1099 nec for money made from racing cars

[amflood34]

I race cars on weekends. The track pays out money for placing. I received 1099 NEC for the money i won last year. Do I treat this as less common income i.e. hobby? Or do i enter it as a business and file scehdule C, tho I have no formal business formed?

[ZoltanB45]

It sounds like more than a hobby and you don't have to have organized an entity to file a schedule c, so I would say it's a business.

With a business, you will be hit with Self Employment taxes, but you can also write off the deductions related to the racing.

Here is a link self employment tip going a little bit more into detail of what you can do.

[Mike9241]

It's hard to say.   a hobby is an activity not entered into for profit. so if one were to look at the net profits year after year and see losses, that would likely indicate a hobby.

an activity is presumed to be for profit if gross income exceeds deduction for 3 or more out of  5 consecutive years.