[mitchntx]

OK ... I think I have all the elements in place to call my racing a business.

I have been reluctant in the past because in CMC there is no prize money and therefore no attempt at income.

But now that I have landed this Texas Driving Experience driver/instructor gig, there is my avenue for income.

It is my undersanding that all expenditures that I incur to help me in my driver/instructor role can be deducted.

All my safety gear is obvious ... suit, helmet, gloves, underwear, shoes ...

But what about the CMC car itself? Could I not contend that without the car, I would have never gotten the job? And to increase or maintain my skill level, I must continue my education as a driver ... enroll in CMC hands on "seminars" ... al of which is deductible ...

Right now, I am being paid via a 1099 and as an individual. Should I set up a sole proprietership and have TDE pay the SP? Could I, as an individual, support that SP from my regular income and get a tax break that way?

What about my shop where I build and maintain the car(s) ... how would that figure into the equation?

[rmackintosh]

I would look into setting up an S-corporation.

The tax rules do specify that the business must be run as a bona-fide "for profit" enterprise for expenses to be deductible. In other words, hobbies don't count. One of the litmus test "rules of thumb" is that a for-profit business must be profitable at least 3 out of 5 years. Obviously that is not a hard rule in and of itself or a lot of big corporations would be closed by now, but it's an important part of demonstrating that you really are running a business and not deducting a hobby.

Of course, it's up to you to decide what is paid by the business and what must be provided by the "employee", so it's not hard to turn a "profit".

...what he said...

For me...I have thought about it many a time...but with a CPA wife....she shuts me down EVERY TIME....not worth it for her/the few dollars one could get out of it.... (IMG:http://www.frrax.com/rrforum/style_emoticons/default/rolleyes.gif)