Need tax advice

[Avarice]

Are there any tax professionals who read this message board, or is there anyone who can recommend a certified tax professional with experience with gambling winnings?

After figuring out my taxes, I realized that I'd be paying over 50% on my gambling winnings. That's one hell of a rake. I'm looking for possible deductions I may have overlooked, or any other way to be able to keep more of my winnings (note: tax fraud is not an option). For reference, I already have a well-paying job, which I guess is why the tax is so heavy on the extra income.

--Avarice

[Ulysses]

That's just the way it is.

I wouldn't worry about finding someone with special experience with gambling earnings, as reducing your tax liability will be an issue of finding general deductions, not gambling related ones. That gambling income might as well be interest income or extra salary - it's just additional incremental income taxed at your highest marginal rate.

[Avarice]

Ugh. This is the response I was expecting, but I guess I was just hoping there was a better answer out there somewhere. I feel like my hourly rate just got bumped down from 0.7BB/hr to 0.35 by the federal government.

[TwoOuter]

Are you talking about large wins, such as tournament wins or jackpots, where the casino issues you a 1099, or just your total positive balance for the year? In other words, are you just being honest and declaring your gambling winnings on your own? If so, good for you, but I would venture that you're among the 0.001% of the population who does this.

As you probably know, your gambling winnings can be offset by your losses by deducting the losses on Schedule A. These losses can only be deducted up to the amount of your winnings, though. Let's say your share of a bad beat jackpot was $20,000, and those were your only winnings for the year. If you had gambling losses during the year, which you substantiate with strict recordkeeping, up to $20,000 of those losses could be deducted. This would make your tax liability from gambling ZERO.

[TwoNiner]

as well as your profit for the year. /images/graemlins/wink.gif I don't think anyone is going to pay taxes on losses for the year.

[TwoOuter]

Who said anything about paying taxes on losses, TwoNiner?

[Spyder]

Heh....so, tell me AGAIN why Tax cuts are bad? /images/graemlins/wink.gif

Spyder

[Richie Rich]

Does the IRS closely monitor people's online winnings? I wouldn't put it past them, per se, but are they really coming down on people for not declaring, say, $2K in winnings over the last 12 months?

Any feedback from someone who has been playing for a while and not declared winnings on their tax forms, or someone who has received that ever-so nice letter from the IRS, would be much appreciated.

[Sloats]

This could be an aggressive interpretation, but if one views their gambling online as a profession, or side profession, then the room in the house that the work is done can be viewed as a home office. I believe then one can use a proportion of one's internet service as a business expense, recognize depreciation on one's computer, and finally declare the ratio of the room/home office's square footage to the entire house's square footage against one's mortgage as an expense.

But, again, I'm a failed pension actuary, not an accountant.