Did you know that if you race you can deduct it from your taxes? I just found out and thought that I would let you guys , so if you want to know more please send me a IM.

 

Haha. What a lame statement bud.
You can't just "deduct it from your taxes". You will get caught one day. You must have a "reason" for the deductions. The reason it's really hard to "deduct" race car stuff from your taxes is because "John Nobody that owns his own flower shop deducts his racing from his business expenses". At least, LOTS of people used to do that, so the IRS cracked down on it.
You MUST have a reason for the deduction. If you are involved in the motorsports world, and that is how you make your living, it becomes much easier to deduct "race car stuff" from your taxes. If your living has nothing to do with motorsports, you must be very creative!

 

it is called the hobby tax law aand you have to fill out section 183, and you can only deduct up to that amount of earnings that you collected. if you want i will e-mail the tax law.

 

Right. Jeremy's point being that you had to actually make money by racing. The tax laws specify that you have to be in the hobby for profit. You can only deduct as much expense as you claim in income that resulted from that activity and then only if it is > 2% (or 3, I forget) of your total income. We all wish it was as easy as just writing off your racing expenses against your day job, but unfortunately it doesn't work that way.

- Scott

 

Why would I want to deduct it form my taxes??? We need new planes and guns dude, I am looking for less deductions

 

i can see that you dont own a business

 

From my understanding, you have to setup your racing "hobby" as a business with the intent to make a profit from it. I read a short article on it in the "Bottom Line". I'll see if I can find it.
Unless your a shop, then there are all sorts of loops that you can go through. It can be considered advertising, product testing and whatnot.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by drspeedy &raquo;</TD></TR><TR><TD CLASS="quote">i can see that you dont own a business</TD></TR></TABLE>

exaclty... independent contractor. Oh wait... I guess that is a business.

Smells like... Victory

 

well if you are a contractor then you are very giveing. reason being i lost a brother becaues of things going on in the middle east, but i am not here to talk poltics with a "contractor"

 

This site seemed to overview it pretty well:
http://www.kelanroycpa.com/krcpa/hobby_loss.htm


Also found this:

In determining whether an activity is engaged in for profit, greater weight is given to objective facts than to the taxpayer's mere statement of their intent. Some of the relevant factors that the IRS will look at when determining if an activity is engaged in for profit are:

1. Manner in which the taxpayer carries on the activity
2. The expertise of the taxpayer or his advisors
3. The time and effort expended by the taxpayer in carrying on the activity
4. Expectation that assets used in activity may appreciate in value
5. The success of the taxpayer in carrying on other similar or dissimilar activities.
6. The taxpayer's history of income or losses with respect to the activity
7. The cause of the losses
8. The amount of occasional profits, if any, which are earned
9. The financial status of the taxpayer
10. Elements of personal pleasure or recreation
11. Expectation of profit by the taxpayer

 

thanks for the link i am going to look at this more.

 

Yeah, it seems that if you set it up as an actual business with the purpose of making a profit, then "expenses" would be deductable. But it seems like a fine line and according the article "the IRS is craking down", so it would surely be a red-flag on their system. Would be nice to find someone who is actually doing this.

 

well i am curently looking into a race team to take over.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by drspeedy &raquo;</TD></TR><TR><TD CLASS="quote">well i am curently looking into a race team to take over.</TD></TR></TABLE>
?? You mean to sponser a race team or start a race team?

FYI: you sig link is not working correctly.

 

well kind-a of my friends has a race team that he his tired of dealing with so i am take it over. i dont need to find people to race or get equipment i am take al of it from him.

 

Helz yeah. Good luck with that!

 

thanks, but these two guys are perty good. one was third and the other was fifth. all they need is a little more power and some other mods