Taxes?

[keeks]

Funny how it is classified as a hobby when it helps your bottom line, but when your hobby starts bringing in some cash, well, you know, that's different. Crooks.

[cjsracing]

If you are set up as a Single Member LLC, in other words you are the only owner, the IRS treats your business as a disregarded entity and you put your income/expenses on form 1040 Schedule C. Claiming losses year after year on a Schedule C is a big red flag.

What you could do is setup a LLC Partnership or an S-Corp. By doing this the Business Files it's own tax return either a Form 1165 or Form 1120S. Each partner gets a K-1 that shows the partners share of the profit/loss in the Company. This information then gets entered on your personal Form 1040. This is less likely to be a red flag, plus if the IRS inquires about your personal taxes the K-1 is your proof. Most of the time if the IRS inquires of your personal taxes and you show them the K-1 they will be satisfied. If you don't have a K-1 and file with a Schedule C all your income/expenses are right there for them to look at and they will. Also, you should try to run it as a Business, by this I mean get a Federal ID #, separate bank accounts, issue 1099's if you pay someone more than $600 for services, etc.

[stock car driver]

If you are set up as a Single Member LLC, in other words you are the only owner, the IRS treats your business as a disregarded entity and you put your income/expenses on form 1040 Schedule C. Claiming losses year after year on a Schedule C is a big red flag.

What you could do is setup a LLC Partnership or an S-Corp. By doing this the Business Files it's own tax return either a Form 1165 or Form 1120S. Each partner gets a K-1 that shows the partners share of the profit/loss in the Company. This information then gets entered on your personal Form 1040. This is less likely to be a red flag, plus if the IRS inquires about your personal taxes the K-1 is your proof. Most of the time if the IRS inquires of your personal taxes and you show them the K-1 they will be satisfied. If you don't have a K-1 and file with a Schedule C all your income/expenses are right there for them to look at and they will. Also, you should try to run it as a Business, by this I mean get a Federal ID #, separate bank accounts, issue 1099's if you pay someone more than $600 for services, etc.

I dont have a loss every year, I didn't quit my 57k a year job to be poor

[cjsracing]

stock car driver - I wasn't specifically responding to you. I was more speaking in general terms. If you specifically have any questions seek me out at Stuart when the Late Models are there.

[let-r-eat]

Every situation is different. Using racing for advertising can be tricky. What happens when you go race in Florida or another state and your business is "mail delivery" or "muffler shop" that caters only to a dedicated route or local customers that are already defined? You're an insurance business with a territory and you race outside that territory and deduct those expenses? An effective auditor will find out.I would suggest seeking a professional *CPA* (not some quack and there are lots of them out there) and describing your situation to them and not get mad when they tell you your racing is likely a hobby. There are SOME exceptions but NOT many. Take this from my experience as I use to do 1000+ tax returns every year. There is a ton of (not a nice word)(not a nice word)(not a nice word)(not a nice word) that people are doing that won't stand water at the IRS hearing.

[samgood]

I wouldn't ever arrange my taxes without assistance of my accountant, I can't even imagine myself filling all those blanks. I'd like to learn how turbotax is working, these contacts https://turbotax.pissedconsumer.com/...r-service.html must be rather helpful.

[Knowitall93w]

A good donation is to onlyfans.com/bad.bunny169

[sommerz10k]

In the end he paid about 10k back but had deducted much more than that over the years so he was still way ahead but it was a major headache for quite some time.