Tax Question

[Kickstand]

Do our 1099 totals include hotel reimbursement that we may have received or is it just pay for the weekend?

[The GECCO]

it should be just pay

[Lurch]

Since this has been brought up I would like to point out that many a good corner workers have quit over the old 1099 BS. They barely make enough to cover expenses to work corners then they have to pay 15-33% of what they make in taxes. Now they are having to pay to corner work. Hence the reason they have moved on.

I'm coming back and corner working this year to stay involved in the club and help out. However once I hit that magic $599.99 I too will prolly move on to something else like just watching the races.

Lurch

[The GECCO]

Doug, what is the reason you bring it up? It's not as if the MRA has a choice regarding whether or not to file this paperwork - it's the law.

[glenngsxr]

I like the part where "now they have to pay to cornerwork." Just because you are getting taxed by earning income, does not mean you are paying to cornerwork. That is a fairly unbelievable statement. Anyone that is cornerworking is doing out of passion for the club and sport. If you are worried about what your cornerworker 1099 is gonna look like at the end of the year, then you should be working the corner and not cornerworking. Glenn #62

[Lurch]

Doug, what is the reason you bring it up? It's not as if the MRA has a choice regarding whether or not to file this paperwork - it's the law.

There are ways around these so called laws.


I like the part where "now they have to pay to cornerwork." Just because you are getting taxed by earning income, does not mean you are paying to cornerwork. That is a fairly unbelievable statement. Anyone that is cornerworking is doing out of passion for the club and sport. If you are worried about what your cornerworker 1099 is gonna look like at the end of the year, then you should be working the corner and not cornerworking. Glenn #62

You are correct in that some of the cornerworkers do it out of passion. But when it gets to the point that you have to spend money to sit and roast in a corner the passion/fun goes away real quick. Also the working the corner comment and others like it is what makes people go do other things. I personally don't like to spend $300-$400 or more to help other people have fun. Maybe I will just go down and watch the action on the other corner in maybe more entertaining.

[Racerwife43]

Kickstand Posted: Tue Apr 10, 2007 2:32 pm Post subject: Tax Question

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Do our 1099 totals include hotel reimbursement that we may have received or is it just pay for the weekend?


It is only pay.


Lurch Posted: Tue Apr 10, 2007 6:33 pm Post subject:

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The GECCO wrote:
Doug, what is the reason you bring it up? It's not as if the MRA has a choice regarding whether or not to file this paperwork - it's the law.


There are ways around these so called laws.

If you can show me a legal way to accomplish this, I am all ears. If you are suggesting something unethical or illegal, I won't put this club or myself at risk.

Susie
MRA Money Lady

[Kickstand]

does anyone know if hotel costs would count towards an expense? or are there any accountants in the club that might be willing to help answer some questions.

[Lurch]

If you can show me a legal way to accomplish this, I am all ears. If you are suggesting something unethical or illegal, I won't put this club or myself at risk.

Susie
MRA Money Lady

You really just need to cut down the amount which is paid to the workers by a small amount roughly $40-$50 per weekend. This can easily be done with reimbursement of mileage. At 48.5 cents a mile a worker doesn't have to drive to far to make up the $40-50 you just put a cap on it at say 100 miles. Also you could give them a per deim for food which I believe is non taxable also. The MRA used to do this in the past.

[T Baggins]

The MRA can't win either way.

Every year we hear that cornerworkers don't get paid enough, so we gave them a decent raise for 2007.

Now Lurch says they get paid too much :?:

If you're cornerworking 'cause you need the money, you probably are in the 15% bracket and don't have any real tax consequences to worry about anyway. And if you are in the 33% bracket and still need the paltry sum the MRA pays to make ends meet - then you have a money management problem. Either way, 15-33% of not very much is still not very much.

MRA pays cornerworkers, most clubs don't. We also provide lunch (in lieu of a per-diem), and enough dough for two to shack up in a hotel and break even in Colorado (and COMPED hotel rooms and travel at Hastings). A reduction in pay replaced with a mileage reimbursement would have such a minimal impact I question whether it's worth it or not. Also, would it be enough to bring back the "good many who quit" over the 1099 BS?

Maybe Tim should do a vote of ALL cornerworkers at the first race, then take that to the Board for discussion?

[Racerwife43]

Tawny,
it's my understanding that you can deduct your milage (because the MRA does NOT re-imburse you for that) and that the milage vs the pay, just about cancel each other out.

Since we re-imburse you for the hotels, I don't know that that is a decutable expense.

Susie

[Lurch]

Now Lurch says they get paid too much :?:

Not sure where I said that. All I'm saying is change the way they are paid. It does make a difference for some. When I was on the board it would cost me about $500.00 on my pay when it came to my refund. I doubt the corner workers are really working to make money. But do they really want to stand out there to spend money. Maybe this is one of the reason we have so few now?

I guess the rest of you just like to pay the government way more then you should.

[Kickstand]

Susie,
What is the best way to keep track of the mileage? I'm really going to need the help for next year.

[Racerwife43]

Personally, I just have a small notebook in my car that I write down the date, start mileage, stop mileage and what I am doing it for. I have a couple of different jobs that I have to keep mileage for, so it's second nature for me to do it.

You then have a complete log if you get audited, and you can total up your miles at the end of the year to deduct off your taxes.

You can still tally up what you drove last year in time for this years taxes (unless you have turned them in already). From your house to the track is x miles (use mapquest.com). You made the trip x times. tally the mileage up then multiply it by the reimbursement rate (Lurch says it's 48.5 cents/mile don't quote me on that). I think there is a place on the IRS forms to list expenses not reimbursed. I am not sure 'cause I use Dan Predovitch (shameless sponsor plug) and I just provide the information and they do the rest.

I plan on talking to Dan Predovitch (shameless MRA sponsor plug) the MRA Tax Guy on what we can LEGALLY DO to help you guys out, whats deductible, etc.

Let's talk more at the school on 4/20.

Susie

[rforsythe]

Either way, 15-33% of not very much is still not very much.

:lol: That's Tony math for ya.

In any event - you should be able to deduct hotel expense above and beyond what is reimbursed, if there is any excess (usually with a roommate, that is minimal at best). You can deduct mileage - track it yourself in a notepad as someone else suggested. You could probably also deduct work-related expenses like those sexy white painter's pants, rain gear, etc.

Whether any of that makes up for whatever additional tax you'd be burdened with is entirely conditional on your individual tax situation - for example, if your itemized deductions don't exceed the standard deduction even with all of that added in, it doesn't matter. Filing status can matter as well, if you're married and have the choice. Obviously you don't want to cheat on your taxes, but there are legal ways to reduce your tax burden. Note that none of the above-mentioned steps have anything to do with the MRA, it's all on you to track mileage and keep receipts.

I don't honestly know what my refund "reduction" was from being on the board. I do know that working a whole season of corners previous to that didn't account for much though, because cornerworking pays less than being a director.

FWIW however, I looked up the IRS tax tables; let's say your pre-cornerworking taxable income was $45,000 for the year. If you made a full $1,000 cornerworking (I don't know what the pay rate is now but that seems feasable with a dedicated worker) your tax would go from $7814 to $8064 - so you'd be taxed $250, or 25% of your income. Obviously your mileage may vary as your income determines tax rate, but that should give you a rough guess as to what you can expect. Also, if you were able to offset that by $250 in expense deduction, you'd see the tax burden decrease by $63.

Income gets taxed. Welcome to living in the USA. The only thing the magical $600 mark means is that the MRA has to report it at that point. You're still legally obligated to include it on your taxes even if below $600, though there won't be a paper trail to make sure you do, particularly given the cash payment system used. But that's your choice to make.

Now, disclaimer: I am not a tax adviser. You didn't pay for this information. If you're concerned about it, consult someone who is on the hook for giving you guaranteed-accurate advice. But I've done a lot of reading on the subject over the years in doing my own somewhat complicated taxes myself, and this is reality as I see it.

[Timmay!]

Maybe Tim should do a vote of ALL cornerworkers at the first race, then take that to the Board for discussion?

I have never heard any complaints by a corner worker regarding this, and that includes today.

[KipBook]

I will say this, If you are cornerworking for the money, you're here for the wrong reasons! Cornerworking has nothing to do with money. I do it because I love watching the bikes and the club is like a cool family barbecue that all your cool cousin show up to. Yeah, the money is a nice kickback, but if you look at what the other clubs in the country give their cornerworkers, you'd be begging to come back to the MRA! none of the other crews get hotel reimbursement and they certainly don't get as much for "gas". We've got it made working with the MRA!

As far as the taxes go, you can claim your mileage as a deduction, we are considered "private contractors" and the mileage is a business expense. I've done it every year since I've cleared the $600 mark. I don't "pay" to work the races. Yes, we have to pay taxes on the income but whoop-te-do, the taxes are less than a full tank of gas! (granted my truck takes $100 to fill...) Either way, we still have it made and I will come back every year, with or without a "raise". I enjoy the family, not the cash.

See ya all at the track!