Last month, I was invited to speak at the 2016 National Professional Anglers Association (NPAA) Conference, held Jan. 8-10 in Wisconsin Dells. The conference topic “From Passion to Profession” could not have been more appropriate. I may be biased because I come from a family of anglers, but professional anglers, in my opinion, are by far some of the most passionate sportsmen and sportswomen you’ll ever meet. It was a privilege to spend the weekend in their presence.
As part of the weekend’s itinerary, I spoke at four seminars on the topic “From Passion to Profession in the Eyes of the IRS,” along with my colleague Joe Rubenstein. While we were confident in our topic, we were surprised at its overwhelming popularity among the anglers. As it turns out, many anglers are blindly casting lines when it comes to their tax situation. And, unfortunately, this can come back to bite them in a big way.
The tax issue most anglers deal with is something professional athletes deal with too: multi-state tax filings. You see, anglers routinely travel across state lines to compete in tournaments. Many don’t realize that when they win prize money in a tournament, the state where the tournament was held can tax their earnings. And when an angler competes in multiple tournaments within multiple states, things can become tangled rather quickly. This puts the angler at risk of costly tax errors or even IRS/state audits.
With this in mind, we shared ways anglers can avoid this and other tax issues. We also made sure anglers were aware of the difference between a hobby and a business (in the IRS’s eyes), the importance of good record keeping, and how tax planning can maximize their savings.
Our presentations at the conference seemed to shed some much-needed light on this topic, and we look forward to future opportunities to help professional anglers enjoy their passion more freely. In the meantime, if you have questions about your tax situation, please don’t wait to give our office a call.