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GTX JOHN · 05-21-2012, 02:27 AM

Any Accountants in the House?

I did my kids taxes and showed race checks as Misc. Income and
did not show any expenses or a Schedule C. Always do it that way on
his winnings and not have a problem. I received a letter from IRS stating
he owes Self Employment Tax on his winnings extra 15% in addition to the income tax.

He made under 10K and we think it is only a Hobby Income.
Do you guys pay self employment tax on all you race winning as well as
income tax?

Should I do a Schedule C/1040X and call racing a business.....We sure spent way more that we ever win! I thought the IRS would call it hobby income.

Confused in Nevada.... thanks for any help!

05-21-2012, 02:27 AM	#1
GTX JOHN VIP Member Join Date: Jun 2009 Location: Boulder City, Nevada 89005 Posts: 2,730 Likes: 2,790 Liked 2,469 Times in 695 Posts	Help: Self Employ. Tax on Race Purses Any Accountants in the House? I did my kids taxes and showed race checks as Misc. Income and did not show any expenses or a Schedule C. Always do it that way on his winnings and not have a problem. I received a letter from IRS stating he owes Self Employment Tax on his winnings extra 15% in addition to the income tax. He made under 10K and we think it is only a Hobby Income. Do you guys pay self employment tax on all you race winning as well as income tax? Should I do a Schedule C/1040X and call racing a business.....We sure spent way more that we ever win! I thought the IRS would call it hobby income. Confused in Nevada.... thanks for any help!