NHRA Team/Driver And Tax Time Wonder

[Rat]

Since it is tax time, I happened to wonder how does a race team, or let alone a driver file taxes running the full 24 event tour?

 

[You!]

Online or with their tax preparer of choice, like any other mere mortal. There aren't 24 events in April.

 

[Race Fan]

WAIT, WAIT, WAIT, . So what your saying is they are human like the rest of us... WHAT !?!

 

[Rat]

Let me expand on that: I was wondering how they would have to file, typically like any of us or do they have to file a return every state that they run an event in? This question is never covered, so I guess why not ask it. Do they apply to the same tax situations as we may? Probably not.

 

[None]

Let me expand on that: I was wondering how they would have to file, typically like any of us or do they have to file a return every state that they run an event in? This question is never covered, so I guess why not ask it. Do they apply to the same tax situations as we may? Probably not.

I don't know if all the states make them file yet. They were working on it. The way it was some states made you file on what you made within their borders. I know all the states with income tax were trying pass laws to collect. NFL, NBA. MLB MLS, NHRA, IHRA, and any other traveling circus would be targets.

 

[Professional Fan]

Generally you have to file a state return in every state you earned money which would require the drivers (and crew) to pay taxes in each state an event was held. However, states can reach agreements with organizations to allow a composite return to be filed in that state. For example, I was a Partner in an accounting firm that had offices in virtually every state. My firm could include me in one composite return filed for each state or I could elect out of the composite return and file individual returns in each state we did business in. I elected in be included in the composite returns but had to file individually in my state of residence-California. Most states allow a credit on the resident return for taxes paid to other states. However, for the drivers and crew I don't know how that would work as they are paid by different team owners, not by one organization-i.e. NHRA.

 

[FABMAN]

Don't all race winnings come from NHRA from Glendora and payment to team personal come from team owners from where they are base at like Indianapolis. If so that would simplify things for tax purposes. Just a thought.

 

[Rat]

Thanks for some real answers and all money coming from Glendora actually may be the answer to the entire post.

 

[MM]

Crew guys are paid by the teams so they'd have to file wherever the teams is based. I had to file a New York state tax return this year from working for Bartone last year.

 

[Jeff]

You generally have to be in the state for a certain number of days to be a tax resident. Practically they all probably have a filing obligation, but the state only pursues the larger organizations (NFL) and large earners (Jimmy Buffet, etc.) Generally I believe the tracks are on the hook for all of the purses....

 

[Toejam]

I'm curious if racers can write off losses every year? Or is there a limit?

 

[SoCal Racer]

I suspect it's like any other business where a profit has to be shown for every so many years in business. For example sole proprietorships are 2 in every 5 (in CA anyhow)