Golf and Taxes
Updated: Apr 10, 2018
Mark Twain famously said, “Golf is a good walk spoiled,” but millions of Americans enjoy the sport just the same. In honor of Patrick Reed’s win at The Masters (we loved his magenta shirt!), we decided to take a look at golf and taxes. Golf and taxes? Now that’s really spoiling the walk!
“The only times my prayers are never answered are on the golf course.” – Billy Graham
Most of us associate tax-exempt status with religious organizations or community service groups and charities, but both the PGA of America and the LPGA are tax-exempt. The new tax law passed in December had provisions in draft versions that would have revoked this status for sports leagues, but the final version allowed these organizations to remain tax-exempt. The National Hockey League and the United States Tennis Association would also have lost their tax-exempt status had the earlier versions of the law passed. Interestingly, the National Football League and Major League Baseball have voluntarily renounced tax-exempt status, while the National Basketball Association has never had it.
“The income tax has made liars out of more Americans than golf.” – Will Rogers
Wise taxpayers seek professional assistance to ensure they are maximizing their bottom line while complying with the complexities of the tax code; pro golfers certainly do so. Just as we discussed in our Super Bowl blog , professional athletes owe taxes to all of the states where they receive money during the year. In addition to being taxed on their prize winnings, some states require athletes to pro-rate their endorsement income according to the number of days they are in the state. Golfers who live outside the country are still subject to U.S. taxes on their winnings, and Americans who win tournaments abroad are subject to the same foreign tax issues faced by anyone with foreign income.
“Show me a man who is a good loser, and I’ll show you a man who is playing golf with his boss.” – James Murray
Golf outings have long been associated with business. However, the new tax law eliminated the popular fifty-percent deduction for business-related entertainment for everything but restaurant meals. In addition to losing the ability to deduct part of the cost of a round of golf, businesses can no longer write off concert tickets, tickets to sports events, or the cost of other social functions even if they serve a business purpose. While we can help you understand the new rules for business entertaining, we cannot advise you on whether you still need to let your boss win the next round of golf!
“I have a tip that can take five strokes off anyone’s game. It’s called an eraser.” – Arnold Palmer
We can’t offer you any tips for improving your golf game, but we can help you with any tax questions you may have. We’re open all year, so call us for any of your tax or accounting needs. And don’t forget to keep your head down when you swing, because as Phyllis Diller said, “The reason a pro tells you to keep your head down is so you can’t see him laughing.”