Having trouble with taxes

[Whowefoolin]

OK guys, a little help here. Tax time coming up and the wife handles the money issues. She is starting to worry about declaring my umpire money. I rougly made $2000 last year. Some by cash, others by check.

I thought I heard somewhere that legislation in California made all officials independent contractors. Is this true? Also, if they did, what about a business license? I know it is far fetched, but the wife is stressing! I guess I made too much for her to relax about it.

Any help, or direction you can give will be appreciated. Don't know if this info helps, but was never given a 1090, my association is not officially registered as a business or club.

Thanx

Max

[Steve M]

Max,
Did you keep track of the miles to & from your games, any tolls, other things like that, associations' dues, equipment that you bought? Look at adding all that up and I'll bet that you made a whole lot less than $2000.

I declare my umpire income each year. I forget what form - the turbo tax software pretty much "conducts an interview" and all I do is fill in the numbers. I pay a little in fed, state, & local income tax, and also FICA.

With the mortgage, a kid in college, and donations, I really don't feel any impact from declaring my umpiring income. Besides, doesn't integrity pretty much require that we declare our income?

[cmcallm]

I keep track of all my umping mileage, and any meals I eat on the road, any gear I buy, my REFEREE subscription, phone calls, postage & office supplies, uniforms, game insurance, and rule books/videos. You can write it all off against what you make umping. Ask your tax guru for a Schedule C, and plug in all those numbers on that form. You'll get a Profit or Loss final number, and that number is what your umping season boils down to financially. I've made several thousand bucks a year, and by the time I get done writing stuff off I about break even. BEWARE, however - you have to end up in the "black" two out of every three years, or the IRS classifies your umping as a hobby, and then you have to declare EVERYTHING you make but won't be able to write off ANYTHING.
I have a buddy who only declares income he gets a 1099 for from the schools, and writes off against that. He pockets the cash, doesn't write off against cash games, and he ends up in about the same boat I do -= but if he gets caught not declaring it ALL, he'll get audited for the previous umpteen years and every year from now on.

Your choice.

[Bradley Batt]

BEWARE, however - you have to end up in the "black" two out of every three years, or the IRS classifies your umping as a hobby, and then you have to declare EVERYTHING you make but won't be able to write off ANYTHING.

I don't believe this is true - you might want to double check with your tax consultant/attourney/accountant. This has gone around as a rumor - that 2 of 3, 5 of 7 years, etc. you have to be profitable, but I believe that the only requirement is that you show that it is a legitimate business, which officiating certainly is.

Of course, you will be audited one day regardless!

[Bradley Batt]

Thanks Jim - there's a lot of good information there.

I think that what it comes down to is that the IRS is going to do whatever the H*LL it wants to!