Powwows that tax

[WhoMe]

More and more, powwows are taxing winners of their contests. It all starts with filling out a IRS form at the registration table.

Do powwows have a moral obligation to inform potential visitors that their contest winnings are subject to being taxed in their advertisements?

Would dancers and singers still attend a powwow if the real (after taxes) prize money was posted on powwow posters and the internet?

Is being taxed in the U.S. fair to First Nations winners from Canada?


Whatcha' think???

[NorthofAda]

I've been to powwows that tax. They tell you up front (can't remember if it's in writing or if they just announce it) that any winnings over $600 have to have paperwork filled out for tax purposes.

I think people would still attend if the amounts were displayed after tax, but most things aren't anyway. When you're offered a job you're told the hourly rate or the annual salary before tax, and that's the number you work from. Same as when you see an advertised price for something. You know tax will be on top of that unless it is posted otherwise as tax included.

Not sure about the Canadian issue. I know when you travel to the UK and pay VAT on stuff you buy there you can send a form in and actually get that tax portion rebated to you after you return home. I'm not sure if there is a way for Canadians to get that part back or not.

[CarloC]

No matter what most Casinos and Colleges are required to tax the winners if it is $600.00 or more! Most powwow committees at either of the above are having to follow policy and procedure according to their respective businesses or administrations. I also feel that if they didn't have to they would rather not tax to bring in larger crowds. Really taxing will only affects those that win time after time, consistent winners. I have only heard of one casino that taxes put relates to potential dancers that they will pay the taxes for them, pretty kool!

As far as teh First Nation people, most casino establishments, powwows or gambling are required to withhold 30% of any winnings, no threshold amount.

Also heard the same is for Canada, that they can receive back any taxes paid in the states once they return home, not sure though, just heard.

[xTekno]

All you do to counter that is to keep track of your mileages, lodging expense, meal expenses, repair expenses, supply costs, registration fees, etc. Anything that is a legal deduction for a small business that you can write off against the 1099 forms at the end of the year.

[Paul G]

All you do to counter that is to keep track of your mileages, lodging expense, meal expenses, repair expenses, supply costs, registration fees, etc. Anything that is a legal deduction for a small business that you can write off against the 1099 forms at the end of the year.

One of the problems that comes out of this about drums. How do you tax a drum group that wins money? I've heard several cases where the drums just assign that to one (lucky) person on the group.

Anyone heard of a drum forming an LLC to handle the tax liability?

[NorthofAda]

One of the problems that comes out of this about drums. How do you tax a drum group that wins money? I've heard several cases where the drums just assign that to one (lucky) person on the group.

Anyone heard of a drum forming an LLC to handle the tax liability?

I haven't - but that would certainly facilitate what TTechno suggested about deducting travel expenses and such. Might mitigate the tax burden.

[Toolbox]

If I remember it correctly any income over $600 is required to be reported to the IRS and you will get a 1099-MISC with the amount on it and if any taxes were with held, then you file them with your taxes. As TT said to get that money back simply deduct mileage and other expenses and in fact if winning powwow contests isn't your job you may be able to call it a hobby and get more back and deduct things that you can't by calling it a business. 1099-MISC nearly wrecked my face when I filed for last year, but I found that you can deduct everything from interest on car payments to auto insurance, and of course mileage; thankfully I don't rely on being a subcontracted worker anymore as the main company I worked for hired me full time, so I will only have one small 1099 for some studio work.

[powwows-r-us]

personally after thief river falls powwow, i don't think my family and i will be attending anymore states powwows, not after my 9 year old daughter was taxed on her 200 dollar winnings which she received a month and 3 days after the powwow by mail. we went to grand forks and the committee made it sound like we weren't going to be taxed and if they did take any off to give them a call, making it sound like they were gonna help us, so we gave them a call after receiving my daughters winnings that were taxed, only for them to tell us that we have to get it off the gov't.... i think it will only be a courtesy to the dancers that come to let them know on their posters that your winnings will be taxed at a states powwow to eliminate any sour grapes later........after all when you come to a canadian powwow and its says you will win lets say 1000 for 1st, that is what you'll get!

[WhoMe]

One of the problems that comes out of this about drums. How do you tax a drum group that wins money? I've heard several cases where the drums just assign that to one (lucky) person on the group.

Anyone heard of a drum forming an LLC to handle the tax liability?

Paul,

This is a problem for many drums. The lead singer gets stuck with figuring out how to pay the taxes accumulated from a year's worth of work.

I have heard of YB forming a LLC to handle their taxes and it has been extremely helpful.

My drum first incountered the tax dilemma during one of the early Schmitzuns. Each one of us had to turn in our social security numbers in.

At a major powwow that I helped with, two of the drum winners turned in bogus social security numbers. Of course our phone calls were never returned. As a result our powwow committee had to pay the existing tax debt.

[WhoMe]

I think people would still attend if the amounts were displayed after tax, but most things aren't anyway. When you're offered a job you're told the hourly rate or the annual salary before tax, and that's the number you work from. Same as when you see an advertised price for something. You know tax will be on top of that unless it is posted otherwise as tax included.

Not sure about the Canadian issue.

North,

I think I will answer your post using quotes from powwows-r-us:

"...i don't think my family and i will be attending anymore states powwows, not after my 9 year old daughter was taxed on her 200 dollar winnings which she received a month and 3 days after the powwow by mail. we went to ...the committee made it sound like we weren't going to be taxed and if they did take any off to give them a call, making it sound like they were gonna help us, so we gave them a call after receiving my daughters winnings that were taxed, only for them to tell us that we have to get it off the gov't.... i think it will only be a courtesy to the dancers that come to let them know on their posters that your winnings will be taxed at a states powwow to eliminate any sour grapes later........after all when you come to a canadian powwow and its says you will win lets say 1000 for 1st, that is what you'll get! "

[Kakeeya]

......after all when you come to a canadian powwow and its says you will win lets say 1000 for 1st, that is what you'll get!

I remember going to some Canadian powwows and even though I won first for my category and placed in a special, in Canadian $$$ I felt rich....ha . Once I transferred it to US dollers, it was reduced greatly..... lol But that was expected and I knew if I was lucky to place that the exchange would be different and that was okay. I know different subject.

[Kakeeya]

I think a lot of us that dance are pretty used to having to give our Social security number or ID when we register at the casino powwows. Placing at Schemitzen and Mohegan and getting the big bucks is fun until tax time rolls around. I've heard the dilemma that the drum groups face and I hope something can be done so that they are all treated fairly.

[xTekno]

I remember going to some Canadian powwows and even though I won first for my category and placed in a special, in Canadian $$$ I felt rich....ha . Once I transferred it to US dollers, it was reduced greatly..... lol But that was expected and I knew if I was lucky to place that the exchange would be different and that was okay. I know different subject.

Where the heck have you been?

[Kakeeya]

Where the heck have you been?

I sneak in occasionally, real quiet. :)

[xTekno]

Let's sneak real quietly into canada then ... and live filthy rich!