rec. hockey teams and taxes

[crazy4gear 0]

Hi everyone,

I did a quick search and couldn't find any posts, but if there are just point me in the right direction.

Just a little background: our adult hockey team plays in a local league. We have about 25 members. I have been recently named team treasurer(in past years the money has been kept in the team's account). In setting up this year's bank account, I asked if the previous treasurers had an EIN. They did not. They had used there own SS number. I, however do not want to use my own as that can be reported as personal income on which I may have to pay taxes.

We are not really an "organization" with bylaws etc and such, so we aren't really a Non-Profit. Plus the IRS website says that the fee is $300 each year for four years. We make no money from the account. The money that goes in comes out. We use it as a convience to write one check to the league and the rink for practice and game ice. For those of you who have been accountants, team treasurers or have helped set up teams any advice would be appreciated. Thanks in advance.

[Chadd 916]

You should only have top pay tax on the interest generated by the account. If you want to be really anal, just track the deposits and the checks you write and you will be able to show that the cash was not yours.

[fieldofdreams 0]

As lame as it sounds, I just keep the cash in an envelope, and mark each deposit and withdrawl on a spreadsheet which is forwarded to the other Captains.

Here's another (semi) related question: What have you guys done to raise cash for your teams? I have been trying and trying to procure a sponsorship, but in this economy, it's not happening.

Any ideas for fundraisers?

[Bucky25 0]

Most checking accounts don't pay interest and the ones that do pay a minimal amount...Assuming you don't carry a substantial balance from day to day, you should have very little interest to report. Now if $20 or even $100 per year in interest pushes you into the next tax bracket I suggest you go out and find a good CPA to dig for some extra deductions :D

But seriously, I think you are worrying about this way too much...if it costs you a few bucks have the boys buy you a 12 pack or if you don't drink maybe a roll of tape and some laces :)

[in da crease 0]

If you have a child under 18, set the account up in their name. Then, when you need write a check, go online, transfer the check amount from their savings account to yours and write the check.

I do that for summer programs and camps that I run. Not so much as to avoid taxes but just to keep it seperate from my personal accounts. I reserve 20 hours of ice at $4000 and start collecting money for the camp. As the money comes in, I throw it in an account in my kid's name. When the $4000 ice bill is due, I transfer that exact amount into my checking and write the check.

[crazy4gear 0]

Thanks guys for all of the great responses.

If I only have to pay taxes on the interest that shouldn't be a problem. Our yearly budget is around $20,000 with an intial deposit of around $5000. However, I know the banks report deposits to the IRS over a certain amount as income. I do not have a problem keeping track of everything, but I really don't want an additional 20 grand on my personal taxes. (Especially if I can't have fun with it lol) . If I get the team its own EIN number, does anyone know if I have to file "taxes" for the team and what form? It is free to get the number. I just want to cover my butt.

As for one poster that asked about raising money for their team. Our players can get individual sponsorships from businesses and friends, but on the whole our team does not have a sponsor. In the very beginning --over ten years ago--we were sponsored the rink bar. :D I know some of the teams in our league sell candy, raffle hockey sticks, etc. and do some of the other things that the kids teams do around here.

[chippa13 1844]

If your team is looking to make money, one of the best ways is to run a Las Vegas night.

[fieldofdreams 0]

If your team is looking to make money, one of the best ways is to run a Las Vegas night.

How would you go about doing that?

[chippa13 1844]

It is rather easy. There are folks around who run them and they provide all of the equipment and give you a brief crash course in running the games. It helps if guys on your team know a thing or two about casino games. Then all you need to do is get yourself a hall or the like, advertise a little and away you go. We ran a couple years back and it was pretty good. The guy who ran the company even helped our captain take care of all the tax paperwork at the end of the night.

[eric42434224 1]

Banks do not report deposits of any amount as income. You cant be taxed on your cost basis of non-qualified funds.....meaning you cant be taxed on the principal of non-IRA money you deposit. You cant be taxed on money you deposit as it has already been taxed. The bank will report the interest you earn on the account and you will recieve a 1099. On 20k, the interest in an account earning 1% for a full year is $200. Have the teams reimburse you for what you would pay in taxes on the interest earned. You really are making too big a deal out of this. If you want to avioid it alltogether, just open a NON-interest bearing accout like free-checking. Problem solved.

[Chadd 916]

Banks do not report deposits of any amount as income.

I believe that any transaction in excess of $10k requires the bank to notify the government.

[chippa13 1844]

A quick google search verifies what Chadd posted. Banks must report all deposits over $10,000.

[junior 1]

I would consider paying a few bucks and get a receipt book to fill out whenever a player gives you money. This way, if you get audited, the deposits can't be taken for cash deposits from under the table work.

[eric42434224 1]

Banks do not report deposits of any amount as income.

I believe that any transaction in excess of $10k requires the bank to notify the government.

Chadd, you are correct in that the bank must report that transaction over 10k (deposits or withdrawals) to the IRS, but it isnt as taxable income... all you need to show to prove it isnt taxable income to the IRS, if they audit you....is reciepts regarding the source and purpose of the funds. The bank will also ask about the source of the funds when opening the account. Also, any transactions over 10k in CASH must be reported with a CTR (Cash Transaction Report) which goes to the FBI. The FBI will forward it to the IRS if they think it is money laundering, or forward it to Homeland Security if it is suspected of having terrorist ties. Only the interest will be reported to the IRS for income purposes (1099).

Again, if this is for legitimate purposes, and you keep good records, you arent going to have any problems.

EDIT: One more thing. The bank will also watch for transactions just under the 10k amount, or a pattern of transactions that look suspiciously like they are trying to circumvent the 10k rule. Those will also be reported with a CTR. Just a piece of advice for all the Drug Lords and Terrorists on MSH ;)

[fieldofdreams 0]

It is rather easy. There are folks around who run them and they provide all of the equipment and give you a brief crash course in running the games. It helps if guys on your team know a thing or two about casino games. Then all you need to do is get yourself a hall or the like, advertise a little and away you go. We ran a couple years back and it was pretty good. The guy who ran the company even helped our captain take care of all the tax paperwork at the end of the night.

Sounds interesting. I'll do some reasearch and see what I can come up with.

[chippa13 1844]

It can be a lot of fun. One of the most important things, make sure that whoever you have dealing blackjack can be quick. The whole way to make money is by having as many hands as possible played.

[crazy4gear 0]

Thanks guys for all of the great info! I feel a little better now that I have some more facts.