Lesson Overview

Whether your club is a nonprofit or a for-profit business, this guide walks you through what to file, when to file it, and the most common (and costly) mistakes. This is basic overview to get you familiar with what is needed.

Tax Season for Nonprofit Wrestling Clubs.

Nonprofit wrestling clubs don’t pay income tax, but they are required to file an annual Form 990 with the IRS. This filing shows how your club earns income, spends on expenses, and manages money. Filing your 990 on time is part of keeping your nonprofit status active with the IRS. You must also issue 1099s for contractors (LLC’s) or anyone individual paid over $600. Be sure to file everything on time to avoid penalties or loss of your tax exemption.

Think of Form 990 as your nonprofit’s “financial report card” to the IRS and the public. If you don’t file for 3 years in a row, your nonprofit status is automatically revoked.

Source: File 990

990-EZ or 990-N can typically be done by basic book keeping while a full 990 should be done by a book-keeper and accountant. Non-profits with revenue over $250k (depending on state) must have a financial statement that is reviewed or audited by an independent CPA. Does your state require an independent audit?

  • Your fiscal year will determine your tax filing deadline. You must file 5 months after the conclusion of your fiscal year. For organizations run on a calendar year for their fiscal year, this deadline is May 15th.

Why would an organization NOT be run on a calendar year for their fiscal year? An organization may choose to modify their fiscal year away from the calendar year due to expense and revenue trends. For example, setting a fiscal year for September 1 so that all season based expenses fall in the same book keeping year (rather than being cut in half in January when the season is still in full swing.)

Before you file your 990, your Board of Directors or a trusted CPA should review it carefully. What should they look for?

Resources: 990-EZ vs 990-N: How to Tell the Difference + Other FAQs

Video: Which Form 990 Do I File?

Think of a 1099 as your club’s “payment receipt” to the IRS. It shows how much you paid each contractor so they can report that income on their own taxes, so the IRS can verify that the right amount of income is being claimed. If you pay coaches, clinicians, or service providers who are non employees (non employees are independent contractors or other self-employed individuals that are not considered employees of your business.), you must:

  • Collect a W-9 from them
  • File a 1099-NEC for each person you paid $600+
  • File by January 31 (Failure to file by January, 31 will result in a penalty.)

Resources: What Is an IRS 1099 Form? Purpose and How To File

Tax Season for For-profit or For-good Entities.

Most for-profit wrestling clubs are set up as LLCs, which are usually “pass-through” businesses. That means the business itself doesn’t pay income taxes. Instead, the club’s profits flow through to you, and you report that income on your personal tax return. You’re required to track income and expenses, file Schedule C or issue K-1s depending on ownership, and submit 1099s for any contractors you pay.

 

Ownership  Type What You File
Single-member LLC Schedule C (with your personal 1040)
Multi-member LLC or S Corp Schedule K-1

Schedule C is a section of your personal tax return (Form 1040) where you report your business income and expenses.

  • File by April 15 (or extension deadline if extended)

Resources:

A Step-by-Step Guide to Filing Schedule C (Form 1040)

If your wrestling club has more than one owner, you’ll use Schedule K-1 to report each owner’s share of the business income. Think of a K-1 as each owner’s “profit report card.” Each shareholder’s share of income, gains, losses, deductions, and credits

The business files its main return:

Business Type Main Return Filed by the Business K-1 Version Used
Partnership / Multi-Owner LLC Form 1065 Schedule K-1 (Form 1065)
S Corporation Form 1120S Schedule K-1 (Form 1120S)
  • Create a K-1 for each owner/shareholder. Shows their share of: income, losses, deductions
  • Give each owner their K-1. They use it when filing their personal Form 1040.
  • File by March 15. This deadline is earlier than personal tax returns.

Tip: If your club has more than one owner, use a CPA. K-1s get technical fast, and mistakes can cause IRS letters and penalties.

Resources: How Do I Fill Out a Schedule K-1?

Think of a 1099 as your club’s “payment receipt” to the IRS. It shows how much you paid each contractor so they can report that income on their own taxes, so the IRS can verify that the right amount of income is being claimed. If you pay coaches, clinicians, or service providers who are non employees (non employees are independent contractors or other self-employed individuals that are not considered employees of your business.), you must:

  • Collect a W-9 from them
  • File a 1099-NEC for each person you paid $600+
  • File by January 31 (Failure to file by January, 31 will result in a penalty.)

Resources: What Is an IRS 1099 Form? Purpose and How To File

Pulling financial data from WrestlingIQ.

If your team is on WrestlingIQ, we want to make sure you know how and where to access the financial data you need for tax prep within the software. Here is a short YouTube video on how to retrieve financial data related to the revenue of your organization from WrestlingIQ for accounting and bookkeeping. This video will also show some short cuts to help your book keeping with QuickBooks reporting.

Conclusion

Our #1 recommendation is to hire an efficient and professional book keeper. A good book keeper for a organization with revenue between $50k and $200k per year should cost no more than $1,700 annually. This will be the best money you can spend for your program to have a less stressful tax season. Additionally, consult a trusted Certified Public Accountant (CPA) for filing your taxes. CPA’s are licensed accounting professional that can help your organization file taxes or give advice, a typical CPA tax preparation and filing for personal Schedule C, K-1 or other forms ranges between $1,500-2,500 per year.

This is not legal financial advice, please consult a trusted accountant or engage a book keeper to keep records for a smooth tax season.