914's and taxes, how do I write off my a/x car? Options

[Trekkor]

I "sponsor" myself. I have permanent advertising on the car for my business.

How do I legally write off my car as a business expense.
Or am I just entitled to the cost of the window banner?

What do the big sponsors do? (IMG:style_emoticons/default/confused24.gif)

KT

[scotty914]

trekkor contact me

and you have a pm

[anthony]

It sounds illegal to try and write off your hobby. Racing teams that get sponsorship are separate business entities. There's a contract with the sponsor which spells out the marketing/promotion deal. I don't think the sponsor ever directly owns the car or equipment.

[Rhodes71/914]

Set up your AX car as a seperate business then pay that business for the advert/marketing.* (IMG:style_emoticons/default/confused24.gif)




*Please consult a tax professional.

[Eric_Shea]

Paint it like a big terra-cotta floor and put your name on it in 12" letters. Average your expenses over the course of a year and pay a monthly advertising expense from your business account.

[Howard]

Make a billboard out of it. Blondes optional. Corp pays bills and entry fees.

[scotty914]

talked to retro74 (long lost member) who is a cpa

if you are not racing for profit IE it is a hobby the irs will slam you, if you have car business then the ax ing could be considered a business advertizing right off. like racer chris can right off some racing as testing, but tekkor has a tile business, no relation. he could sponsor a nascar team though

nough said

[Randal]

Set up a seperate company, change your name to Slliw Rokkert and hire Mr. T. to do your driving.

[Howard]

I guess there are lots of way of looking at this. My company sells car insurance, so that could be considered related, but we also sponsor several other things, and this is a relatively small expense. Certainly a close call, but I have never had advertising questioned by the IRS.

We have gotten business because of the motor sports agenda and the 914club. I'll bet Trekkor could say the same. The usual disclaimers apply: I don't work for the IRS, ya know (IMG:style_emoticons/default/rolleyes.gif)

[anthony]

If one works for themself I'm sure there are plenty of ways of not declaring income and cheating the government - like doing a job for cash, etc. Trying to declare your hobby as a business expense just sends up a big red flag to the IRS. If you are going to cheat then cheat so you don't get caught. My buddy who is self employed "cheats" by turning personal expenses into business expenses. For example, when his kid needs a new computer, the business buys a computer on the business' account.

[Howard]

Anthony, cheating? A bit harsh? (IMG:style_emoticons/default/blink.gif)

Maximizing after tax income is the goal of every company, so expensing as much as possible with pre tax dollars makes sense.

Getting your name in front of the public is the single most important thing a business must do. Advertising is the manure that makes a business grow, and I can sling BS with the best of them.

Oh, and visit my website for quote on your auto and home insurance. We represent Mercury, Progressive, and Hagerty for some of the lowest rates in California.

Saying that just in case Brad decides to charge a membership fee so I can pay it out of the company account as a write off. (IMG:style_emoticons/default/biggrin.gif)

[bryanthompson]

start a company, or have your wife(?) start one, hang a banner on the car, and run it in some parades...

That's what my boss is doing with his restored/hotrodded '50 Dodge

Edit: *doh* just re-read this... you already have a company.

[anthony]

I wasn't trying to be harsh. My dad was self employeed for 20 years so I know the way it works. It would have been hard to stay in business if he didn't maximize pre-tax business expenses and do as much on the side cash-work as he could. And he still paid a ton in personal and employee taxes. I'm not against maximizing those business expenses, I'm just saying to do it in a way that doesn't send up a big red flag.

[Trekkor]

Thanks for the input. (IMG:style_emoticons/default/clap56.gif)

Just FYI. I'm 100% above board and have no intention of ever cheating on my taxes.

I think the only *legal* write-off for me is the cost of the window banner, which is truly business advertising.

My company is paying for the car and parts. I need to talk to a CPA. Believe me, I do not want an audit. (IMG:style_emoticons/default/ohmy.gif)

KT

[ChrisFoley]

like racer chris can right off some racing as testing

I actually write off most of my racing expenses as advertising.
I can justify it pretty well based on my business being devoted to 914 custom parts and services, roll cage fab, exhaust systems, etc.
I meet with new and existing clients at the track on a regular basis.
Now I'm also getting into actually advertising for other companies on the car as well.

The IRS allows deductions for "ordinary and necessary expenses" related to a business activity, and it is up to the business to decide what is necessary for the most part.
A hobby business is allowed to write off up to as much as it earns, so a zero net income is fine, but losses can't be taken against other income.
I have always operated my business at a profit with no huge expenses that would raise a red flag, so I don't expect to ever see an IRS agent at my door. (IMG:style_emoticons/default/smile.gif)

[ChrisFoley]

Trekkor,
you may be able to write off the cost of travelling with the car to and from events as part of the advertising.

[Trekkor]

I always tow with my work truck and it has advertising on it, too.

I've had business conversation related to tile installation at the a/x's.

I always wear my company shirt, too.

Those IRS gentlemen are freaky, I'm told. (IMG:style_emoticons/default/unsure.gif)

KT