Expert: Shirley McAllister, CPP, PHR - 8/10/2011

Question
I actually have 2 questions: 1. Our club will be hosting a pro-am where we will be paying area pros to play a tournament with our members. We will be paying them between $150 and $200 to play. Do we need to send them W2's at the end of the year and if so, how do go about doing this (really 2 questions there)? 2. We are collecting money through company sponsors to pay for the event and to donate to a charity. What do we need to do so that the sponsors can write off the donation?

Thanks so much,
Gary

Answer
Hi Gary,

The pros you are paying will be paid only 150.00 or 200.00 for the entire event. They are not employees. Since it is less than 600.00 you do not need to send any type of tax document. If they were to make 600.00 or more you would send them a 1099.

In order for the sponsors to write off the donation you must be a non profit institution and registered as such. You than would only need to give them a receipt for their donation to the tournament. They would give the receipt to their tax accountant who would deduct it as a donation.

Shirley