If you are an esports athlete who complete in Rocket League tournaments, even though you are not sitting behind the seat of a customized race car, you likely feel a thrill of exhilaration when you win. Rocket League tournaments, endorsements, and streaming revenue can be profitable. However, all of your winnings bring with them unique tax obligations. The more you know about Rocket League esports tax planning, bookkeeping, and accounting, the better equipped you may be to make sound financial decisions.
What Is a Statement of Cash flow? How Does It Impact Rocket League Esports Tax Planning?
A statement of cash flow is a tool used in esports bookkeeping to show how much cash goes in and out of a business during a set time interval. It will allow any esports athlete or their Rocket League esports CPA to see the amount of cash generated during the business's operating activities. It should show money made from investing and other financing activities. Much of the information an esports CPA records on the statement of cash flow comes from the balance sheet and income statements. The information generated on a statement of cash flow may be used by an esports accountant when determining an esports athletes' tax liability.
What Is Bookkeeping? How Is It Used by a Rocket League Esports Accountant?
Some people mistakenly believe that bookkeeping and tax planning are the same thing. Most accountants do not see it that way. Bookkeeping is recording transactions and journals, daybooks, or ledgers. Once the information has been recorded, an accountant can adjust entries and prepare financial statements and other reports. Tax planning is more focused on strategizing and understanding and applying complex tax codes. A large number of tax planning platforms may have blurred the lines of bookkeeping and tax planning. Someone who has little bookkeeping training may try to use tax planning software to create an invoice and manage ledger. This can then be used to generate financial statements. Does this mean that esports bookkeepers are obsolete? Absolutely not. Computers do an outstanding job at accurately and quickly processing information. However, bookkeeping/accounting software usually cannot tell you if transactions have been omitted, entered multiple times, or if incorrect accounts were used. Good bookkeeping and accounting should have a mixture of technology and human intervention. Here at Fusion CPA, we are a tech-forward accounting firm that offers esports CFO business advisory. Our accountants understand the role of using technology and human ingenuity to keep your bookkeeping, accounting, and tax planning accurate.
Examples of Transactions That May Appear in Your Bookkeeping
At the end of the day, bookkeeping is where you record your company’s financial transactions. One example of information that you will want recorded is items that you purchased with cash. You may travel for a tournament and purchase a meal or other items that are essential for your business that can later be deducted in cash. If these are not recorded and receipts kept, the deduction may be forgotten. You should also record the items you purchase with credit. You may get a credit card statement from the card-issuing company, but if you don’t record what purchase is connected to what job, things might quickly get out of control.
Charting Your Course For Success: Making the Most of Your Earnings
Esports tournaments, endorsements, and streaming revenue are on track to continue to grow. As your esports athlete career takes root, you may benefit from sound financial advice offered by esports financial advisers. Here at Fusion CPA, we work with esports athletes like yourself who are trying to turn their passion into a viable money-making business. We are here to help you identify ways to possibly minimize your tax liability and show you how changes to the structure of your business may allow you to keep more profit in your pocket. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.