBQ Relief- -[URL="http://www.moocowbbq.com"]www.moocowbbq.com[/URL]- -Home of the Make it Take it Drum Class- -kCBS/ CBJ- - Stoker powered stainless steel cabinet smoker-Mini & 3 Regular UDS-[B][COLOR=Blue]BLUE [/COLOR][/B]Weber OTG-Saffire ceramic grill-26" plow disc-Green mountain pellet -16' Stealth Competition trailer-

05-03-2010, 10:49 AM	#2
early mornin' smokin' is One Chatty Farker Join Date: 10-06-08 Location: wading river, ny	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! __________________ L trailer spicewine, webers, 2-26.75's, performer, heineken 22 1/2, 7 level pro-q 20 excel

05-03-2010, 10:57 AM	#3
Scottie Quintessential Chatty Farker Join Date: 11-03-06 Location: Chi-Town	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... __________________ cancersuckschicago.com FROM SEA TO SHINING SEA BBQ TOUR Red Jambo one off FE 100 FEC 100 WSM Homer Simpson 22 " Weber Kettle Red 18 1/2" Weber Kettle Black 26 3/4" Weber Kettle

05-03-2010, 11:02 AM	#4
Lake Dogs Quintessential Chatty Farker Join Date: 07-14-09 Location: Lake Sinclair, GA Name/Nickname : Hance	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. __________________ Hance - MiM/MBN/GBA CBJ and comp cook Lake Sinclair, GA (strategically about an hour from darn near anywhere) My competition daze are probably behind me now; I pretty much cook for family, friends, and frankly the peace and solitude I get from smokin' on an offset... Was Lang 84DX, now Bubba Grills 250R and many Weber grills

05-03-2010, 11:05 AM	#5
paydabill is one Smokin' Farker Join Date: 05-21-07 Location: Moberly, Mo	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. __________________ Paydabill Lit & Loaded BBQ I remember a day when I hated pellets - 2 pellet cookers latter! CBJ - love judging KCBS - member for 4 years MOFO Chapter Super fast - BLUE Thermopen

05-03-2010, 11:47 AM	#6
Smokin' Joe is one Smokin' Farker Join Date: 02-03-08 Location: IOWA	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 :) __________________ TippyCanoe BBQ Crew www.tippycanoebbq.com Memphis Pro Backwoods Fatboy Backwoods Party

05-03-2010, 12:09 PM	#8
musicmanryann is One Chatty Farker Join Date: 06-11-08 Location: Ames, Iowa	No, he Brian and Matt just spent the cash on booze and strippers on the way home, so there was no record of it! __________________ Big T'z Q Cru Championship BBQ Team CBJ #50801 6 WSM's 2 Weber Kettles FEC100 2 Backwoods Fatboy 2 Not-so-Ugly Drum Smokers from Gateway BBQ Store [URL="http://s674.photobucket.com/albums/vv102/Ryannewstrom/Jambo%20--%20The%20Orange%20Monster/"]Jambo -- The Orange Monster[/URL] [URL="http://www.bigtzbbq.com/#!__main/links"]www.bigtzbbq.com[/URL] Join our [URL="http://www.facebook.com/home.php?ref=logo#/group.php?gid=101606657515&ref=ts"]facebook group[/URL]

05-03-2010, 12:16 PM	#9
KC_Bobby Babbling Farker Join Date: 05-03-07 Location: Olathe KS	Set up a checking account for your team using your dad's info - let him deal with it. 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. __________________ Boondoggle BBQ Country Smokers 450 Weber Smokey Mountain 18" Proud KCBS Member & Certified Judge

05-03-2010, 12:17 PM	#10
Gowan is Blowin Smoke! Join Date: 08-08-07 Location: Cartersville, GA	Another tip - if you have a choice, have prize checks cut in the name of the team member who pays the least taxes.

05-03-2010, 12:35 PM	#11
moocow is One Chatty Farker Join Date: 07-31-08 Location: Belton, mo	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. __________________ -Shane Petzold- -MooCow BBQ team- -Facilities and equipment manager at Operation BBQ Relief- -[URL="http://www.moocowbbq.com"]www.moocowbbq.com[/URL]- -Home of the Make it Take it Drum Class- -kCBS/ CBJ- - Stoker powered stainless steel cabinet smoker-Mini & 3 Regular UDS-[B][COLOR=Blue]BLUE [/COLOR][/B]Weber OTG-Saffire ceramic grill-26" plow disc-Green mountain pellet -16' Stealth Competition trailer-

05-03-2010, 12:43 PM	#12
Scottie Quintessential Chatty Farker Join Date: 11-03-06 Location: Chi-Town	you just need a dba to open a business checking account. __________________ cancersuckschicago.com FROM SEA TO SHINING SEA BBQ TOUR Red Jambo one off FE 100 FEC 100 WSM Homer Simpson 22 " Weber Kettle Red 18 1/2" Weber Kettle Black 26 3/4" Weber Kettle

05-03-2010, 12:46 PM	#13
Lake Dogs Quintessential Chatty Farker Join Date: 07-14-09 Location: Lake Sinclair, GA Name/Nickname : Hance	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. __________________ Hance - MiM/MBN/GBA CBJ and comp cook Lake Sinclair, GA (strategically about an hour from darn near anywhere) My competition daze are probably behind me now; I pretty much cook for family, friends, and frankly the peace and solitude I get from smokin' on an offset... Was Lang 84DX, now Bubba Grills 250R and many Weber grills

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