Just wanted to throw this idea out there and see if anyone has either done something similar, or has some knowledge that would help me determine if this is a good idea or not.
Here's a little background:
Some of you might know from videos and race reports I've posted that I race hillclimb at the professional level. We used to get paid in cash, but now everything is a lot more legit, so we are expected to pay taxes on our winnings. For the amount of racing I do it isn't much, maybe a couple thousand a year if I do really well, but it is expected to be claimed none the less. Someone in my family suggested that I maybe explore the idea of starting a LLC for my racing, which would allow me to more easily write off racing expenses and separate them from my regular taxes. Obviously this would not be considered my primary source of income, but something that is secondary and separate from my personal taxes.
The main thing that brought this about is I am in the market for a new van (likely a sprinter), and since it will be used quite a bit for riding and racing I don't think it would be unreasonable to use it as a tax write off. Under the LLC, I assume I would be able to track the mileage I put on it for business use (racing/practicing), and write off the depreciation and expenses (maintenance, etc.). I'm not in any way trying to pull anything shady off or stretch the law, I'd just like to take advantage of tax laws that may be in my favor. I can imagine for potential sponsors it might be a good selling point as well, since it shows a decent commitment level to racing.
Anyone done something similar or have any thoughts? Good idea, bad idea, not worth the hassle for the small amount of savings? I'm just throwing the idea out and will obviously be talking to a CPA if I decide to go ahead with it, but I just wanted some thoughts. I'm far from an expert on this and I'm just a dumb recent college grad who is learning the system, so go easy if I'm way off course here.
Make Hillclimb Great Again
Ratbeach Racing
Instagram / YouTube: @485Josh
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