W-9

[caseydog]

by law any prize money over $600 in total from the contest should be recorded and that organization has a legal obligation to file a 1099 with the IRS. To do this they need a W9 that lists your SSN/EIN (not sure what the TIN is).

Ahh, that makes sense. Yes, if there is prize money involved, you will need to give them a W-9. However, you should only have to do that if you actually win money. If you finish in 25th place, and there is no money paid out, then technically, there is no need for a W-9.

If you are really nervous about giving them a W-9 with your SS number on it, see if you can defer it to when, or if, you win something.

Otherwise, if you believe the competition organizers are ethical and professional, just fill it out and submit it.

CD

 

[didisea]

OP - you may want to consider becoming a Single Member LLC, and be a disregarded entity. This will allow you to get an EIN as your TIN, and you won't have to pass out your SSN to folks.

 

[dmprantz]

I guess this varies state by state, but I would consider getting a dba and then a sole proprietership, long before I considered an LLC. LLCs are great, but are among the most expensive companies to create. DBAs are darned near free an many states. I think this is a topic for another thread (Been discussed in many!)

dmp

 

[esselle]

What if I were to come over from the UK and by some miracle win something? Do I need to fill in one of these or pay anything in taxes if the competition isn't a charity one?

 

[roksmith]

If the competition requires a tax number, I believe you can file for a ITIN. I would think it would work for them.

 

[didisea]

esselle - for the BBQ teams, it matters not whether the competition itself is for charitable purposes, the teams would still have to report their winnings on their applicable income tax returns.

Presuming you are a British citizen, you would have to fill out a W-8 BEN form instead of a W-9. For a copy of this form and the instructions see the www.irs.gov website, and search "W-8."

I think you can avoid having to get an ITIN, which is an "individual taxpayer identification number," but it would depend on the British tax treaty provisions with the US. The "sticky wicket" would be that if the competion sponsor withholds any funds from your winnings for taxes. If they don't, there is no issue, but if they do you would need to know the tax treaty provisions between the US and GB. We believe that you might have the ability to take a foreign tax credit on your GB tax return, and that is how you would get credit for the income tax withheld in the US.
If you wind up having to file a US tax return to recover the funds withheld from your winnings, you would need to have the ITIN to file that return with the US IRS.
You should probably consult a foreign tax professional on your side of the pond to get the best advice on how it will ultimately work on your tax return.

 

[Just Smokin' Around]

In regards to deducting your expenses, you can offset your BBQ winnings with your expenses, but you cannot use your BBQ expenses to offset other gains like investment income. See hobby losses

Deductions for hobby income are part of the Other Miscellaneous Deductions allowed on a Schedule-A. There are limits on what you can deduct - not the same as business expense allowances. Moreover, you can only deduct the amount over 2% of your AGI. So, you don't get to deduct it all. If you don't compete a lot, you may not get too far over the 2%. If you have an AGI of 50k, you can only deduct the amount over $1000.00. Now, if you have other valid misc deductions like uniforms, union dues, legal fees, tax preparation, etc., that gets added to the 2% threshold and it can work out okay.

A business account can work much better if you have one (catering / vending business). All expenses are deductible. But, you need a valid business and need to turn a profit every so often. You can't hide a hobby as a business - or, at least don't get caught trying.

 

[Pigs on Fire]

Hope & Change