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  1. #1
    Join Date
    May. 26, 2005
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    1,481

    Default prize money

    Can someone please explain how prize money is reported?

    I know show entries ask for your SSN. I assume that this is for the purpose of reporting prize money. So do they send a report to the IRS listing all the prize money paid out? If it is taken off your show bill (as opposed to them writing you a check) is this handled differently? Do you have to claim all prize money or only claim once it has reached a certain amount? What if the rider is a foreign citizen in the States going to college? How is this reported and what does this person have to do in order to stay in good with the IRS?

    Help please!



  2. #2
    Join Date
    Dec. 4, 2002
    Location
    Alpharetta, GA
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    Default

    The show will issue you a 1099. Treat it like any other 1099. You report it as income.



  3. #3
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    Feb. 18, 2003
    Location
    Alberta
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    Default

    Wow......so what happens as a Canadian showing in the States? We don't have to report our winnings up here (I don't think, I don't win enough anyway ) and we don't ever get asked for our SSN on our entries. I will be showing in the US next year, will I have to show a Canadian SSN on entry forms??
    Go Ahead: This is a dare, not permission. Don't Do It!



  4. #4
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    Oct. 25, 2006
    Location
    NY/VT
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    263

    Default

    Quote Originally Posted by eclipse View Post
    Wow......so what happens as a Canadian showing in the States? We don't have to report our winnings up here (I don't think, I don't win enough anyway ) and we don't ever get asked for our SSN on our entries. I will be showing in the US next year, will I have to show a Canadian SSN on entry forms??
    If you don't have a US social or federal ID #, the show is required to withhold 30% of your prize money to pay in taxes.
    ILOVERMONT



  5. #5
    Join Date
    May. 26, 2005
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    Default

    Huh. That's interesting. We have a foreign college student at our barn this year and he just won some decent prize money over the weekend (which is what made me start thinking about this whole thing). I clearly checked the "non US Citizen" box on his entry and the show did not withhold anything. Why do I think this is going to turn into a major pain in the butt?!



  6. #6
    Join Date
    Oct. 25, 2006
    Location
    NY/VT
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    Default

    Quote Originally Posted by skyy View Post
    Huh. That's interesting. We have a foreign college student at our barn this year and he just won some decent prize money over the weekend (which is what made me start thinking about this whole thing). I clearly checked the "non US Citizen" box on his entry and the show did not withhold anything. Why do I think this is going to turn into a major pain in the butt?!
    Was it less than $600? In that case they wouldn't need to withhold anything...
    ILOVERMONT



  7. #7
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    Sep. 13, 2002
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    Azle, Teh-has
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    Default

    wow. I'm clueless and my head is in the clouds.

    I had no idea that prize money needed to be reported with taxes!!!

    If the gov is going to do that then owners should be able to report all of the annual spendings paid out to GET that prize money for a tax refund. sheesh!
    http://kaboomeventing.com/
    http://kaboomeventing.blogspot.com/
    Horses are amazing athletes and make no mistake -- they are the stars of the show!



  8. #8
    Join Date
    Nov. 10, 2009
    Location
    Northern California
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    557

    Default

    You have to win a certain monetary amount before they will send a 1099. I believe it is $600.00 and then that show will send the information to the IRS and a 1099 to whomever was put down as the person to recieve checks on the entry form.



  9. #9
    Join Date
    Nov. 10, 2009
    Location
    Northern California
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    557

    Default

    Quote Originally Posted by purplnurpl View Post
    wow. I'm clueless and my head is in the clouds.

    I had no idea that prize money needed to be reported with taxes!!!

    If the gov is going to do that then owners should be able to report all of the annual spendings paid out to GET that prize money for a tax refund. sheesh!
    If you are winning enough money then you incorporate and claim all costs of the horse and showing against your winnings. That is why lots of LLC's own horses.



  10. #10
    Join Date
    Aug. 12, 2010
    Location
    Westford, Massachusetts
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    Default

    Note that, even if you do not get a 1099 because you won less than $600, you are still supposed to report your winnings on your tax return.



  11. #11
    Join Date
    Sep. 24, 2001
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    on the road.....again
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    Default

    As someone who runs the office for many shows, here is how it is handled at the majority of shows.

    A company is required to report to the IRS any prize winnings paid out to anyone person over the course of the year if the amount exceeds $600. Keep in mind that can be over multiple shows if they run more than one.

    If the person is a foreign exhibitor, the rules are the same, however there are a few differences to be noted. If you do not supply a US SSN or Tax ID # a show must withhold 30% and turn that withholding over to the IRS as it is assumed that the person will not be filing a tax return.

    In many cases, if you are a foreign rider, your trainer may elect to have the prize money reported to them and give you a credit on your bill. I see that happen often.

    There are a few exception so the 30% rule. If it is a Canadian business, we are not required to withhold. There are also a few countries that have tax exemption status for their citizens.

    And there are shows that do not report to the IRS and therefore don't ask for your information. However, as was already stated, even if you do not receive a 1099 you should be reporting any winnings.

    Think of your prize winnings as winning a scratch off lottery ticket. The IRS, unless you have formed a business, consider this a hobby and any winnings from said hobby are treated as misc income. Unless you are a business you cannot claim expenses for a hobby.



  12. #12
    Join Date
    Oct. 14, 2007
    Location
    California
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    3,806

    Default

    I hope to have that problem some day. Thanks for the info!
    How people treat you is their KARMA.... how you REACT is yours!



  13. #13
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    Feb. 3, 2000
    Location
    Nokesville, VA
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    Default

    Quote Originally Posted by purplnurpl View Post
    wow. I'm clueless and my head is in the clouds.

    I had no idea that prize money needed to be reported with taxes!!!

    If the gov is going to do that then owners should be able to report all of the annual spendings paid out to GET that prize money for a tax refund. sheesh!
    Yes.
    Even if you report it as a "hobby", not a "business", you can deduct expenses UP TO the ammount of earnings.
    Janet

    chief feeder and mucker for Music, Spy, Belle and Tiara. Someone else is now feeding and mucking for Chief and Brain (both foxhunting now).



  14. #14
    Join Date
    Feb. 3, 2000
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    Nokesville, VA
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    Default

    Quote Originally Posted by skyy View Post
    Huh. That's interesting. We have a foreign college student at our barn this year and he just won some decent prize money over the weekend (which is what made me start thinking about this whole thing). I clearly checked the "non US Citizen" box on his entry and the show did not withhold anything. Why do I think this is going to turn into a major pain in the butt?!
    It has NOTHING to do with whether or not you are a US citizen -

    It is about whether you have SS# or other tax ID.

    The vast majority of non-citizen permanent residents have SS#s
    Janet

    chief feeder and mucker for Music, Spy, Belle and Tiara. Someone else is now feeding and mucking for Chief and Brain (both foxhunting now).



  15. #15
    Join Date
    May. 26, 2005
    Posts
    1,481

    Default Molly99 and Janet

    Thanks everyone for your input,especially Molly99 and Janet but now I have more questions Molly99! If the trainer pays all of the client's show fees and the prize money is taken off the bill, does the show issue a 1099 (if it's above $600) to the trainer because the trainer took the credit (and wrote the check) or to the client because technically they are the one who earned the prize money? I really want to do things correctly and not run afoul of the IRS.

    I am so woefully ignorant! But I tend to not educate myself until I need to know something and then I go into research mode! I had no idea a non citizen could get a SSN. I thought you had to be an American citizen to get one.



  16. #16
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    Feb. 3, 2000
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    Nokesville, VA
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    Default

    Quote Originally Posted by skyy View Post
    I had no idea a non citizen could get a SSN. I thought you had to be an American citizen to get one.
    You have to have a SS# before you can open a bank account, (legally) get a job, or be claimed as a dependant on your parent's tax return.

    You know that thing they taught you in history class-
    "No taxation without representation"?

    They lied.

    We (non-citizen legal residents) pay taxes, but have no vote.
    Janet

    chief feeder and mucker for Music, Spy, Belle and Tiara. Someone else is now feeding and mucking for Chief and Brain (both foxhunting now).



  17. #17
    Join Date
    Nov. 16, 2006
    Location
    South of Nowhere
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    258

    Default

    Quote Originally Posted by Janet View Post
    You have to have a SS# before you can open a bank account, (legally) get a job, or be claimed as a dependant on your parent's tax return.

    You know that thing they taught you in history class-
    "No taxation without representation"?

    They lied.

    We (non-citizen legal residents) pay taxes, but have no vote.
    Foreign individuals who aren't eligible to get a SSN actually get an Individual Taxpayer Identification Number (ITIN). ITINs look like SSNs, but they always start with the number 9, and the middle two digits are between 70 and 88. For example, 9xx-73-xxxx. ITINs are used solely for Federal income tax purposes.



  18. #18
    Join Date
    Jun. 20, 2008
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    3,928

    Default

    Quote Originally Posted by Janet View Post
    Yes.
    Even if you report it as a "hobby", not a "business", you can deduct expenses UP TO the ammount of earnings.
    How can you report any prize money as hobby? And no offense to the valuable advice given on this BB but really people, if you have legal questions like this the person you really should be asking is a CPA as there are other issues - like local and state taxes... now I will say, there might be some CPA's or accountants out there that haven't a clue about wining prize money at horse shows and equine related expenses.

    And - not that this will ever be my problem, I don't think I would permit any trainer to request prize winnings be credited to them and applied to my bill...what bill - show bill or trainer's bill- show bill okay, trainer bill - not okay...



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