Comp Team as a Business?

BC Squared · 02-22-2012, 08:25 AM

Anyone have their team set up as a business for tax purposes? Could this help recoup costs assuming you weren't winning every week??

Still Smokin · 02-22-2012, 08:32 AM

I was wondering the same thing or something similar.

If we are taxed on prize money, shouldn't we be able to deduct expenses?

Can this be done on a schedule C?

Bourbon Barrel BBQ · 02-22-2012, 08:33 AM

Yep my team is setup as an LLC.

Nordy · 02-22-2012, 08:54 AM

DISCLAIMER - (I deliver babies.. not tax forms)

Seems like there is a tax rule that you can only show a loss in a "business" for a limited number of years before it becomes a "hobby" and you can't deduct a loss on a "hobby"... But i think you can still offset winnings with documented expenses.

Maybe some tax professional can chime in...

jbrink01 · 02-22-2012, 08:58 AM

My comp team operates under my catering llc, so yes, it's financial performance factors into my tax liability.

SHBBQ · 02-22-2012, 09:01 AM

Quote:

Originally Posted by Nordy

DISCLAIMER - (I deliver babies.. not tax forms)

Seems like there is a tax rule that you can only show a loss in a "business" for a limited number of years before it becomes a "hobby" and you can't deduct a loss on a "hobby"... But i think you can still offset winnings with documented expenses.

Maybe some tax professional can chime in...

I'm no tax professional, but I would just change the "business name" every few years if you cannot turn a profit with it. different name, different business. maybe.

ThomEmery · 02-22-2012, 09:02 AM

Cater a few times a year and pay a little tax on the income
win win

Ford · 02-22-2012, 09:11 AM

It's a hobby so you can offset expenses against income. Just can't take a loss. No need to incorporate. Just keep receipts and fill out the IRS form.

BC Squared · 02-22-2012, 09:41 AM

We cater a time or two...so that seems like the way to go. Any other suggestions are appreciated!

MoKanMeathead · 02-22-2012, 09:51 AM

You can claim hobby expenses up to the amount of reported income...however, hobby expenses are subject to the 2% of AGI restriction. Assuming you did have any other 2% deductions you would pay tax on your winnings - up to 2% of your AGI.

...At least that is the way I read the form and instructions.

HawgNationBBQ · 02-22-2012, 10:17 AM

LLC here.

Podge · 02-22-2012, 10:34 AM

Ford is right.. that's what I do.

trueque · 02-22-2012, 04:46 PM

LLC here for 2012.

Sent using Tapatalk

CivilWarBBQ · 02-22-2012, 06:21 PM

LLC in 2011.

It's cleaner for us to keep the team's finances totally separate from the restaurant books.

Avoids the unpleasant surprise of the Head Cook getting 1099s on his personal taxes. Won't save you any money though. If you win more than you spend, you're gonna have to give the gubmint their cut, plain and simple.

Lake Dogs · 02-22-2012, 06:35 PM

Quote:

Originally Posted by Ford

It's a hobby so you can offset expenses against income. Just can't take a loss. No need to incorporate. Just keep receipts and fill out the IRS form.

I am a tax pro. I dont/wont offer tax advice here. However, this IS the correct answer. Unless you're actually a caterer, etc. and this is a business, there is no need to LLC, etc. However, like Civil said above, IF you are a caterer or in the restaurant business, you may want to do it for any number of reasons; he gave a good one.

All expenses, gas, mileage, rubs, fuel, meat, entry fees, etc. etc. etc. can be used to offset any winnings. Very few teams, when you factor in ALL the costs, actually have to report $$$ income.

02-22-2012, 08:25 AM	#1
BC Squared Full Fledged Farker Join Date: 09-16-11 Location: Kansas Downloads: 0 Uploads: 0	Comp Team as a Business? Anyone have their team set up as a business for tax purposes? Could this help recoup costs assuming you weren't winning every week??

02-22-2012, 08:33 AM	#3
Bourbon Barrel BBQ is one Smokin' Farker Join Date: 06-27-10 Location: Louisville, KY Downloads: 0 Uploads: 0	Yep my team is setup as an LLC. __________________ www.bourbonbarrelbbq.com

02-22-2012, 08:58 AM	#5
jbrink01 is Blowin Smoke! Join Date: 08-17-06 Location: Washington, Missouri Downloads: 0 Uploads: 0	My comp team operates under my catering llc, so yes, it's financial performance factors into my tax liability. __________________ KCBS #13207 **2013 Insane Can Posse Tour** Sponsored By: *Gateway BBQ Store* *Blues Hog BBQ Company* *Plowboys BBQ Company*

02-22-2012, 09:02 AM	#7
ThomEmery Babbling Farker Join Date: 08-20-05 Location: Indio Ca. Downloads: 0 Uploads: 0	Cater a few times a year and pay a little tax on the income win win __________________ Catering, Contests, and Community Service http://bbqthom.ning.com/video/our-wells-cargo-trailer Serving Jesus and great BBQ :) Team What Wood Jesus Q?

02-22-2012, 09:11 AM	#8
Ford is Blowin Smoke! Join Date: 04-14-07 Location: Lakeland Florida Downloads: 0 Uploads: 0	It's a hobby so you can offset expenses against income. Just can't take a loss. No need to incorporate. Just keep receipts and fill out the IRS form. __________________ Ford Owner/Head Cook/Chief Bottle Washer for Great Lakes BBQ & Feed Competition BBQ Team FBA Member, KCBS Member & KCBS Certified BBQ Judge Spicewine medium, weber kettle, gas grill

02-22-2012, 08:32 AM	#2
Still Smokin Full Fledged Farker Join Date: 10-20-10 Location: Lowcountry SC Downloads: 0 Uploads: 0	I was wondering the same thing or something similar. If we are taxed on prize money, shouldn't we be able to deduct expenses? Can this be done on a schedule C?

02-22-2012, 08:54 AM	#4
Nordy On the road to being a farker Join Date: 01-16-11 Location: Ponca City, OK Downloads: 0 Uploads: 0	DISCLAIMER - (I deliver babies.. not tax forms) Seems like there is a tax rule that you can only show a loss in a "business" for a limited number of years before it becomes a "hobby" and you can't deduct a loss on a "hobby"... But i think you can still offset winnings with documented expenses. Maybe some tax professional can chime in...

02-22-2012, 09:41 AM	#9
BC Squared Full Fledged Farker Join Date: 09-16-11 Location: Kansas Downloads: 0 Uploads: 0	We cater a time or two...so that seems like the way to go. Any other suggestions are appreciated!

02-22-2012, 09:51 AM	#10
MoKanMeathead is One Chatty Farker Join Date: 05-02-05 Location: Grain Valley, MO Downloads: 0 Uploads: 0	You can claim hobby expenses up to the amount of reported income...however, hobby expenses are subject to the 2% of AGI restriction. Assuming you did have any other 2% deductions you would pay tax on your winnings - up to 2% of your AGI. ...At least that is the way I read the form and instructions.

02-22-2012, 10:17 AM	#11
HawgNationBBQ Full Fledged Farker Join Date: 05-17-09 Location: Phoenixville, PA Downloads: 0 Uploads: 0	LLC here. __________________ Michael KCBS, Certified Judge# 31757, MABA member -- JAMBO / J-3 -- Backwoods Competitor -- Ugly Drum Smoker -- XL BGE HAWG Nation on Twitter: @HawgNationBBQ www.TheBestMeatRub.com

02-22-2012, 10:34 AM	#12
Podge is One Chatty Farker Join Date: 09-25-06 Location: Elk Creek, Ky. Downloads: 0 Uploads: 0	Ford is right.. that's what I do.

02-22-2012, 04:46 PM	#13
trueque Full Fledged Farker Join Date: 05-17-10 Location: Chesterfield, MO Downloads: 0 Uploads: 0	LLC here for 2012. Sent using Tapatalk __________________ Michael [URL="http://www.truequebbq.com"]TrueQue Competition BBQ Team[/URL] Backwoods Competitor Stoked Backwoods Party Weber Smokey Joe

02-22-2012, 06:21 PM	#14
CivilWarBBQ is One Chatty Farker Join Date: 08-08-07 Location: Cartersville, GA Downloads: 0 Uploads: 0	LLC in 2011. It's cleaner for us to keep the team's finances totally separate from the restaurant books. Avoids the unpleasant surprise of the Head Cook getting 1099s on his personal taxes. Won't save you any money though. If you win more than you spend, you're gonna have to give the gubmint their cut, plain and simple.