Online Tax Results

[esknights]

(crossposted in IG)

I just filled out an E-tax online to see what my refund or lack there of would be. Before including poker, I was going to receive a refund of about $600.

I then went back and put in gambling winnings under other income. I put in $7000 and the program said I owed the IRS about $500. So I guess that is a turnaround of $1100 which is 15% of my winnings.

This was just a rough draft. I only included my net poker income which I am sure is not right. I looked into filing a Schedule C, but was unsure of how this would work. What are the advantages of filing a Schedule C or C-EZ.

Also, shouldn't the IRS be happy that I am even attempting to claim my gambling winnings as I believe that most people do not?

[DesertCat]

It's my understanding you have to file a schedule C to only count net winnings. If you do, you get to write off a multitude of expenses. To file a schedule C you have to be a pro, which if had net winnings and devoted significant time to poker playing, you might qualify for.

Otherwise, you need to report winning sessions as other income, and gambling losses go elsewhere, meaning your taxes will be even higher. If you don't, and get audited, the IRS isn't going to give you points for trying, at a minimum you'll owe back taxes plus penalties.

It sounds like you definitely would benefit from consulting a knowledgable tax advisor, instead of me, who is not. I'm guessing that if they don't save you their fees directly, the peace of mind will be compensation enough.

[Lottery Larry]

" To file a schedule C you have to be a pro, which if had net winnings and devoted significant time to poker playing, you might qualify for. "

I read somewhere that you have to show status for 3 out of 5 years, with most of your income coming from gambling, to treat it like a business.

but that was a while ago.

Recreational gamblers file miscellaneous income for session wins and then deduct session losses... but your advice to see a tax pro is good advice

[TimTimSalabim]

If you file as a pro, don't you also have to pay self-employment tax? That's probably going to outweigh any other advantages you get, for most people.

[Lottery Larry]

Wouldn't surprise me, I have no idea.

The day I can afford to raise my family mainly on my poker winnings, I'd be THRILLED to pay a self-employment tax!