No and I never even thought about it. But since you mentioned it, I'll ask my tax guy when I take my paperwork in this year. What the hell, it's worth a shot. Any money back toward racing is money well spent.
I don't have all the info, but here is what I do know; If you are running your operation as a legitimate registered business, you can. Though make sure that you HAD the opportunity to MAKE money. You don't have to, but the possibilty has to exist. You would have had to fill out a 1099 form as well. You must save every, and I mean EVERY bit of info and receipts related to your racing operation. Obviously anyone that runs a business knows all of these rules and laws anyway. Your best bet may be to ask JU or any of the other professional teams. If your not going that route then you can still claim racing as an expense. You can write off some of your racing expenses as a HOBBY as well. The IRS allows this, but as to what extent I am not sure. I believe there was an artical in RRW about this subject. You can get additional information from a good accountant, who is well versed in this area. Or the IRS. I wrote off my racing expenses for the 1994 tax year, when I competed in the WERA National Series. ( Money making op, class paying a purse, and contingency ) Just be very thorough,and know what applies to your specific situation.
I'm not a tax attourney, but I did spend the night at holiday inn once... A quick search of the IRS website finds that you can either A) Be a for-profit business, and operate as such or B) Be involved in a not-for-profit activity. In the case of B, you can make deductions not to exceed the amount of money you make while doing said activity. In effect, all it does it make it so guys like us don't have to pay taxes on any income made from the sport, such as the $250 here and there from a solo20 (or maybe more in the case of some of the continencies that pay cash). i.e. if you made, say $700 cash this year from winning stuff, you are allowed up to $700 in deductions. Sean - does WERA report solo20 winnings, and do you send us an earnings statement? http://www.irs.ustreas.gov/prod/forms_pubs/pubs/p5350104.htm - Roach
Yup, anything over $600 is 1099'd to you. Under $600 we don't need to report it to the IRS although I'm 99% you can still use it in your figuring without the paperwork. I'm also about 99% sure the OEM's 1099 you on any cash winnings over $600. When Brian (Lantz) was racing we did the schedule C and wrote off everything except about $1k and paid a small amount of tax.
1. Create a for-profit business. 2. Create a webpage or Yellow Pages Ad. 3. You MUST take in an income.(My FOR-PROFIT company buys and sells motorcycle parts, and provides, as a service, on-track & web advertising. ) 4. You may write off expenses against the gross income you received in step 3.(No income, no write-offs) 5. Have your employer or other companies give YOUR company money, in exchange for Advertising.(My yearly bonus is given to my company. This saves my Employer FICA taxes, too. You will have to pay taxes against it, but it doesn't count against your salary.) 6. Save receipts for travel costs. Hotel, food, gas, and write those off as business expenses. Every motorcycle part I buy is potential inventory, thus a business expense. Cell phones, Van Leases, etc all fit this bill as well. 7. Get a cpa. If you do this yourself, you'll screw it up, unless you have some financial wizardry background. Mine costs $150/year, which is written off too.
I agree with TSR about creating a FOR-PROFIT business. My general business owns many smaller things, which keeps things broad and confuses me a lot. We own our web design company, our motorsports effort (i.e. endurance team), and our ranch outside Nashville. Our Motorsports sells Wintex leather goods and will bring some carbon fiber GSXR parts out in 2001 for National events. 2001 will be our first year of trying to make everything go as a business and try to write things off. TSR: Do you have a separate bank account for your business? I have been looking for the best one around here, but haven't found one I like yet. [This message has been edited by vlwebdesigns (edited 01-09-2001).]
I didn't want anyone to get confused that my Non-Profit company, TSR, Inc., was somehow a money maker or writeoff for me. FWIW, my "For Profit" company name is TimeAlaps and Sporting Services.
The bottom line is that you can write off racing on your taxes, (keep receipts) as long as you are taking your personel or Business money to try and make additional income. There is no difference between gambling, or lottery tickets and they are used on taxes as well. I would suggest to find someone who has had interaction before with this type of tax refund and you should see some support. Your Number one Sponsor is the Goverment!
I used to own my own photography bussines. I was able to write everything off for 2 years. In either of those 2 years I never made a profit. I didn't make much reportable money either. This year ('00) I bought a domain name and am using that as a front....I mean business. It's a parts/service/set-up business. www.cornerspeedracing.com ALL of my racing expenses will ultimately be advertising and promotional costs...if everything works out.
Hammer: cute pic on the front page. Is it an actual photo, or made up? Let me know if I can help with business on the web. We are still getting the Moto-heaven.com site up and running. Most of the Wintex products are up, and we're getting the shopping cart program going now.
I am a CPA and would be glad to help anyone who needs me to do their tax returns. (For a fee of course). I need to make a lot of money fast, or I may have to sit out this racing season.
I've got 3 years of support, and I've tried to be as straight forward as possible. The biggest part is No Income, No Writeoffs. You can only writeoff against what was earned. You'll still have some out of pocket expenditures, it just helps take the edge off.
Yeah, it's an actual pic...I think. I found it on the web somewhere. I'll get in touch with you if I need any help with the website. Right now, it's just "billboard". But if it works out, I'll be needing some help. Shane
