Tax Attic for 7-25-19

In case you missed it, the World of Outlaws winged sprint race cars made their only appearance in Michigan on Friday, July 12.  The race was held at Hartford Speedway which is situated west of Kalamazoo off I-94.  Hartford Speedway is located right in town, perhaps 2 blocks from downtown Hartford, similar to Berlin Raceway in Marne which is also situated on the local fairgrounds and right in town, perhaps 2 blocks from downtown Marne. However, it’s different from Berlin in that at one-time Berlin was dirt and is now a paved track and Hartford at one-time was pavement and is now a dirt track.  The World of Outlaws circuit endures a brutal travel schedule throughout most of the year travelling from one Hartford to another Hartford throughout the entire continental United States.  For example, the days before and following the Friday night appearance in Hartford went like this. The previous Friday and Saturday night’s races were held  at Cedar Lake Speedway in New Richmond, Wisconsin.  The circuit then made it’s way around Lake Michigan and Chicago to Hartford.  Then back around Lake Michigan and Chicago to Wilmot Speedway in Wilmot, WI for a Saturday night race. The circuit then had until Tuesday to travel back around Lake Michigan and Chicago and assemble in Attica, Ohio at the Attica Raceway Park. Finally, it was on to Eldora Speedway in Rossburg, Ohio for four straight nights of racing starting on Wednesday.  Saturday night’s race, called ‘The King’s Royale’, pays $175,000 to win so anyone and everyone who owns a winged sprint car does show up to give it a go. I’m fairly sure a few non-winged sprinters might bolt on a top wing trying to catch lightning  in a bottle. The typical race, like Hartford or the race at Wilmot, might pay anywhere from $5,000 to $10,000 to win so $175,000 would make the year for the lucky winner. For the right driver, winning The King’s Royale would make his career. Kind of like winning the British Open will do for Shane Lowry.  This is a typical two week schedule for the racers. A couple of cars were broken in accidents at Hartford on Friday night that had to be fixed and ready to run at Wilmot on Saturday night. I’m not sure how that was possible but I am also sure it happened. I really appreciate the efforts put in by this group of entertainers. It’s a very dangerous way of making a living but it must be fun and satisfying to the drivers.  I don’t believe I have ever been to a Sprint Car race that hasn’t opened with a word of prayer from a local minister asking for protection for the drivers as they participate in the race and provide us with entertainment. We all hope for a great and safe show and Hartford definitely fulfilled our hopes.

From time to time, we encounter a self-employed taxpayer who files a Schedule C or is a partner in a partnership filing a Form 1065 who has been told that he/she can give himself/herself a W-2 as an employee. These taxpayers have been given incorrect information.  Schedule C owners and Partners in a partnership may not receive a W-2.  As owners or partners, they specifically are not eligible to be called employees of the Schedule C or the Partnership and, as such, are not allowed to be treated as employees. Period.  Rules are what rules are and the rule, in this case, says that taxpayers who receive self-employment income may not receive W-2 income. This has been the case for as long as I have been a tax professional and I would be willing  to bet will remain the rule as long as there are tax returns to be filled. This is one of the situations where it’s just the way it is.  This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent.

Action Tax Service is a part of Integrity Tax Group on Northland Dr.

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