Sponcer money..... 1099 ????

[BIZMANRACING]

i have a question and i figure if someone knows the answer would be in this forum.

no i'm never really going to get sponcer money, i'm not that lucky and i will not put the effort in to ask for it. frankly, i don't have the time. and that is part of my question.

i am a finance manager for a car dealership. part of my income comes from the venders that i do business with. if i use a certain bank for loans or sale certain products i would get a check at the end of the month, a"kick back" if you will. then at the end of the year a 1099.. now that check i get is currently is" pay to the order of my name". but, my "handler" says that he gives checks to "abc auto group" or high finance llc. or what ever i they tell him to make it out to. so with that thought in mine, could i look at these 1099' s as "sponcer dollars" and write off some expenses from racing after all who is to know what they are for. just another self employed event NO?

for those of you who get sponcer money, how does the company indentify to the IRS that you got that money. is it a 1099, or is it something else? and how do you advise the IRS of your actions for that money?

does anybody know? also would i then have to file a separte tax return as "abc auto group" or could i include it as my own money???

hard topic. but if i can write off some money it would help me out alot.

PM me if you think thats a better way of telling me. thanks

[Rich67stang]

I opened a S corporation back in 1996 when I first got started/sponsored. The checks are made out to the
business as such and you are allowed operating expenses for that corporation. Keep in mind that at the end of the year you must file a corp. tax return besides your personal, but if the corporation shows/has a loss it is reflected on your personal tax return. Hope this helps.



Rich67stang

[Julie Jordan]

If you receive over $600 in non-employee compensation the payor should issue you a 1099.

Combining income from one occupation (finance) with expenses of another (racing) will not fly under audit. Whether you get audited or not is the million dollar question. So how brave are you?

[Ed Wright]

Originally Posted by Julie Jordan

If you receive over $600 in non-employee compensation the payor should issue you a 1099.

Combining income from one occupation (finance) with expenses of another (racing) will not fly under audit. Whether you get audited or not is the million dollar question. So how brave are you?

I don't think they will buy the corp loosing money every year either, will they?

[Julie Jordan]

More than likely, not. But it all depends on if you get pulled for an audit or not.

[Jack Matyas]

Carlos -- I've been in the automobile business all of my adult life and I can tell you there's only one way to handle this income in the IRS's eyes -- pay the tax - period -- no and's -- if 's or but's about it ! ! ! !

[Regan Wilson]

So from what I read do I need my sponsor to give me a 1099 at the end of the year ? By years end I will have recieved around 2500 dollars . I figured that I would have to show it as income and have copies of all the checks .

[Julie Jordan]

Originally Posted by Regan Wilson

So from what I read do I need my sponsor to give me a 1099 at the end of the year ? By years end I will have recieved around 2500 dollars . I figured that I would have to show it as income and have copies of all the checks .

Technically, you are supposed to report all income regardless of whether you received a 1099 or not.

[Philip Saran]

Maybe things have changed some over the years, but in the early 80's
when I ran a I/SA 340 Duster, I claimed the car/truck/expenses on my
tax's and did write off what I had spent and depriciated the cost of the
truck I used as a tow vehicle.

I did get audited the first year, but the only item they questioned was
how I had come up with the value of the truck. I had to have a form
filled out by the used car manager where I worked as a service writer
at the time and turned that back into the IRS, that value was higher
that what I had even claimed in the first place.

That was my experience, your's may differ.

Always best to talk with your tax person, and if you do NOT have a
tax person then I would highly recommend you contact Jordan & Jordan
CPA's in Modesto CA for help. Just ask for Julie.

[Tim Kish]

Question most likely for Julie -

My understanding is sponsorship dollars be handled different ways. 1) Sponsor dollars are entered as income, 1099 is required and income tax is applied. 2) Your racing "business" sells a product (advertising signage). then wouldn't the sponsor dollar be purchasing product for which you would be required (with license) to pay only sales tax on? Option 2 to me seems the most legitimate as the race car / trailer is a traveling billboard (see DOT regulations fore business use of trailer - whole seperate issue) so you are selling a product, not just receiving income.