TB team and 501c?

[Doug Romrell]

Please cite a Internal Revenue Code code section that allows you to deduct all of your softball related expenses?

What you are suggesting is tax fraud, whether or not you actually get flagged for an audit is irrelevant. And yes it does make a huge difference if you donate to a qualified religious organization vs buying your DD the latest composite bat and trying to deduct it.

Tax fraud??? I don't think so. Simply treat your team as a sole-proprietor business (of yours) that generates revenue and expenses and include a Schedule C. Given the revenues of the team generally equal expenses, there shouldn't be much of an effect on your personal income taxes.

 

[PA SB Dad]

When reading the IRS info, I was led to believe that the filing fee (Form 1023) is a one time gig. And I see the fee as 400 for under 10k annual revenue and 850 if above 10k. Am I missing something?

When I last looked at the user fees (2011), my understanding was that it was $800 for clubs with less than $10K revenue over 4 years, and $3000 for clubs with income greater than that. As I look at the current (2013) year, the user fee amounts match yours: Exempt Organizations User Fees - 2013. I filed a 1024 rather than a 1023 for the reasons I stated previously.

 

[Rocketech1]

Tax fraud??? I don't think so. Simply treat your team as a sole-proprietor business (of yours) that generates revenue and expenses and include a Schedule C. Given the revenues of the team generally equal expenses, there shouldn't be much of an effect on your personal income taxes.

First off, SCdad didn't say that he set-up a business entity and is deducting his softball related business expenses from his softball related business income. You cannot offset your softball related business expenses from your personal income revenue (such as W-2 wages) unlike say deducting charitable contributions to a legitimate qualified charitable organizations such as the Red Cross, church, etc. The best way for him to do this is to register his team as a non-profit tax exempt organization under 501(c)3 or similar entity structure.

It's not as easy as he makes it seem.

 

[Doug Romrell]

First off, SCdad didn't say that he set-up a business entity and is deducting his softball related business expenses from his softball related business income. You cannot offset your softball related business expenses from your personal income revenue (such as W-2 wages) unlike say deducting charitable contributions to a legitimate qualified charitable organizations such as the Red Cross, church, etc. The best way for him to do this is to register his team as a non-profit tax exempt organization under 501(c)3 or similar entity structure.

It's not as easy as he makes it seem.

Given that description, you are correct, and I agree.

 

[SCDad]

Please cite a Internal Revenue Code code section that allows you to deduct all of your softball related expenses?

What you are suggesting is tax fraud, whether or not you actually get flagged for an audit is irrelevant. And yes it does make a huge difference if you donate to a qualified religious organization vs buying your DD the latest composite bat and trying to deduct it.

Virtually every travel team has a tax ID number, and can be considered a charitable group. Same for the high school team.

Every check I write to the travel softball organization (fees), or the high school team booster club (goes directly to the players), or the church. I keep a copy of all of these checks. Come tax time I have a group of check copies I consider charity. For example this year may be $1000 for the HS, $1000 for travel team, and $2000 for church.

As long as the total is below $5000, and the intent is honest, I do not worry one bit.

I don't put bats, gloves, hotels, gas in any of this group.

Nor am I inclined to ask the HS, or travel org., or church, the exact nature of their tax filings.

I really get a kick out of folks who jump to conclusion, and throw out accusations of tax fraud with such limited information. It speaks to the posters intelligence.

And even if some of the more intelligent posters consider it tax fraud, it does not really matter to me. This is how I do it. I contribute plenty to society. This is how I understand the tax code. If I am wrong, so be it. I am just passing along information on a message board, and not trying to drain the economic engine of the USA.

 

[Rocketech1]

And even if some of the more intelligent posters consider it tax fraud, it does not really matter to me. This is how I do it.

Wow...I don't know what else to say....

 

[SCDad]

I do not consider it tax fraud. Now that you want to call me out, please enlighten me. Is this method tax fraud?

 

[FrozenRope]

I do not consider it tax fraud. Now that you want to call me out, please enlighten me. Is this method tax fraud?

Your annual fees are not tax deductible. You are paying for a service. If you made a contribution (donation) above and beyond the required fees, that is tax deductible...if and ONLY if the organization is a registered 501(c)(3) entity. As PA SB Dad points out, not all orgs are registerd as 501(c)(3). If they are, they would provide you a tax form (I think its a 1098-misc). You can also download or search for qualified tax exempt organizations on the IRS Website. ([url]http://apps.irs.gov/app/eos/forwardToPub78Download.do)[/URL]

Going to Dick's and buying a CF6 for your daughter is also NOT tax deductible!! LoL

That said....if you want to roll the dice and list it as a deduction... rock on. Just remember... if you get audited..it's not only repayment of what you errantly deducted...its interest and penalties as well.

 

[Doug Romrell]

Your annual fees are not tax deductible. You are paying for a service. If you made a contribution (donation) above and beyond the required fees, that is tax deductible...if and ONLY if the organization is a registered 501(c)(3) entity. As PA SB Dad points out, not all orgs are registerd as 501(c)(3). If they are, they would provide you a tax form (I think its a 1098-misc). You can also download or search for qualified tax exempt organizations on the IRS Website. ([url]http://apps.irs.gov/app/eos/forwardToPub78Download.do)[/URL]

Going to Dick's and buying a CF6 for your daughter is also NOT tax deductible!! LoL

That said....if you want to roll the dice and list it as a deduction... rock on. Just remember... if you get audited..it's not only repayment of what you errantly deducted...its interest and penalties as well.

SCDad, I would pay very close attention to what FrozenRope has said here. Your annual fees are not tax deductible.

 

[FrozenRope]

I do not consider it tax fraud. Now that you want to call me out, please enlighten me. Is this method tax fraud?

The IRS would only classify it as "Tax Fraud" if you deliberately "cheated" on your tax return. If you play dumb, you're not much better off, you still pay penalties and interest in most scenarios.