Sponcer money..... 1099 ????
 

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

Re: Sponcer money..... 1099 ????
 

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

Re: Sponcer money..... 1099 ????
 

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?

Re: Sponcer money..... 1099 ????
 

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

Re: Sponcer money..... 1099 ????
 

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

Re: Sponcer money..... 1099 ????
 

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 ! ! ! !

Re: Sponcer money..... 1099 ????
 

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 .

Re: Sponcer money..... 1099 ????
 

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

Re: Sponcer money..... 1099 ????
 

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.

Re: Sponcer money..... 1099 ????
 

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.

Re: Sponcer money..... 1099 ????
 

1. Sponsor dollars is income, reportable whether you receive a 1099 or not. Depending on your personal tax situation the income will either be reported as hobby income or as business income. The type of reporting determines how your expenses are deducted.

2. You are not selling a product. A product means you are selling something tangible. But whether it's a product or service it's all income. Sales tax varies depending on locale. In California, the sponsor dollars would not be subject to sales tax.

Re: Sponcer money..... 1099 ????
 

Sponcer money ???? is that what you pay extra to get spanked ????

Re: Sponcer money..... 1099 ????
 

I ran my racing as a S Corp for 10 yrs. Showed a loss every year, never a problem. IRS has cracked down on S Corps that do not show SS taxes being paid. I swiched to a LLC this year

Re: Sponcer money..... 1099 ????
 

julie

you seem to be the expert on this topic. or should i say you come from a position of strength since it appears to be your "day job" profession.

thus, can this be done.

i open up an llc corp. i'll call it "kiss my irs". as the owner of this corperation i will sell out of my garage to other racers, and construction workers, drs lawyers etc. the software to print tech cards lets say from our racing lap-tops that we keeep in our trailor. now lets say that i am a terrible sales-person (not-true) and i only sell 5. now thats whats real and lets say the profit is 1000. now lets say that i tell my venders (from my day job) to make my checks out to "kiss my irs" instead of to me personally. so now i'm actually depositing money into my business account, that i actually earned at my "day job". but, who really knows? now lets say thats 2000 a month so for the year i made 25,000 in my company "kiss my irs"

now from this company, my expences were this and that, and as adverticing i ran a race car since my product that i sale is a "racing product" then there is the depression of the tow vehicle, rent on my garage, a phone and so on. and did i mension that i blew the motor up which was lets say 8000 that my sponcer picked up, i paid the rest from my personal money. and after it was said and done. the company was in the black lets say 5000.

so, does that mean that i will file a corp taxes on that profit.

and is there anything wrong with the explaination above. if i win anything the owner is the businesss so they would file it as winning/ income. so can i pay myself as a driver say 25% and count that as income for my "personal taxes".

thanks for the help. this topic is so hard to figure out.

Re: Sponcer money..... 1099 ????
 

"Technically" what your are proposing is not correct. Income and expenses are to be allocated to each separate venture, not combined. What you can get away with, who knows? Depends on (1) if you get audited and (2) how detailed your auditor is.

Re: Sponcer money..... 1099 ????
 

Julie -- Soon we'll take up a collection for Bizman so we may send him cigarettes while he's at Levinworth......

Re: Sponcer money..... 1099 ????
 

thanks jack.....lol. after 20 years in the navy, or as they say 20 years of undected crime i never made to the big house in kansas, or was i just lucky. maybe this venture will get me in the jail......lol.

julie i'm missing something. (big surprise) my major need is to get that 1099 from my vendor drafted to my business in lieu of to me. why can't i do that? unless sponcers give money to racers and have no requirement to show an accounting for it. that doesn't seem right. whats to keep the racer from mixing sponcer funds with his owe?

anyway, this whole business thing is to reduce my total tax base. i'm tired of giving a ton of money to the irs. and besides i am planing on opeing up a business, i have taken steps for that. in time i guess i would be saling race trailers as well as some of the things that go inside the trailer. but, to start i'd be saling out of my basement, and in time i would purchase or rent some real estate and put trailors on the lot. i would still keep my day job at least for awhile, and hire someone to run it. its just not going to happen from the get go. since when and if i give up my day job those vender checks would stop.

so please check again. i may have my wording wrong, or skipping a step in my explaination. but, it seems that it could happen. i rather pay business tax on 25,000 instead of my income plus my wifes and the 25,0000. oh and i also get a penison from the navy. frankly the pension i get from the navy is what i pay in extra taxes every single f&*$*ken year.

so please get me close. if not i guess its back to the drawing board.

by the way jack. what do you do in the car business down in A.C.

Re: Sponcer money..... 1099 ????
 

On a funny side note, I'm an auditor, and my territory just happens to cover East Brunswick, NJ (as noted on the sidebar under Bizman's name). I think what he is trying to accomplish is giving people like me a headache. And I'm known to be a bit of a pain in the ***.

Re: Sponcer money..... 1099 ????
 

I agree. Like I said, income and expenses from separate businesses are to be reported SEPARATELY. You should consult your own tax advisor on how you can try to circumvent the rules.

Re: Sponcer money..... 1099 ????
 

I would like to take a poll at Indy , to find out how many toters and stackers are run through the racer's normal business. Let's keep this on the down low from the IRS because I am on the top of their list.

Greg

Re: Sponcer money..... 1099 ????
 

hi mike

lets not get to excited about this....lol.

sorry for the headache. all in good fun right.......

Re: Sponcer money..... 1099 ????
 

Well lucky for you I work for an insurance company, not the IRS or the State....lol. Though I would have liked to see the look on your face when you read my post.

Re: Sponcer money..... 1099 ????
 

LOL

i figured something like that....lol. i just knew that irs guys "probally" did race. but, yes mission accomplished you would of rolled over on the ground laughing had you seen my face.

i still wish something out of this. but, no i will not do something stupid. life is good, who needs jail or come face to face with the irs agent.

Re: Sponcer money..... 1099 ????
 

Julie, I liked that wording. It's like what some racers do to the rule book.

Greg

Re: Sponcer money..... 1099 ????
 

Carlos

What you are asking is a gray area. Having been self employed for over 20 years there is plenty of that to explore. Some of those will get you into a big bill with the IRS and State of NJ. And they do not play well!!

What you are thinking of is a way to avoid paying income tax on a bonus. If it is in the form of a check and there is an audit, the issuer of the check is going to state the truth. The check can be written out to your wife, kid, company, what ever but it was written as a bonus for you selling their product. If you are unlucky it could be expensive.

Look at Al Sharpton. A major public figure in NYC, NY State and at some level nationally. Doesn't pay taxes to the IRS for several years. Gets audited, goes to court and settles for much less than owed. His method works great if you owe enough that the savings minus the cost of accountants and attorneys is a profit. (although he could afford it)
A public figure getting press over this cannot be the only plus.

Can you stomach handle it! How big are your family jewels?

The best advise is to search out a good accountant with integrity. A former IRS auditor or someone who has had a lot of exposure to audits and auditors would be good.

;)Hey you can always do what you please and answer for it later! Play dumb and deal with the phone calls. paper work, threats, public embarrassment and fines. Hell you can be another one of those who the IRS ripped off!! :eek:

Just kidding! What you are describing is not a good idea!
Jack has been around for years and knows the ins and outs!
Julie does not give out bad advice!

Re: Sponcer money..... 1099 ????
 

O.K. i surrender.

everything you say is correct frank. reading your words hit home pretty hard. "avoid paying taxes on a bonus" the other thing that you said was that if they ask the issuer of the check what it was for, the truth will be known. so unless., i can get him to lie, or modify the truth, i guess i'm asking for trouble.

as for the size of "my stones" i've been here before. back in the day when i got divorced, i was just so dambed depressed i didn't pay taxes for 5 years. try that one on. once i took steps to correct, i got retainer information of 25,000, plus the taxes i would have to pay. i was ready to jump off a building and call it quits. a friend turned me on to an accoulant that i used for years. he got me off paying just a few thousand dollars. biggest load ever to get off my back. for years he made my money disappear. the friend that turned me on to him stopped using him since he was afarid it would come back and bite him. it never did. but, his new accountant the next year, he owed the irs like 15,000. that didn't stop me i countinued to use him. then i got remarried.

now my wife does our taxes, being the daughter of a police officer, i was never going to get away with it again. now i to pay every single year. i made it so i guess i owe it. but, i'm not allone in this boat. i'm 12 years away from early retirement so maybe its time to buy that house in florida, or if i'm still in the car business i'll go back to my beloved south carolina. charleston was a great place to live in the early 80's and they don't sell cars on sunday, or at least they didn't. but, something got to give. i didn't give 20 years of my life defening freedom in the heart of the cold war to get a pension, just to give it all back because i make to much. thats just bull**** in my eyes. or maybe i'm just selfish. in any case i need some tax help here. since when i retire, the governement isn't going to give it back to me.

thanks for letting me use your forum for this, i'm done venting. BACK TO THE DRAWING BOARD