Do we have to claim income from a fundraiser for my daughters softball team?

Question

We clean a gymnasium for a NCAA basketball program. We get paid money for it and use it as a fundraiser for my daughters basketball team. We were asked to fill out a W-9 so that a 1099-misc can be sent to us. What can be done so that we do not have to claim this income since it truly is a fundraiser?

Answer 1

  I hate to be the one to tell you...but, it seems like you might have created a mess (even though your intentions are good). But, maybe not it depends on how you have it set up.

  There are several questions that would have to be answered before anyone can give you a complete answer. The very first question is your daughters softball/basketball team part of a 501(c) corporation (meaning a listed non-profit orginazation)? The second question is do you donate this money to the orginazation (not directly to the team)?  If either answer is no then it is not deductible. Making the assumption that it qualifies as a deductible charity you still might have a few problems.

  The next part that needs to be defined is who is the 'We'  that cleans the gym.  Is this done through a 501(c)?  And if so is payment made directly to the 501(c)? Who is listed on the contract (I assume you have one)? If not who are the checks written to?

  If the 'WE' is the 501(c) corporation then you don't have any thing to worry about...the university will issue a 1099-MISC to the 501(c) and they report it on their tax return. However, if the 'WE' is not the 501(c) then you might have different problems.

  If the 'WE'  is just a group of individuals (even if it is the players) then you might have created a partnership...or it could be a simple Schedule C situation. Neither is good news for what you wanted to accomplish...it all depends on the contract with the university  (either written or oral there is a contract).

  If it is a partnership then that is a totally seperate entity and would have to file a partnership return (which carries over to the personal returns of the partners). The partners might be liable for self- employment (SE) tax. If it is a sole proprietor then a Schedule C must be filed and SE tax does apply (so a Sch. SE needs to be filed too).

  As stated before it is hard to answer your question without a lot more information.

Hope this helps.

EDIT: One final question...is it a softball team or a basketball team?

Answer 2

You can list the amount as a donation on your 1040  or have the money sent directly to the Basketball team  that way they will report it as income not you

Answer 3

You are being paid for this job. That is what the 1099 misc is for. It has to be claimed on your taxes. Donations to her program are deductible if they are a registered charity.  

Answer 4

It's taxable income - you are working and being paid.  It's not a gift or donation.  It doesn't matter what you spend it on any more that if you donated money to the team from a regular job you had.

And you can't claim the amount as a charitable deduction as one responder suggests, unless the team is a 501(c)3 charitable organization.  Just being a nonprofit does not make donations tax deductible..