The One Big Beautiful Bill Act brings sweeping tax changes that directly impact horsemen, breeders, and farm owners. The new law makes 100% bonus depreciation for horses and equipment permanent, allows farm sale gains to be spread over four years, and exempts overtime pay from federal income tax—helping both employers and workers at the track and on the farm. It also raises the Form 1099 reporting threshold to $2,000 and eliminates deductions for hobby expenses, meaning horsemen must demonstrate that their operations are true businesses. Understanding these provisions can help you plan purchases, manage sales, and optimize your year-round tax strategy.

Learn why insurance is essential for jockeys and horsemen—even when it feels like a waste of money. Understand how risk pooling works, when insurance fails, and why paying premiums with no payout is often the best-case scenario in racing.

Why Horsemen and Jockeys Need Real Tax Planning - Not Just a Tax Return

Every year, you hand over your receipts, 1099s, and income records to your CPA or tax preparer. A few weeks later, your return is done, and you move on. But let’s be real:

Is your CPA actually helping you make smart tax decisions that lower your taxes over time, or are they just filling out the forms based on what already happened?

The racing industry’s financial ups and downs can make tax planning challenging, but failing to manage estimated tax payments properly can lead to hefty penalties. This article explores the IRS safe harbor rule, which helps racing professionals and breeders avoid underpayment penalties.

How to discover if you are paying tax penalties.