Can my artist business sponsor me as a disc golf athlete and write off tournament fees? Or is that taxable income?

Thanks for the detailed explanation! Do you think having my logo on clothing/equipment and taking photos at tournaments to post on my business social media would be enough to establish business purpose? Also, would I need to create some kind of formal sponsorship agreement with myself, or is that getting too ridiculous?

Having your logo prominently displayed on clothing/equipment and documenting this with photos would definitely help establish business purpose. Posting tournament content on your business social media strengthens the marketing connection, especially if you can track engagement or inquiries that result from this visibility. A formal sponsorship agreement might sound silly since it's just you, but it's actually a smart move. Creating a written document outlining the terms (what your business provides and what you as a player will do to promote the business) establishes intent and creates documentation if questioned. Keep it professional - specify required tournament participation, branding requirements, and promotional activities expected.

How accurate is this AI compared to a human accountant? I'm skeptical about trusting algorithms with something as complicated as business vs hobby determinations. Does it actually understand the specific rules for different industries?

I've been looking at using AI for my taxes too. Does it help create the documentation you'd need if you got audited? Like would it help create that sponsorship agreement the other commenter mentioned?

It's surprisingly accurate for these specific tax questions. I compared its advice with what my accountant told me and it was spot on. It doesn't just apply generic rules - it understands context like industry-specific deductions and the business/hobby distinction tests the IRS uses. Yes, it actually does help with audit documentation. It suggested specific types of records I should keep and even helped me draft a sponsorship agreement for my situation. It outlined exactly what elements needed to be included to show legitimate business purpose versus personal hobby. The documentation templates alone were worth it for me.

Wait, how does this actually work? Does this service just call the IRS for you? I'm confused why you couldn't just call yourself?

Sounds like a scam tbh. No way some random service can get through to the IRS faster than I can myself. The IRS phone system is just broken for everyone.

The service uses an automated system that navigates the IRS phone tree and stays on hold for you until an agent is available. Then it calls you to connect with the agent once they're on the line. It's not magic - just technology handling the frustrating waiting part. No scam at all - they just figured out how to efficiently work with the IRS phone system. Think of it like those restaurant apps that hold your place in line and text you when your table is ready. The IRS phone system is absolutely broken for individual callers - I wasted hours getting disconnected or waiting on hold. This just solved that specific problem for me.

Good point! Did you find that you needed different documentation for state vs federal? My state seems even pickier than the IRS about business/hobby distinctions.

Yes, I definitely needed more specific documentation for my state return. My state required me to show a more direct connection between competition participation and actual business revenue. I had to keep a log of new clients who mentioned seeing me compete or found me through competition networking. The state auditor also wanted to see that I was treating the activity consistently as a business on all fronts - separate business accounts for these expenses, formal marketing plans including competitions, and proof that I approached competitions differently than a hobbyist would. It was much more detailed than what the federal documentation required.

That's a really good idea, I hadn't thought about structuring it that way. So basically my business would directly pay the tournament fees and expenses rather than "giving me money" that I then use for tournaments. That seems cleaner from a documentation standpoint. Is your friend's face/name/image used in the business's marketing materials? I'm trying to figure out if I need to create more separation between "me the artist" and "me the player" for this to work properly.