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

[Julie Jordan]

Originally Posted by 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.

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.

[Rusty Davenport]

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

[Lou SG2340]

Originally Posted by Ed Wright

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

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

[BIZMANRACING]

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.

[Julie Jordan]

Originally Posted by BIZMANRACING

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.

"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.

[Jack Matyas]

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

[BIZMANRACING]

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.

[Mike Meier]

Originally Posted by Jack Matyas

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

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 ***.

[Julie Jordan]

Originally Posted by Jack Matyas

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

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.

[G Schenck]

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