Hi,
Is there any info on how taxes might work for small tournaments. I am using EventBrite for registration. I am paying out $600 in prizes and should pull in that much in registration fees.
Also, does anyone recommend forming an LLC or filing for non-profit status if running an few of these local tournaments a year?
Thanks.
If you are only doing a few, and breaking even, overall its probably less work to just file them on Schedule C with your regular taxes. Forming a single member LLC won’t change that. If there is a chance that you could be paying $600 or more to a single person in a year, you’ll need to get a W9 from them and file a 1099 for them for the tax year.
If you have a local small business accountant that you trust, have a cup of coffee with him, he should give you a free half-hour to an hour meeting to discuss your current needs, and if you don’t need him now, when you will.
If you keep all your receipts and expenditures on one or more spreadsheets for the year, you could pass it to him at the end of the year and for a nominal cost have him do the filing for you.
Are you in a small town?
Awesome thanks. I was thinking the same things, so I feel better that you verified it. But yeah I think I will talk with a professional if things grow.
How would you qualify for non-profit status? I can’t imagine making enough in “small tournaments” that would make that worthwhile.
Alex Relyea
Typically it costs $1000 or more to incorporate and file for NFP status with the IRS. They can take months to decide whether or not to grant it.
Your business status (sole proprietorship, corporation, NFP or not) has nothing to do with whether you have to file 1099’s for people who win $600 or more in cash prizes in a calendar year from you. (Yes, it is cumulative.) And the IRS has been talking about only accepting 1099 reports from payors electronically, though I’m not sure if that’s official yet. There have also been proposals to require that the IRS have access to all business checking accounts to see who you’re paying $600 or more a year to.
Thanks all. It’s all new to me. I kid you not there has not been a tournament in coastal Mississippi since 2004 and not one in my city of residence since 1993 that I can see.
Jerry, there are far too many places where tournament chess is hard to find. I hope you’re able to run some successful tournaments.
For what it’s worth, we show around 20 current members living in the Gulfport/Biloxi metro area as of the end of May.
would think they could draw a decent turnout with the military bases and casino crowds… i’d go in winter time!
…scot…
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