BLK02WS6

iTrader: (2)

Not really a tech question, but didn't know where else to get the right visibility. I got a tax slip from the track I race at showing that they reported to the IRS that I made money there. Can I write off any expenses for my car, or did I have to declare my racing ahead of time as a business? Anyone have any experience with this (Coach - any help)? Thanks ahead of time!

SilverGhost

iTrader: (53)

interesting, i didn't know they did that..was it bracket winnings or something?

good question to post up for sure.

MADMAN

iTrader: (4)

You need to set up a DBA or corporation. You need receipts for eveything you buy for the race car operation. Then you can right off the expenses. The best thing to do is talk to youraccountant and figure out the best way to handle it.

ApacheDrill

iTrader: (21)

Everything over 5000.00 has to be claimed on federal, not sure about state they are al different.. The Small Buisness is the way to go...

BLK02WS6

iTrader: (2)

Yeh, it was bracket racing. I didn't know they reported it either - first time I ever got a slip.

I usually do my own taxes, so I don't have an accountant. I figured you had to set up the small business ahead of time though - in other words, I can set it up this year and claim stuff at the end of the year, but I don't think I can set it up now and claim last year. I'll have to check into it further.

I was just hoping someone who bracket races regularly could tell me if they knew.

ApacheDrill

iTrader: (21)

Is it more then 5000.00? Can you prove where you paid out more then 5000.00 in profit? I am setting up mine this year for the tax benifits regardles.. Hope that helped

BLK02WS6

iTrader: (2)

It was far less than $5000 that I made - someone told me that since I had any income at all, I could write off expenses. The expenses would be way high since I put my engine in during 04 and I have plenty of receipts for probably around $8000 total. I don't think I can do it though, since I didn't set up a business during last year - I didn't know they were going to report it.

ApacheDrill

iTrader: (21)

I wouldnt claim it then if its less then 5000.00 you can see the benifits of turning racing into a small buisnees though..

Fireball

iTrader: (21)

schedule C it. Don't have to show a profit for several years

Just be careful...schedule C's are usually a red flag for Audits

ApacheDrill

iTrader: (21)

Most small buisness average a loss of 8000.00 a year. What i didnt know is that you can claim insurance, maintenance, parts and your car note..

GeorgeC

I don't know all the details, but I think you can claim the income from the track under "hobby income," and also be able to write off the corresponding amount. That way you don't have to go through the trouble of setting up an actual business.

Might be worth the effort to have a pro do your taxes (I think most places only charge about $75 or so).

lilone

If you incorporate you can write your tow vehicle off as well and get it insured as a business vehicle. Just something to think about. I will be incorporating this spring so I can write off the 10k plus I will probably spend on the car this year. Plus the cost of my truck and the insurance on both.

kp

iTrader: (34)

Problem with 'hobby' expense is you can only write off as much as you win. And that has to exceed 2% of your gross adjusted income. So if you win 1000.00 you can write off 1000.00 of your expenses if you make 50k a year in your 'real' job. its not going to make a huge difference in total tax.

Like George said see an accountant if you want to start a business and write your race car stuff off, some people wont benefit at all, some will..