tax deductable

[frskbm1]

is there a way to make it a buisness and deduct everthing? i spend ALL my $$ on racing. mike in worcester ma lrrs/ccs#517

[Super Dave]

Yes, make it a business, and your expenses are deductable.  Eventually, your accountant will look at you funny if the IRS doesn't first.  Well, a good accountant will probably look at you funny when you say it's a business with so little income and do many expenses.

Start by talking with your tax accountant. 

[smite1]

Good luck with all that!

I had a legitimate business and got audited by the IRS for office, car and other business related expenses and they were all denied.  All I can say is get a good tax attorney before you go down this path.   Ask them who pays any penalties and interest if the advice they give you is bad.

[Eric Kelcher]

Yes it is a fine line, A sponsor can deduct the money they give a racer for their program as business advertising but even that has limits.

As a racer you can offset the taxes on earnings by the race expenses for those earnings and if your sponsor claims you as a business expense on thier taxes you can expect a 1099 from them for your "earnings" that you have to account for either with expenses or pay taxes on.

The gov't is going to get their money somehow

Granted last time I ran a race team was 7 years ago and had my own business that was my biggest single sponsor, I have not seen anything to indicate the rules/laws/taxes have changed significantly.

Best tax deal I found was that the fuel used not on highway is eligible for the highway taxes to be refunded. At the time this amounted to 28 cents a gallon. At the time I was only using gas for off highway equipment, lawnmower, Roadracing, MX, and boat, This amounted to couple hundred dollars a year in tax refund but it was a real PITA and I gave up keeping the reciepts.

[tzracer]

To qualify as a business, rather than a hobby, you need to make money something like 3 out of the first 5 years (http://www.irs.gov/publications/p535/ch01.html). If you are not making a significant amount of money racing (do you receive a 1099?), don't bother.

[Toves33]

Sounds more of a pain in the a$$ than anything. If you figure out a legal way of doing this, please let us all know. What will be the business? Selling t-shirts or parts?

[Court Jester]

To qualify as a business, rather than a hobby, you need to make money something like 3 out of the first 5 years (http://www.irs.gov/publications/p535/ch01.html). If you are not making a significant amount of money racing (do you receive a 1099?), don't bother.

so from that stand point, a person could do it for 2 years then fold. right?

[tzracer]

You would have to claim some income, a 1099 would help. Without much income you could probably expect an audit.

[Scooter969]

so from that stand point, a person could do it for 2 years then fold. right?

Yes, as long as you try and show a profit. Entering races, pay outs, contingencies, t-shirt and sticker sales, advertising space on your trailer, truck or bike. But with the cost of fuel and equipment, profits will be small.

[plasticweld]

All of my expenses are deducted, from entry fees to the gate to fuel and parts, I sell body work at the track and paint, I also sponsor a few other riders. I checked with my accountant before I did anything. I do run  a full time motorcycle business but only part of it is race related. Going to the track has been good for business, the trick would be for you to find something to do or sell to other riders and claim all of the income. You do not have to make a profit to claim a deduction, I was in business for 5 years before I really
got above the poverty level you would have to be pretty good to actually come close to breaking even or even losing money if you based it on contingencies