View Full Version : Can I write off a car?
ilikeaces
05-03-2005, 12:50 PM
Hi,
I am new to the whole tax code that involves what you can and can not write off as a proffesional poker player. My question is, if I use my car to drive to a lot of tournaments and card clubs can I write it off against my income?
Nfinity
05-03-2005, 01:18 PM
I don't think you can write off the whole car. But you can:
1)Write off mileage. You have to keep an accurate log of it in case you get audited. They pay you back a certain amount per mile. Talk to your CPA, they will help you out.
2)If you bought the car within the taxpaying year, you may be able to write off the tax as an itemized deduction. I'm not sure about the specifics on this one either. Again see a CPA.
oljumpstart
05-03-2005, 01:18 PM
My guess would be no. You are essentially driving to work. I drive to work everyday, but cannot write my car off. Maybe if the tournament were held in your car...
FlFishOn
05-03-2005, 01:18 PM
Don't write off a computer either. The IRS is looking for this BS even though you might be playing str8.
Schwartzy61
05-03-2005, 01:29 PM
[ QUOTE ]
Hi,
I am new to the whole tax code that involves what you can and can not write off as a proffesional poker player. My question is, if I use my car to drive to a lot of tournaments and card clubs can I write it off against my income?
[/ QUOTE ]
You cannot write off the full price of a car that is still a personal automobile, but like the other poster mentioned you can take a mileage expense just like any other Schedule C business. I don't know the exact number but it's somewhere around 30 or 40 cents per mile.
Also, if you buy a computer as the means to facilitate your business as a poker professional then yes it can be used as a tax deduction on your income. Just as you would be able to take a portion of your mortgage payment as a business expense if you maintain an office in your home in which you play poker.
You of course have to prove that these items are primarily for business use otherwise you would lose the deductions in an audit. It's best to document usage as business/personal and take a deduction equivalent to the percentage of business use.
I strongly recommend that the first time you file taxes as a poker professional you consult an actual tax accountant or even better CPA. It's worth your while to go through the process with a professional the first time around. Many tax establishments now offer "seminars" and such that would be good if you wanted to do it yourself. Also one of the widely popular tax programs are especially useful. Get one of the "premium" editions that have the extras for Schedule C businesses to make your life much easier around April 15.
And one last thing, if you will be filing as a poker professional, and that is your primary source of income and you aren't paying taxes into the system, you should be filing quarterly tax estimate payments. Otherwise you will be hit with a heavy penalty at tax time next year for not paying any taxes during the course of the year.
Pokeraddict
05-03-2005, 01:50 PM
I don't know the exact number but it's somewhere around 30 or 40 cents per mile.
It was $.375 for 2004.
And one last thing, if you will be filing as a poker professional, and that is your primary source of income and you aren't paying taxes into the system, you should be filing quarterly tax estimate payments. Otherwise you will be hit with a heavy penalty at tax time next year for not paying any taxes during the course of the year.
Unless you were received a refund last year or would have gotten one had you filed. This would exempt you from the penalty for this year. I did not have to pay it because in 2003 I got a refund but the penalty was only going to be about 1.75% of the amount of tax I owed so it would not have been the end of the world.
You should take any write off you can prove was legit. You have to do anything you can to offset the 15.3% self employment tax. So what if you get audited, if you can prove everything you filed it is nothing but a waste of time for them.
chucksim
05-03-2005, 02:06 PM
Generally, yes, but to a specific point. Talk to a CPA.
Be aware that you have to show a material cash flow profit from your Schedule C business x out of y years to keep the IRS off your back (can't remember the specifics off hand, but 3 out of 5 rings a bell).
If you think that you're going to be able to write off most (or all) of your poker "income" to avoid the taxes, the IRS will grab you very quickly, and disallow all of these deductions looking back to previous years as well. They'll say it's a "hobby" and not a "business". If this is your sole source of income, you've got to make money doing it.
That advice is on top of all the other good points brought up by other posters. Bottom line, talk to a good CPA. As in many poker situations, the proper advice here is "It Depends".
chesspain
05-03-2005, 02:15 PM
[ QUOTE ]
My guess would be no. You are essentially driving to work. I drive to work everyday, but cannot write my car off. Maybe if the tournament were held in your car...
[/ QUOTE ]
To clarify this, you cannot deduct the costs for basic commuting. So if you drive primarily to one casino, I would assume you could not deduct the cost. Now, if you routinely play at a variety of casinos, you may be able to deduct milage.
Consequently, you should probably consult with a tax professional.
P.S. Why are you posting this in the internet forum?
grimel
05-03-2005, 02:36 PM
Find a CPA. I've written off over $100,000 in milage in the last 3 years and 4 computers in the last 6. You have to have a justifiable reason (self employeed in a field that regularly travels). The IRS looks for crap combinations - i.e. home business making small $$ with big expenditures (hobby business looking for tax breaks).
[ QUOTE ]
Don't write off a computer either. The IRS is looking for this BS even though you might be playing str8.
[/ QUOTE ]
If you play online poker for a living, how can you not write off a computer? Of all the things not to write off, I thought this would be last on the list...
Schwartzy61
05-03-2005, 03:29 PM
[ QUOTE ]
[ QUOTE ]
Don't write off a computer either. The IRS is looking for this BS even though you might be playing str8.
[/ QUOTE ]
If you play online poker for a living, how can you not write off a computer? Of all the things not to write off, I thought this would be last on the list...
[/ QUOTE ]
I'm not sure where that guy was coming from, but if you use the computer primarily for business then it is fine as an expense. And as an Internet Poker Professional, your computer should be the first thing you look to for a deduction...
I drove mine into a tree last year...complete write off!!
TheMetetron
05-03-2005, 08:14 PM
40.5 cents per mile for 2005.
MelchyBeau
05-03-2005, 08:24 PM
[ QUOTE ]
Hi,
I am new to the whole tax code that involves what you can and can not write off as a proffesional poker player. My question is, if I use my car to drive to a lot of tournaments and card clubs can I write it off against my income?
[/ QUOTE ]
It is possible to write off an H2 or Escalade. It is due to the weight of the vehicle.
Melch
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