Tax Problem

liquidhippo · Post by **liquidhippo** » Thu Jan 06, 2005 3:27 pm

a) What form does Krause use when reporting winnings of the participants? This is very important as, from what i understand, the tax implications could change drastically depending on the form.

b) When did Krause pay the winners for the 2004 NFfC? In December? January? If they paid them in January or still have yet to send the checks, will Krause report the winnings as part of 2004 income? or 2005 income?

Thanks, the particulars will go a long way in helping me decide whether or not to play again next year in the 2005 NFFC. I had a blast, its a first class event, Greg and Tom do a great job, but the potential expected net payoff if i were to win has to be part the equation, for me. I normally file my own taxes, but if i have to pay some accountant $200 to figure out the tax end of things, the net payoff gets a little worse..

My team tanked it in the NFBC, but i won 2 other leagues, one paid almost immediately, but the other will take a couple months, thus creating a logistical nightmare when it comes to taxes. One league is issuing a 1099-misc, the other, i'm told, is issuing a W-2(which surprised me).
Even with all of the entry fees in 2004, since the payout is coming in 2005, one accountant has told me that NONE of my 2004 expenses incurred, including the 2004 entry fees, can be used as a deduction(although entry fees for 2005 contests would be). I hope he's wrong....

Depending on how all of this pans out, the expected net payoff could decline significantly.

Dyv · Post by **Dyv** » Thu Jan 06, 2005 6:55 pm

Uh, I'm not a CPA, but for one of the events you were involved in to issue you a W-2 is sheer stupidity.

Oh, and if your accountant charges you $200 to record half a dozen numbers on a piece of paper and tell you which paper to use you're getting screwed raw.

I'll let Greg and co. answer the timing and forms they are issuing, but I'm assuming 1099-misc.

Dyv

JerseyPaul · Post by **JerseyPaul** » Thu Jan 06, 2005 7:04 pm

I'm also not a CPA but I stayed in a Holiday Inn Express... I'm planning on a 1099-M and offsetting all my expenses.

Greg Ambrosius · Post by **Greg Ambrosius** » Fri Jan 07, 2005 3:57 am

It's a 1099 miscellaneous. Some guys who got their W-9s in right away received checks last week. I believe a dozen of the 32 checks went out last Wednesday, one day after the final NFFC post-season game. Because of the holiday break and most of our accounting staff out last Thursday and Friday, the remaining 20+ checks didn't go out until this week, the first week of 2005. Our accounting guy said you should check with an accountant on whether this is a 2004 revenue or 2005. Honestly, I'm trying to figure this all out too as I just assumed all of this was 2004.

I don't know if that's good news or bad news and I'll let others chime in that know more about taxes than me. But for the record, some checks went out in 2004 and some went out in 2005.

[ January 07, 2005, 10:33 AM: Message edited by: Greg Ambrosius ]

Route Collectors · Post by **Route Collectors** » Fri Jan 07, 2005 12:34 pm

Originally posted by JerseyPaul:
I'm also not a CPA but I stayed in a Holiday Inn Express... I'm planning on a 1099-M and offsetting all my expenses. Same here JP. My accountant told me yesterday I could deduct all of my expenses as long as they did not exceed my winnings.

RC

JerseyPaul · Post by **JerseyPaul** » Fri Jan 07, 2005 12:48 pm

Greg,

The revenue to KP occured in 2004. The event terminated in 2004. I would assume KP accrued the payouts as a 2004 event. Whether or not the checks were physically mailed in 2004 or 2005, this was a 2004 event. KP should therefore issue 2004 1099's to all the winners.

The issue is this... It is my belief that entry fees to other similar events in 2004 are also an offset if all the 2004 event fees and all the 2004 winnings are included in a "fantasy sports" Schedule C. If the 1099 is 2005, we will lose the inclusion of the other 2004 events.

GB the Holiday Inn Express.

Gordon Gekko · Post by **Gordon Gekko** » Fri Jan 07, 2005 12:59 pm

Originally posted by JerseyPaul:
Whether or not the checks were physically mailed in 2004 or 2005, this was a 2004 event. KP should therefore issue 2004 1099's to all the winners.if i didn't get my "income" in 2004, how can it be included on my 2004 tax return? makes no sense. did you run this by your accountant or is this JP talk? btw, i know the answer to this...

[ January 07, 2005, 07:02 PM: Message edited by: Gordon Gekko ]

liquidhippo · Post by **liquidhippo** » Fri Jan 07, 2005 2:03 pm

Thanks to everyone who took the time to reply.

Dyv - yeah, the fact the other event is using the W-2 form was unexpected, i'm guessing they're actually referring to 'W-2g' forms as those are used for gambling winnings(even though this is a game of skill). As far as the accountant's fees, the accountant that does taxes for our band normally charges between $250-$400 each year. Our bass player also has him do his personal taxes for $175, and he considers both rates to be 'a steal.' I think he's insane, and have had a phobia of accountant fees ever since.

Route Collectors · Post by **Route Collectors** » Sat Jan 08, 2005 1:48 am

Liquid

You got my attention when you mentioned your band. I'm a drummer myself. What are some of the particulars about your group?

RC

liquidhippo · Post by **liquidhippo** » Sun Jan 09, 2005 5:58 am

Route C,

We're Gingley JoH, a four piece band, playing all originals, all covers, or a mix depeding on the venue. Gingley JoH has been going strong for over 14 years. We've gigged at Columbus area venues such as Oldfield's on High, Ruby Tuesdays, Little Brother's, Shorty's, Alrosa Villa, Newport Music Hall and others, plus stints in northern Ohio, West Virginia, Maryland and Pennsylvania. Cuts from our full length studio release, "banter" and EP, "Six Musical Selections That Don't Suck" have been heard on CD101, 99.7 The Blitz, and on college radio in many parts of the country.