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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13116
Experience:  15years with H & R Block. Divisional leader, Instructor
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Can you set up a business that sponsors a professional athlete's

Customer Question

Can you set up a business that sponsors a professional athlete's business expenses?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: My son is a professional golfer. He needs some sponsors to be able to continue playing on tours in Asia.
JA: Is there anything else the Accountant should be aware of?
Customer: Not that I can think of.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 5 months ago.
Category: Tax
Expert:  Robin D. replied 5 months ago.
HelloA professional athlete can be a business already, self employed. If your son wishes to have a different business entity he could look to an LLC. As he would be the only member there is still a self employment issue for taxes.For tax purposes, the formation of a single owner limited liability company provides no additional tax issues to consider because the entity may be disregarded under the tax code. On the other hand, the formation of a corporation creates a separate tax entity and raises several more tax consequences in addition to those already discussed. The professional golfer has to file separate corporate returns with both the IRS and all relevant states in addition to his/her individual return. The professional golfer may be subject to double tax if the golfer chooses C corporation status, once at the corporate level and once at the individual level. The golfer must pay himself/herself a reasonable wage from the corporation and file all of the necessary payroll tax reporting documents with the IRS and each associated state. The existence of a corporation may also provide the golfer with additional fringe benefits and retirement plans.Professional golfers incur countless expenses to stay on top of their game; naturally, they want to use these deductions to lower their total income that is subject to tax. Professional golfers are allowed to deduct all of their ordinary and necessary expenses incurred in playing the game to lower their tax bill. Ordinary and necessary expenses for a professional golfer include costs of agents, management companies, equipment, tournament entry fees, instructors, personal trainers, even sports psychologists. There is no end to the amount of deductions the professional golfer may use to offset taxable income, as long as those expenses are ordinary and necessary to the profession.
Expert:  Robin D. replied 5 months ago.
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