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Gettin Jiggy Wit It
Posts: 2734
   
| Ok for the last two years I've had quite of few 1099 Mics incomes to report from winnings. I had enough winnings that if I reported them as just a hobby I would have to pay in a ton, like a few thousand, even after the hobby loss deduction. It is ridiculous because obviously I rely on that money and it goes right back into the horses. So being taxed even more on it like I said is ridiculous. I decided to treat my barrel racing like a business and fill out a schedule C so I could deduct gas and entry fees. Obviously a few thousand or more in winnings is nothing compared to what we spend on horses so I showed a loss. I filed like this for a 2 years because my winnings were significant in that period. Well here I am the third year and my horse was out for the summer due to an injury and I have a ton of vet bills. I ran my older horse and he acquired me to win enough to get a 1099 misc. I started my taxes last night. I am scared about filling my winnings and dedicating gas and entry fees because it will be a loss again. 3 years in a row. I am scared I'll get audited. This year I was going to file the 1099 misc as a hobby but I'll have to pay in over 300! What a crock. I talked to a few friends and they said their 1099s get zeroed out each year. Problem is they couldn't explain to me how that worked. I'm really frustrated because like most horse people do, we loose money hobby or not, and the government wants more of it after its already spent.... On my horses. So my question is what do you do with your 1099s from the show producers where you won money? Do you take the loss and pay in by filing it as a hobby? And even though you do, you still have to pay in on it? Or file as a business to deduct entry fees and gas to hopefully zero out the winnings as a loss? Or is there another way?!?!?! Thanks! |
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 Miss Laundry Misshap
Posts: 5271
| I would like to know if you even have to put in the 1099 if you don't claim your horses at all. |
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 Am I really the Weirdo?
Posts: 11181
Location: Kansas | I claimed horses as a business for a couple years when I didn't have a full time job, but haven't done it since I started teaching full time.
This year is going to really bite because I won $3000 at a rodeo finals and also have a 1099 coming from the Barrel Bash & Bonus Race Finals company. My plan is to prep my taxes with the horses as a hobby and then wait to file until I have saved up the money that I'll probably owe. UGH. |
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Extreme Veteran
Posts: 333
| This is my understanding:
Hobby income - say its $5000
Expenses - $5000
Zero income and zero loss.
But, i've heard you can only claim it up to 2% of your income...this part i'm not sure about.
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 Expert
Posts: 2097
Location: Deep South | This is where a knowledgeable accountant is really worth their salt.
For 7 years my parents claimed our horses and rodeoing and all that as a "farm business." They were able to deduct everyyything. Gas, mileage, entry fees, training expenses, farrier, feed, anything remotely horse related. They reported a loss every single year. They were audited 3 times, but just had to take in their receipts/paperwork/everything they had kept for backup to their accountant and they handled everything. Came out perfectly fine each time. |
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 The One
Posts: 7997
Location: South Georgia | It makes me so nervous whenever I hear of someone doing a tax return filing themselves. There is no way we can know all of those tax codes and their intricacies each and every year. Let the pros handle it! Plus, that way they are responsible for any errors, as long as you have provided them accurate information. I pay about $250 for my accountant (I have normal source of employment, I itemize, and I have a rental property) to file my return and it is totally worth it. Plus, once I gather the paperwork and documentation, it only takes sitting down with her for about an hour to get it all done...and I'm ensured that it is done right. Just my two cents. |
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Expert
Posts: 2531
Location: WI | You might want to talk to a tax accountant.
I got 1099'd this year, but waiting on my W2's to start filing, so I'm not sure how it will work out yet. |
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Gettin Jiggy Wit It
Posts: 2734
| powerstroke power - 2018-01-10 12:39 PMThis is my understanding:Hobby income - say its $5000Expenses - $5000Zero income and zero loss. But, i've heard you can only claim it up to 2% of your income...this part i'm not sure about. it doesn't work exactly as that. I wish and that is what I originally thought. You have to take 2% and multiply it by your regular job adjusted gross income w2 then subtract that number from the winnings from the hobby. Thst number is the maximum amount you can deduct from the winnings with the hobby loss deduction. So If a person makes 40,000 you multiply that by 2% and get 800. Then subtract the 800 from the winnings from the hobby. So like if the 1099 was 1200 I'd subtract the 800. The person could only claim up to 300 in hobby loss. That's where you still have to pay in. It's ridiculous. Another way for the government to get money.
Edited by WetSaddleBlankets 2018-01-10 1:01 PM
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Expert
Posts: 2531
Location: WI | horsegirl - 2018-01-10 12:54 PM It makes me so nervous whenever I hear of someone doing a tax return filing themselves. There is no way we can know all of those tax codes and their intricacies each and every year. Let the pros handle it! Plus, that way they are responsible for any errors, as long as you have provided them accurate information. I pay about $250 for my accountant (I have normal source of employment, I itemize, and I have a rental property) to file my return and it is totally worth it. Plus, once I gather the paperwork and documentation, it only takes sitting down with her for about an hour to get it all done...and I'm ensured that it is done right. Just my two cents.
I've done my own taxes since I was 18. Last year was the first year I was filing while married. Not sure if I should file separately or jointly, we went to a tax preparation service. Her software was the exact same as what I have been using for years. Took her max 15 minutes and $390 later they had us. Not this year. I'm going off our return last year and am confident I can file with no issues. |
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Extreme Veteran
Posts: 560
Location: Where the buffalo roam | If you get a 1099-Misc then that amount is sent in and reported to the IRS so they are quite aware that you have made that money (anything over $600 a year for one entity). I have always just reported it on my tax return and pay the taxes due as do not write any of my expenses off and don't consider it a business. Reporting it as a hobby is a hassle and, as someone already mentioned, you can only write off a portion so it isn't worth the time. If you are making that much money barrel racing you should consider reporting it as a business or you should at least be putting aside a percentage (35% is often the standard) that you can use to pay the taxes on the income at the end of the year. |
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Nut Case Expert
Posts: 9305
Location: Tulsa, Ok | Nateracer - 2018-01-10 12:16 PM
I would like to know if you even have to put in the 1099 if you don't claim your horses at all.
The answer is yes. If you get a 1099 of any kind you better put it on your return. The IRS runs a 1099 matching program with tax returns. If the 1099 cannot be matched to your return they will be getting in touch with you. |
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Married to a Louie Lover
Posts: 3303
| Horse related we keep track of everything but only write off enough to offset the 1099’s we do receive.
That’s at the advice of our accountant. |
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Gettin Jiggy Wit It
Posts: 2734
| OhMax - 2018-01-10 1:25 PM
Horse related we keep track of everything but only write off enough to offset the 1099’s we do receive.
That’s at the advice of our accountant.
that is what I was hoping to hear! |
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The One
Posts: 7997
Location: South Georgia | linds - 2018-01-10 2:06 PM horsegirl - 2018-01-10 12:54 PM It makes me so nervous whenever I hear of someone doing a tax return filing themselves. There is no way we can know all of those tax codes and their intricacies each and every year. Let the pros handle it! Plus, that way they are responsible for any errors, as long as you have provided them accurate information. I pay about $250 for my accountant (I have normal source of employment, I itemize, and I have a rental property) to file my return and it is totally worth it. Plus, once I gather the paperwork and documentation, it only takes sitting down with her for about an hour to get it all done...and I'm ensured that it is done right. Just my two cents. I've done my own taxes since I was 18. Last year was the first year I was filing while married. Not sure if I should file separately or jointly, we went to a tax preparation service. Her software was the exact same as what I have been using for years. Took her max 15 minutes and $390 later they had us. Not this year. I'm going off our return last year and am confident I can file with no issues.
Edited by horsegirl 2018-01-10 1:42 PM
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Miss Laundry Misshap
Posts: 5271
| SC Wrangler - 2018-01-10 1:25 PM Nateracer - 2018-01-10 12:16 PM I would like to know if you even have to put in the 1099 if you don't claim your horses at all. The answer is yes. If you get a 1099 of any kind you better put it on your return. The IRS runs a 1099 matching program with tax returns. If the 1099 cannot be matched to your return they will be getting in touch with you.
I have been claiming them. But many of the barrel races I go to make you fill out the tax paperwork, whether or not you won 100 or 5000, just to claim your check. I'll get a 1099 on around $200 I won in May. |
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 Take a Picture
Posts: 12838
| My accountant does mine. I take off all expenses and file all 1099's. The guy's father and grandfather have been doing my inlaws since the late 1930's. He charges $200 but again they have been doing this awhile. I never have to pay anything which is the most important thing. |
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Gettin Jiggy Wit It
Posts: 2734
| streakysox - 2018-01-10 6:13 PM
My accountant does mine. I take off all expenses and file all 1099's. The guy's father and grandfather have been doing my inlaws since the late 1930's. He charges $200 but again they have been doing this awhile. I never have to pay anything which is the most important thing.
thanks! So they file on a schedule c and use your expenses like fuel and entries to zero them out? |
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Married to a Louie Lover
Posts: 3303
| horsegirl - 2018-01-10 1:41 PM
linds - 2018-01-10 2:06 PM horsegirl - 2018-01-10 12:54 PM It makes me so nervous whenever I hear of someone doing a tax return filing themselves. There is no way we can know all of those tax codes and their intricacies each and every year. Let the pros handle it! Plus, that way they are responsible for any errors, as long as you have provided them accurate information. I pay about $250 for my accountant (I have normal source of employment, I itemize, and I have a rental property) to file my return and it is totally worth it. Plus, once I gather the paperwork and documentation, it only takes sitting down with her for about an hour to get it all done...and I'm ensured that it is done right. Just my two cents. I've done my own taxes since I was 18. Last year was the first year I was filing while married. Not sure if I should file separately or jointly, we went to a tax preparation service. Her software was the exact same as what I have been using for years. Took her max 15 minutes and $390 later they had us. Not this year. I'm going off our return last year and am confident I can file with no issues.
Ditto - a CPA is the way to go. Ours is worth every penny we pay him with all we have going on. I don’t disagree someone with a couple W2’s and a 1099 can make it work - we have more than that. Additionally a previous tax preparer screwed up a deduction from when my husband built his house and our CPA did the legwork over 2 years to get it reversed - we paid him $400ish to do it and got $3000 back. |
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Elite Veteran
Posts: 629
| WetSaddleBlankets - 2018-01-10 1:59 PM
powerstroke power - 2018-01-10 12:39 PMThis is my understanding:Hobby income - say its $5000Expenses - $5000Zero income and zero loss. But, i've heard you can only claim it up to 2% of your income...this part i'm not sure about. it doesn't work exactly as that. I wish and that is what I originally thought. You have to take 2% and multiply it by your regular job adjusted gross income w2 then subtract that number from the winnings from the hobby. Thst number is the maximum amount you can deduct from the winnings with the hobby loss deduction. So If a person makes 40,000 you multiply that by 2% and get 800. Then subtract the 800 from the winnings from the hobby. So like if the 1099 was 1200 I'd subtract the 800. The person could only claim up to 300 in hobby loss. That's where you still have to pay in. It's ridiculous. Another way for the government to get money.
I too cringe at the thought of doing something like this yourself when you don't have an accounting degree. I DO have an accounting degree and only do our own because we literally have NOTHING but W2's. No kids, no mortgage, dont charitably donate more than the standard deduction. I like flying under the radar.
Like the others said though, if you save your receipts and your 1099's and you do get audited, if you have everything and report everything, what is there to worry about? |
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 Expert
Posts: 1479
Location: rabbit run | Nateracer - 2018-01-10 1:43 PM SC Wrangler - 2018-01-10 1:25 PM Nateracer - 2018-01-10 12:16 PM I would like to know if you even have to put in the 1099 if you don't claim your horses at all. The answer is yes. If you get a 1099 of any kind you better put it on your return. The IRS runs a 1099 matching program with tax returns. If the 1099 cannot be matched to your return they will be getting in touch with you.
Rae, you shouldn't be getting a 1099 for less than $600. If you go to several races by the same producer and the total for the year is more than $600, you will get a 1099. If you just won $200 somewhere, they should not send you one.
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Extreme Veteran
Posts: 542
| SC Wrangler - 2018-01-10 1:25 PM
Nateracer - 2018-01-10 12:16 PM
I would like to know if you even have to put in the 1099 if you don't claim your horses at all.
The answer is yes. If you get a 1099 of any kind you better put it on your return. The IRS runs a 1099 matching program with tax returns. If the 1099 cannot be matched to your return they will be getting in touch with you.
For barrel racing things I never claim, put down or do anything government and tax wise barrel horses don't exist. Race horse stuff gets done but barrel earnings....I never report and have never been checked |
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 Some Kind of Trouble
Posts: 4430
| diggerdoo - 2018-01-10 7:20 PM Nateracer - 2018-01-10 1:43 PM SC Wrangler - 2018-01-10 1:25 PM Nateracer - 2018-01-10 12:16 PM I would like to know if you even have to put in the 1099 if you don't claim your horses at all. The answer is yes. If you get a 1099 of any kind you better put it on your return. The IRS runs a 1099 matching program with tax returns. If the 1099 cannot be matched to your return they will be getting in touch with you.
This is correct... no 1099's under $600.
I work for a CPA.. if I have 1099's from barrel racing we deduct expenses similar to the income amount. |
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| I'm curious how the 1099 reporting on taxes will affect us down the road with the ELD/CDL requirements. Will claiming the 1099 as misc income (hobby) vs. Schedule C have any impacts with the enforcement of the CDL requirements since we are making money at races? I intend to ask my accountant but hoping maybe someone here has some information.
Edited by bscanchaser 2018-01-11 10:51 AM
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  Witty Enough
Posts: 2954
Location: CTX | OhMax - 2018-01-10 1:25 PM Horse related we keep track of everything but only write off enough to offset the 1099’s we do receive. That’s at the advice of our accountant.
This is what we do. I just save up all the receipts for feed, hay fuel and stuff. I have enough in hay expenses alone to off set the occasional 1099 I end up with. |
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Witty Enough
Posts: 2954
Location: CTX | bscanchaser - 2018-01-11 10:36 AM I'm curious how the 1099 reporting on taxes will affect us down the road with the ELD/CDL requirements. Will claiming the 1099 as misc income (hobby) vs. Schedule C have any impacts with the inforcement of the CDL requirements since we are making money at races? I intend to ask my accountant but hoping maybe someone here has some information.
I'd be very interested to know this one too... |
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boon
Posts: 3
| If you claim the1099 as ordinary income. You aren't required to have cmv /eld.
If you claim it as a business (expenses) deduction. You are required to get Cmv/eld.
I read this on the Texas DMV website.
CDL is based on weight 26000>combined gvwr or gvwr 10000>on towed trailer.
Edited by Justabrrlrcr 2018-01-11 8:23 PM
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Gettin Jiggy Wit It
Posts: 2734
| Justabrrlrcr - 2018-01-11 8:21 PM
If you claim the1099 as ordinary income. You aren't required to have cmv /eld.
If you claim it as a business (expenses) deduction. You are required to get Cmv/eld.
I read this on the Texas DMV website.
CDL is based on weight 26000>combined gvwr or gvwr 10000>on towed trailer.
But... How will they know? |
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boon
Posts: 3
| I don't have any idea how they know. I wouldn't think they can check your tax returns. Maybe it's based on the honor system. |
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Expert
Posts: 1956
Location: Ky | They are not required to 1099 under $600 but they can and many do. I get several 1099's for $100 to $300 a year. Some companies don't send a 1099 unless it's over $600.
But 1099 or not you are required to report income. You may never get caught if you don't report it because it wasn't 1099'ed. But then again, you might? |
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 My Heart Be Happy
Posts: 9159
Location: Arkansas | runfastturnsmooth - 2018-01-11 9:42 AM
SC Wrangler - 2018-01-10 1:25 PM
Nateracer - 2018-01-10 12:16 PM
I would like to know if you even have to put in the 1099 if you don't claim your horses at all.
The answer is yes. If you get a 1099 of any kind you better put it on your return. The IRS runs a 1099 matching program with tax returns. If the 1099 cannot be matched to your return they will be getting in touch with you.
For barrel racing things I never claim, put down or do anything government and tax wise barrel horses don't exist. Race horse stuff gets done but barrel earnings....I never report and have never been checked
You have been very lucky! I've had customers forget to report SMALL amounts of income. Several years later, the IRS sends a sweet little letter wanting their due. Plus you pay interest of course.
And while $600 is the magic number for 1099s, some people/companies/firms will send them for under that amount.
Edited by Chandler's Mom 2018-01-12 12:50 AM
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 Expert
Posts: 1514
Location: Illinois | I have a bachelors in accounting and am one credit shy of my masters as well....and I pay an accountant to do my taxes...I avoid tax stuff myself, I hate doing them. Find a good TAX accountant, CPA . You can get through a bachelors and just learn how to do basic tax forms. This is the first year I've made over $600 from a single producer, so we'll see what happens. Haven't gotten anything in the mail yet, but I am prepared to pay taxes on it. |
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boon
Posts: 1
| Unfortunately, you can't deduct any expenses as long as the IRS doesn't give such an option. You may write it down in the Box 7 of your next 1099-MISC but it can cause way more questions from the tax guys |
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 Reaching for the stars....
Posts: 12704
| My farm is on a Schedule F, not C. It's an agricultural business, horse breeding and selling specifically. Yes, I love getting proof of winnings on my horses. I report every penny I earn in any way. I will never be getting rich from my Schedule F earnings, but at least I can show I am not throwing all the monies I spend on it away.
I also pay a top equine tax CPA to do our taxes. She is the go-to equine accountant for Middleburg VA. |
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Take a Picture
Posts: 12838
| I highly recommend that report all 1099's. I just got a letter from the IRS saying that I owe them $5300 from 2016. There was a 1099 in question and it was actually reported on my farm form. My accountant is handling that for me but I will probably get stuck for something. All 1099's are sent to the IRS. |
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 Cute Little Imp
Posts: 2747
Location: N Texas | linds - 2018-01-10 1:06 PM
horsegirl - 2018-01-10 12:54 PM It makes me so nervous whenever I hear of someone doing a tax return filing themselves. There is no way we can know all of those tax codes and their intricacies each and every year. Let the pros handle it! Plus, that way they are responsible for any errors, as long as you have provided them accurate information. I pay about $250 for my accountant (I have normal source of employment, I itemize, and I have a rental property) to file my return and it is totally worth it. Plus, once I gather the paperwork and documentation, it only takes sitting down with her for about an hour to get it all done...and I'm ensured that it is done right. Just my two cents.
I've done my own taxes since I was 18. Last year was the first year I was filing while married. Not sure if I should file separately or jointly, we went to a tax preparation service. Her software was the exact same as what I have been using for years. Took her max 15 minutes and $390 later they had us. Not this year. I'm going off our return last year and am confident I can file with no issues.
Same here! My husband was convinced that I wasn't doing it right myself because we had to pay in--but he wasn't about to do it himself. So last year I went to a tax place, they put in everything the same as I do, paid them $300, and we STILL had to pay in. I did it myself this year :) |
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Veteran
Posts: 194
Location: Pittsburg, Texas 75686 | For years we claim it as a business. If you have receipts and checks and entry info no worries. |
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Married to a Louie Lover
Posts: 3303
| I believe some things have changed this year regarding 1099’s and “hobbies”. More or less you get to pay the taxes but you can’t deduct the expenses, how nice of them. At least that’s what I’ve heard.
For folks with serious amounts in winnings it may be worth the hoops to file as a business. |
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 boon
Posts: 2
| Taxes are a real robbery! I do not understand how you can claim a tax on a possible income that has not yet been received! Especially if this income is not unambiguously guaranteed. After all, a horse can lose. It is really terrible that our country, our government, which is supposed to protect us, is simply robbing us like the simplest robbers from the high road. How can you demand money from a person for his hobby! What the hell is going on! The guy is very sympathetic to you and all I can advise is to apply for the registration of all this tax stuff to the trusted company ThePayStubs.
Edited by draverin 2021-09-10 8:11 AM
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Horse people and reporting 1099 misc income on taxes