What I learned about taxes today.

[jasonHoldEm]

Disclaimer: I'm not an accountant, this post is meant for general info only. Your mileage may vary.

I met with my accountant today, it was a pretty interesting expereince. First, cause I'm 25 and have never had professional help before, second because my accountant is very cool.

We discussed the issues at hand and he did an excellent job of explaining the way one goes about reporting gambling income. Basically, there are two levels of gambling income. You either play as a "hobby" or as a "business", depending on your level of involvement, not necessarily the amount that you won.

To make it clear, claiming only your net winnings is illegal.

If you are a "hobby" gambler you basically claim your gross winnings on your 1040 and then you can deduct your losses. This is the catch-22 for most hobby players, because the standard deduction is usually larger than your itemized losses, so you end up paying tax on your gross winnings. Once again, claiming only your net earnings is illegal and you will get burned if audited. I filed as a hobby player for 2003; however, I was (lucky?) enough that my total losses were larger than the standard deduction so I will only be paying tax on my net earnings.

The other side of the coin is the professional gambler. When you reach professional status you are allowed to deduct expenses that are "necessary" to pursue the enterprise. Examples would include travel/lodging for tournaments, possibly a computer for an online player etc. The catch here is because you are a business you must pay self-employment tax (15%) on your earnings. The self-employment tax is basically the same tax you pay as an employee for Medicare and Social Security. As an employee you pay 7.5% and your employer matches it (for a total of 15%). As a self-employed person you are both the employer and the employee so you get to pay it all.

In addition professional gamblers should report and pay quarterly estimated tax. Apparently some states and local gov'ts will hit you with penalties and interest if you fail to pay quarterly even your first year. I believe the IRS requires this during your second year. We didn't go into detail on this very much, but since I'm planning to file as a professional for 2004 this will be an area we will follow up with.

As far as your records go...

You are required to keep a journal of your gambling records so that you can substantiate your claim if you are audited. There is probably some leeway here, but it should include the date, location, stakes, win/loss, etc. The more detail the better (cover your ass).

If you are unsure of your situation I would highly recommend hiring professional help. I was a little leery to pay for something I probably could have researched and done myself, but I find that having a professional there to assist you is worth it.

After we were "done" with the meeting, we ended up chatting for about 20 mintues about the game, how it works, why I'm able to be a winning player, etc. I always find people's reaction to poker intersting...they just don't understand how it works. Those of us who post on this forum, study the books, etc really do represent such a small slice of the poker world we often lose sight of the fact that most people think it's a luck game and only play for entertainment.

Anyways, I hope this helps point anyone with questions in the right direction.

Peace,
Jason

EDITED TO ADD: My accountant said that a good rule of thumb would be that for every $1 you make in (net) profit you whould expect to pay $.40 in taxes as a professional player. This includes, Federal, State, local, self-employment, etc.

[Jim Easton]

[ QUOTE ]
I was (lucky?) enough that my total losses were larger than the standard deduction so I will only be paying tax on my net earnings.


[/ QUOTE ]

Not exactly. While you do pay taxes on just your net, you have now "lost" your standard deduction.

[MicroBob]

i knew a lot of this stuff already from various sources -
1 - these forums
2 - my dad who is a part-time accountant and does my taxes
3 - Gambler's Guide to Taxes by Walter Lewis

still...there were a couple of tid-bits in there that i was unaware of. good summary.

and a good reminded to keep accurate daily records...an idea that is reinforced time and time again in gambler's guide to taxes.

that 40% bit kind of ticks me off.
i'm moving to canada....or peru....or somewhere.

[Jim Kuhn]

40% could be quite low. If you have another considerable source of income all poker winnings could be in your marginal tax rate. For many this would be 28% federal, up to 6% state, up to 1% city and up to 15% FICA. You could be paying 50% or more.

If you do not currently itemize, the standard deduction could eat up all of your losses. This could put your poker tax rate at 100%. Please correct me if I am wrong.

[jek187]

[ QUOTE ]
I always find people's reaction to poker intersting...they just don't understand how it works.

[/ QUOTE ]

I had a similiar experience with my accountant yesterday. I filed as a pro gambler, and 2003 was my year of pro gambling. When she told me my four figure tax liability (which was about what I expected) she then said "hope you hit something big soon." *sigh*

Another thing that seemed to be a source of puzzlement for her was that I didn't receive a 1099 from any of the sites. This is more of an American thing, as many people seems to think these sites in Antigua, Gibraltar, Costa Rica, wherever, care about American tax forms.

[MicroBob]

you may be better off searching for an accountant that potentially has a better understanding of internet-gambling laws.
easier said than done i am aware...but you're accountant seemed rather inaware.

[PuppetMaster]

Personally I think the governemnt should take atleat 50%, god knows they deserve it.

I also think they should start taxing the air. It should be a requirement to keep track of the hours you psend exercising, and then based on age and weight and athletic ability, the air you used will be taxed. (Exemptions for those who plant trees.)

[ZeeJustin]

Lol. I saw your Subject line and went into flame mode.

I find it very demoralizing that pro gamblers mostly pay 40% of their winnings. Is this the standard for every American including regular vegas pros? There's gotta be some legal way around this ridiculous number.

The sad thing is that I have absolutely no faith in our government to fix anything like this. There's obvious issues w/ Bush and WOMD in Iraq, and now he is coming out of the closet as the full-blown biggot that he is trying to ban gay-marriage.
/rant off

[MicroBob]

my beliefs are anti-Bush also....but it would probably be wise to keep such politcal conversations to the other-topics forum.

when i want to witness a repub-vs.-demos. flame war i can watch cross-fire on cnn or some other similar talking-head program (yelling-head program??).
this isn't the place and only serves to take the discussion away from poker.

[PuppetMaster]

[ QUOTE ]
Lol. I saw your Subject line and went into flame mode.

I find it very demoralizing that pro gamblers mostly pay 40% of their winnings. Is this the standard for every American including regular vegas pros? There's gotta be some legal way around this ridiculous number.

The sad thing is that I have absolutely no faith in our government to fix anything like this. There's obvious issues w/ Bush and WOMD in Iraq, and now he is coming out of the closet as the full-blown biggot that he is trying to ban gay-marriage.
/rant off

[/ QUOTE ]
If I only played in a B&M, I would keep all my money in cash and declare nothing.

[UncleDuke]

[ QUOTE ]
To make it clear, claiming only your net winnings is illegal.

[/ QUOTE ]

Did your accountant tell you how to determine how to separate your gains from your losses? Obviously nobody (I think) is going to add up every dollar won in winning hands separately from every dollar lost on losing hands, but would you add it up by day (winning days one column, losing days the other), by site/location, or what?

Thanks,
UD

[jasonHoldEm]

[ QUOTE ]
Did your accountant tell you how to determine how to separate your gains from your losses? Obviously nobody (I think) is going to add up every dollar won in winning hands separately from every dollar lost on losing hands, but would you add it up by day (winning days one column, losing days the other), by site/location, or what?

[/ QUOTE ]

(By the letter of the law) what they want is your session results, something like this...

Date - Limit - Buy-in - Cashout - Total won - Total lost
8/5 - 1/2 Party - $50 - $60 - +$10 - --
8/6 - 1/2 Party - $50 - $65 - +$15 - --
8/6 - 1/2 Party - $50 - $35 - -- - -$15

So if these were the only days you played you'd have $25 in gross winnings, and $15 in losses that you could deduct.

I would think it could be argued that multiple tables at the same time are essentially a single session (together, so if you win $20 at one table, win 30 at another and lose $40 at the third you have a session win of only $10). This is probably borderline, but there are a lot of grey areas out there. I reported them seperately for 2003, but I am probably going to change this for 2004.

Jason

[UncleDuke]

Thanks, Jason. I've only been keeping records by date, limit, and location, and I thought that was being pretty detailed. Seems like many of us would have on the order of 10,000 entries if we follow the letter of the law. I'm not too worried though since I'm probably going to need to itemize anyway, so my total tax would be the same no matter how I split it. I can't see the IRS getting too bent out of shape if some sort of effort was made and the tax isn't underpaid.

Thanks again for the info.

-UD

[alekhine8]

Thats the same boat Im in. Im already itemizing so thats not an issue - and my understanding is that gambling is excluded from any AGI (adjusted gross income) calculations that would start to reduce your deductions.

Ill pay tax on my winnings and be done with it.

[Beach-Whale]

It's all one long session. Every serious poker player knows that.

[Thythe]

[ QUOTE ]

If I only played in a B&M, I would keep all my money in cash and declare nothing.


[/ QUOTE ]

Yeah I feel the same way. Too bad theres a paper trail online. I feel no moral obligation to pay the taxes, I would only do it cause I'm afraid of being caught.

[rusty JEDI]

[ QUOTE ]
After we were "done" with the meeting, we ended up chatting for about 20 mintues about the game, how it works, why I'm able to be a winning player, etc. I always find people's reaction to poker intersting...they just don't understand how it works

[/ QUOTE ]

Assuming he charged you for his accounting services i hope you charged him for your services.

rJ

[MrDannimal]

How do bonuses factor in? At some sites, they're paid out in a lump sum after meeting a certain goal and at others (UB, for one) they're paid out in smaller pieces.

If I played at a UB 1/2 table and won $15 but also was paid $5 in bonus money, is that a $20 win? If I'd lost $15 and gotten $5 in bonus, is that a $10 loss?

[jasonHoldEm]

[ QUOTE ]
Assuming he charged you for his accounting services i hope you charged him for your services.

[/ QUOTE ]

Heh...I just hope our discussion afterwards wasn't on the clock.

jHE

[jasonHoldEm]

That's a good question...I have no clue. It's still income so I would guess you'd have to factor it in somehow. I wonder how affiliate money works as well. Something to follow up with I guess.

jHE

[Nottom]

I remember reading in "A Gambler's Guide to Taxes" that comps are considered "Gains as a result of Gambling" and therefore count as winnings. Rake kickbacks and bonuses are basically comps offered by the poker rooms so they should count as gambling winnings.

Affiliate payments on the other hand aren't a result of your own gabling so should be considered as just normal income.

[AZMAN]

For playing online, shouldn't one be counting the amount cashed out? Is it like capital gains where you only should count realized gains? That would seem to make the most sense to me...then again tax law isn't always based on logic /images/graemlins/wink.gif

[Thythe]

Probably not technically right again...but I wonder if maybe you could count money into a poker room through money taken out of a poker room as one session. Like you cash into PP with $100 and then cash out with $200 so you call the $100. Likewise if you bought into PP with $100 and came out with nothing you would say $0. This seems to be somewhere inbetween just reporting all gambling as net income and reporting each individual session.

[AZMAN]

Let me use an extreme example...say you buy in for 200 at a blackjack table at 11:30 on Dec.31st. you have 250 dollars at the stroke of midnight...would you say you had winnings of 50bucks for the year?

Just as you don't record every hand, you don't record your stock portfolio at the end of the year if you hadn't sold the stock, just like if you hadn't cashed in chips, just like if you hadn't cashed out and got the check from the site in hand.

PLUS, as a recreational player, is there a way to withhold taxes up front so you don't get hit with a huge penalty? According to the logic in this thread, a huge win at the end of the year will kill ya.

[soooted]

It always surprises me that so many accountants don't give proactive advice... only reactive advice. What your accountant should have told you is IF you are a consistent winner, then you should setup a corporation and pay yourself a very modest salary. This way:

1. by paying yourself a modest salary, you can take advantage of standard deductions.

2. you only pay FICA on your salary, and not on remaining profits

3. the range of deductible expenses is much larger. For example, perhaps your corporation is looking at other products other than just your own play. Any R&D related costs are all deductible. Just keep good records.

4. no estimated tax payments

5. you can outsource to a variety of small business HR services who handle the all the paperwork, including benefits deductions and summary statements at year end to simplify your corporate and personal tax filings.

There are many other minor details. E.g. if you show loss on Schedule C, you can not deduct your medical costs as self-employed. But your corporation can... for most people, this is no big deal as a single corporation owner you do NOT want to have any losses b/c you will be paying taxes on your own salary even though you are showing a loss, ugh!

There is also the double taxation issue for C corps, but that can be mitigated in a variety of ways. You could do an S corp instead but could pay higher initial tax rates. It really depends what income level you're talking which method makes most sense for you.

At this point I'd recommend a standard home business/corporation 101 book.

[driller]

When you consider state and local taxes, we all pay about 40% or more on our income. Why should poker be different? Unless of course you are a consistent loser, which no one on this forum seems to be. /images/graemlins/smile.gif

[NotBannedYet]

Sooted,

I have a slightly OT for you (or anyone here.)

Is there any difference in the tax rate you pay, say, selling Avon as you would filing self employed if all your income comes from gambling (poker?)

I was always under the impression that if you file as self employed, the tax rate is the same no matter your line of work. I am of course just referring to the actual tax rate, not deductions or any other stuff.

[34TheTruth34]

this seems like a great idea in theory, but is it practical and easy enough to do?

[Jim Kuhn]

There is a big difference in poker income. Poker you can actually lose money overall and still pay takes on non-existing income. You win $1000, lose $1000 take the standard deduction and pay taxes on $1000. Is this fair? Is this like any other job? Is this how selling Avon works?

[Jim Easton]

[ QUOTE ]
was always under the impression that if you file as self employed, the tax rate is the same no matter your line of work.

[/ QUOTE ]

Yes, the tax rate is based on your taxable income, the source of the income doesn't matter.

[Inthacup]

As far as your records go...

You are required to keep a journal of your gambling records so that you can substantiate your claim if you are audited. There is probably some leeway here, but it should include the date, location, stakes, win/loss, etc. The more detail the better (cover your ass).



I've been thinking about how to do this effectively. I then realized that if you go to your bonus account on Party and click 'bonus on balance details', you can see what your balance was in your account each day of the year. From that you can see how much you won/lost each day.I think that's about as accurate as I can get. Does anyone else use this method to track session results?

Cup

[astroglide]

http://www.rbstaxes.com/ are a couple of enrolled agents, which is more of a tax specialist than a cpa. they deal primarily with gambling clients, e.g. people on the world poker tour level and vegas pros. their word as well as their mini-book both state that there is no advantage to setting up a corporation, and that filing it as you recommend is explicitly illegal.

[rhwbullhead]

[ QUOTE ]


Affiliate payments on the other hand aren't a result of your own gabling so should be considered as just normal income.



[/ QUOTE ]


So, how would one claim affiliate payments? If you got a few serious people signed up, you could live a modest lifestlye off these alone. Would you file as self-employed (and maybe state your job as sales), or can you claim it as regular income, and take a standard deduction?

[Puffin]

Well I thought being an affiliate was illegal in the US. So claiming it might not be a good idea....LOL

[Hiding]

Can you count the rake as losses or expenses? and if so, how do you keep track?

[ActionBob]

I then realized that if you go to your bonus account on Party and click 'bonus on balance details', you can see what your balance was in your account each day of the year. From that you can see how much you won/lost each day.I think that's about as accurate as I can get. Does anyone else use this method to track session results?

I believe that only shows your maximum balance on each specific day, so it really is not an accurate indicator. Just keep a log with your starting balance when you first play for the day. That certainly can't take more than an extra minute each day and will more accurately track your daily results.

-ActionBob

[Nottom]

[ QUOTE ]
So, how would one claim affiliate payments? If you got a few serious people signed up, you could live a modest lifestlye off these alone. Would you file as self-employed (and maybe state your job as sales), or can you claim it as regular income, and take a standard deduction?

[/ QUOTE ]

Aside from the legal issues involved with being an affiliate, they aren't gambling winnings. To me this means that if you were only an affiliate, but never actually played poker you should be able to take the Standard Deduction.

On the other hand, let say you are a moderate loser at poker but pull in a nice profit as a result of your affiliate status. Now you can only deduct your loses to the extent of you gambling winnings so if you make $10,000 from affiliate payments, but lose $2000 playing poker (win $6000, lose $8000) you can only deduct the $6000 in losses and have to just suck up the other $2000

[Poker blog]

Actually, it's probably likely that your accountant was charging you for the the time that you talked about poker. Hope you enjoyed it.

To me this whole thread is about how the federal government is way too damn big. Not only does government take about 50% of our wages, but it invades our privacy and demands that we every damned penny that we owe.

But maybe that's just me. I'll always vote for candidates who offer me a tax cut.

It's a shame that people aren't talking about getting rid of the income tax and having only a sales tax. Much better economic idea to tax consumption, and thus encourage savings and investment.

[richie]

Geez, I've been reading threads about taxes for 3 or 4 months and it's still as mindboggling as ever. I suppose if you only play at 1 or 2 sites it's probably not too hard to figure out. However, when you start bonus whoring at 10 various sites it becomes complicated. Now add in the different ways you can deposit and withdraw money (Neteller, IGM e-pay bonuses, etc.). Now go to Vegas several times during the year. Now go to your local casino and play 20-30 times per year. Let's see now, that 25 different journals for the entire year. HMMMM /images/graemlins/tongue.gif Let's not forget those online casinos you tried out, or all the scratch tickets you bought. Add in the Powerball lottery tickets you bought and now you're almost ready to start tabulating your wins and losses. /images/graemlins/grin.gif Got my 3-page Neteller report for the year, my online bank statement for the year, my average daily balance report from Party poker ( all 50 pages), my Pokertracker printouts--I'm ready to go. Now all I need to do is determine what constitutes a "session". Anybody still wonder why no one wants to pay taxes on gambling winnings? This is going to be way more insane than the year I had to figure out my gains and losses on a limited partnership investment. Of course I'm exaggerating, but you get the point. /images/graemlins/grin.gif

[PuppetMaster]

[ QUOTE ]
Geez, I've been reading threads about taxes for 3 or 4 months and it's still as mindboggling as ever. I suppose if you only play at 1 or 2 sites it's probably not too hard to figure out. However, when you start bonus whoring at 10 various sites it becomes complicated. Now add in the different ways you can deposit and withdraw money (Neteller, IGM e-pay bonuses, etc.). Now go to Vegas several times during the year. Now go to your local casino and play 20-30 times per year. Let's see now, that 25 different journals for the entire year. HMMMM /images/graemlins/tongue.gif Let's not forget those online casinos you tried out, or all the scratch tickets you bought. Add in the Powerball lottery tickets you bought and now you're almost ready to start tabulating your wins and losses. /images/graemlins/grin.gif Got my 3-page Neteller report for the year, my online bank statement for the year, my average daily balance report from Party poker ( all 50 pages), my Pokertracker printouts--I'm ready to go. Now all I need to do is determine what constitutes a "session". Anybody still wonder why no one wants to pay taxes on gambling winnings? This is going to be way more insane than the year I had to figure out my gains and losses on a limited partnership investment. Of course I'm exaggerating, but you get the point. /images/graemlins/grin.gif

[/ QUOTE ]
its for a loss.

[Jim Kuhn]

[ QUOTE ]
I'll always vote for candidates who offer me a tax cut.


[/ QUOTE ]

Check out the views of the Libertarians for less taxes. The Libertarians prefer much less government, this would bode well for online gambling regulations and taxing the professional gamblers. Here is the link:

http://www.lp.org/issues/

Thank you,

Jim Kuhn
Catfish4U
/images/graemlins/spade.gif /images/graemlins/diamond.gif /images/graemlins/club.gif /images/graemlins/heart.gif

[Poker blog]

When the Libertarians offer a candidate who has a chance of winning who isn't a weirdo...let me know.

[astroglide]

ditto.

[kdog]

[ QUOTE ]
When the Libertarians offer a candidate who has a chance of winning who isn't a weirdo...let me know.

[/ QUOTE ]

I don't even care if the candidates a weirdro. Just show me one with a chance to beat Bush. Until then.............

John Kerry for President.

[Jim Kuhn]

When the Dem's and Rep's see that millions of dollars of advertising and the same old politics is not helping them at the polls they may wake up. I feel that voting for Bush or Kerry would be wasting my vote. They will both cater to big business and PAC's anyway. If third party candidates receive alot of support it would send a big message to the crooked politicians.

Thank you,

Jim Kuhn
Catfish4U
/images/graemlins/spade.gif /images/graemlins/diamond.gif /images/graemlins/club.gif /images/graemlins/heart.gif

[webiggy]

[ QUOTE ]
you may be better off searching for an accountant that potentially has a better understanding of internet-gambling laws.
easier said than done i am aware...but you're accountant seemed rather inaware.

[/ QUOTE ]

why would that be important? Isn't gambling, well, gambling?

pjm

[webiggy]

[ QUOTE ]
It always surprises me that so many accountants don't give proactive advice... only reactive advice. What your accountant should have told you is IF you are a consistent winner, then you should setup a corporation and pay yourself a very modest salary.

[/ QUOTE ]

You know, I am a CPA and have my own S Corp. Technically, you might be correct, but, I'm wondering if the IRS would view this the same way. I am a big proponent of the S Corp from a liability standpoint as well as for tax strategy. However, I'm a little unsure if the IRS would grant an S corp election to professional gambler. Any corp attorneys there?

The nice thing about the S corp is that the "pass-through" earnings from the S corp are not subject to self-emplyment taxes, however the "modest" salary subject to emplyment taxes, which, for all intents and purposes is self-emplyment tax.

This is not intended as a solicitation, but I'm curious, would it be desireable to have some knowledge on how to treat pro gambling as a business from an accounting perspective? I'm thinking that a properly configured QuickBooks database along with a set of accounting "policies and procedures" might be a useful tool to provide a level of credibility to your "business".

iggy

[Poker blog]

Jim -- you don't sound like you have a very libertarian position on campaign finance.

In fact, it sounds like you just vote Libertarian to "send a message." That's fine, but I don't particularly think the system is broken. I think it works pretty darn well.

[Bubmack]

But Where in the hell does the cut-off for a loss and a gain arrive? Is it one sessions loss? by the hand? By the week? Thats why I would say dont keep detailed session records (or at leaSt do not provide them to your cpa or IRS agent)....or you will have to declare gains that are far larger than your true gains. I use monthly records...which were all gains in 2003. If I get audited..so be it...at least i am claiming..if I did it incorrectly...I'll just pass it off to ignorance...and Im a CPA..LOL.

Bubs

[gibs]

I use poker charts to keep track of all my sessions. It has date, game, limits, location, and all that stuff. Would that be sufficient documentation, or does it have to be pen and paper?

[astroglide]

perot got a lot of support and the nader supporter-touted financing assistance for hitting the proper popular percentage. did that change much? it already happened, and nobody cares.

[astroglide]

as already mentioned, according to the gambling tax expert enrolled agents at www.rbstaxes.com (http://www.rbstaxes.com) one cannot (legally) file in that manner.

[astroglide]

how wise of you to post about that /images/graemlins/smile.gif seriously though, logging by session is the accepted way for poker.

[webiggy]

Astroglide,

I read these threads in flat mode, so I responded to the post w/o reading down. RE: EA's, I'm not so sure that their expertise is necessarily any greater than CPA's, (not that I would defend either). I don't believe you need a four or five year degree to be an EA and most strong tax practicioners either have an MS in taxation or are tax attorneys. My experience has been (although I'm not a tax expert) is that by and large EA's are not quite as high on the food chain (your professionals notwithstanding, of course). Having said that, the examination for EA's is obviously more focused on tax compliance issues than the CPA exam. It should be noted though that compliance is the tip of the iceberg when it comes to taxation. The meat of taxation comes in the application of case law and the tax code sections.

[astroglide]

most cpas are not tax specialists, they are accountants. enrolled agents are dedicated to taxes. furthermore, these people literally wrote the book on gambling taxation. i trust their information.

[Kenrick]

[ QUOTE ]


Check out the views of the Libertarians for less taxes. The Libertarians prefer much less government, this would bode well for online gambling regulations and taxing the professional gamblers.

[/ QUOTE ]

I guess you guys missed the biggest (only?) tax cut in the past 10+ years that Bush put into effect, which would have been an even bigger cut if he had gotten his way. I know some people who make around 50k a year who were going on about how Bush's tax cuts only help rich guys, etc. I then asked them if they noticed their weekly paychecks had gotten bigger due to less taxes. They said yes. I asked them if they could remember the last time that happened. They said no.

People may not like Bush on certain issues, but don't ever say he's not for smaller government and less taxes *for all people*. Saying otherwise is simply absurd. People can squabble about the specifics, but at the least it's a step in the right direction. A lot of people don't pay all that much (relatively speaking) in taxes a year, and then when they "only" get a $400 cut they act like it's a bad thing because the "rich" guy who makes a dollar more than they do got back a little more.

You already have a President who is for smaller government and letting you keep more of *your* money.

[Kenrick]

[ QUOTE ]


The sad thing is that I have absolutely no faith in our government to fix anything like this. There's obvious issues w/ Bush and WOMD in Iraq, and now he is coming out of the closet as the full-blown biggot that he is trying to ban gay-marriage.
/rant off

[/ QUOTE ]

A main thing with the WMD's is that it was only a few years ago that Clinton, many Democrats, and even the United Nations thought they were there, and now they are all backpeddling on the subject. Also, here's the key reason for the invasion of Iraq: Since Hussein disregarded pretty much every UN resolution put against him, Desert Storm never really ended.

A big problem with allowing gay marriages is that it opens the door for people to marry their sister or their cat to get a tax break or whatever. What *should* be done is to get government out of ALL marriages. That way people wouldn't feel the need to have government's approval. There are other factors at work on the issue besides whether you think someone is a bigot or not.

I'd like to hear more from anyone who is their own corporation. I had always heard that was the way to go, but this thread has me thinking maybe it's not. I know a guy who won 40k on Party last year and is incorporated, but I think the incoporated is only for the couple small businesses he runs. I haven't asked him if he has done anything about his poker winnings.

[DarkKnight]

You can do better than that.
If you go to the transactions section in "My Account" there you will get every buy-in and cashout.

[moondogg]

Just for clarification:
If, when the year was all said an done, you ended up losing at poker for the year, are you expected/required to file report anything about it?
I have been winning pretty consistently since the fall, but that was after a summer of naive drunken NLHE, so, as far as 2003 is concerned, I probably a loser.

[driller]

Didn't say it was fair. But the tax code is the hand you are dealt. The fact that you can't pay taxes on your net winnings unless you itemize probably isn't the worst example around.

[astroglide]

yes, you are required to report your gains and losses (and pay appropriate taxes) even if you're negative on the year.

[Jim Easton]

[ QUOTE ]
If you go to the transactions section in "My Account" there you will get every buy-in and cashout.


[/ QUOTE ]

Not every, only for that day and your last log-in. That is how I do it, too.

[PuppetMaster]

just wanted to direct anyone's attention who doesnt go there, i probally should have just posted it here where its more lively, but oh well.

[webiggy]

[ QUOTE ]
most cpas are not tax specialists, they are accountants. enrolled agents are dedicated to taxes. furthermore, these people literally wrote the book on gambling taxation. i trust their information.

[/ QUOTE ]

Dude,

I'm a CPA and I hate to quibble with you. It is true that many CPA's are not tax experts. I, for one fall into this camp as the subject matter doesn't interest me enough to be tied to my desk for 12 hours a day, 7 days a week from January to April. However, I did work for one of the largest independent CPA firms in California, I submit to you that MOST of the firm's professionals were tax experts, many of which held masters degrees in taxation and they ALL were CPA's. Further, this firm derived nearly 60% of its revenue from tax related services. Your assertion that CPA's are just accountants is just plain wrong! These guys and gals spend their careers researching tax court decisions and writing opinions based on their research so that their clients can plan accordingly.

As I said, I'm not discounting the expertise of your experts and I'm sure that they know their subject better than most. I am only saying that one can get an EA license after taking a 6 month course from H&R block and passing the EA exam. The same cannot be said for passing the CPA exam as it is a much more broad discipline requiring a Bachelors degree, passing a 2.5 day exam and working under a licensed professional for two years. The more successful tax professionals go much further by obtaining Masters or law degrees in taxation. BTW, I can write a book and self-publish it and sell it. Cynically speaking, it will make me an expert on the contents of the book and possibly not much else.

[astroglide]

dude, you must not hate quibbling that much because you keep doing it. you posed the possibility of using an s-corp for gambling, i said doing it under a corp (legally) yields no advantages, and now you think we're arguing about EAs and CPAs. i only stated their profession and background to back up their statements, not to start a number-crunching holy war. it remains veritable that EAs are for taxes only, and CPAs are not necessarily for taxes only. i never made any implication that they were somehow more talented or worthwhile than CPAs, just that they focused on taxes.

simply, people who know much more than me and you about taxes (and specifically gambling taxes) have published that there is no benefit to gambling under an s-corp. if one does so and uses it to avoid taxation, they are not doing it legally. i only responded to your theory about it to assure people that it's not an advantage according to highly-respected experts in the field.

it's their word, not mine. i'm only relaying it for the benefit of others.

[webiggy]

Whatever. Actually, I didn't pose the "S-Corp" possibility. I was merely responding to a previous poster who did. I suggested, like you had, that it was probably not legal and would likely be denied by the IRS only I did it after you posted first.

Sorry if I misunderstood you.





you're still wrong tho.., /images/graemlins/tongue.gif /images/graemlins/wink.gif

[astroglide]

i responded to his post, then to yours because you didn't seem to notice what i said to him. no worries.

[Bubmack]

True. But consider this. Lets say my hobby is high stakes poker and I make a million dollars a year with my real life business. I play five times during the year. I have the following results:

+100,000
-150,000
+250,000
-150,000
-150,000

for a net 100,000 loss. Well the current way that you claim this income is by recognizing 350,000 in income and placing the 450,000 loss...which is limited to gains of 350,000 as an itemized deduction. But guess what folks...the funny thing is that itemized deductions are phased out at this level of earnings...so this poor clown gets to pay taxes on 350,000 of income even though this sap lost money during the year gambling.

Hmmm, Id say that is very unfair and not the intention of the government. So the system screws the gamlbing rich people...who cares?....but it also screws you (if you are not rich /images/graemlins/cool.gif)since it forces you to put the losses as an itemized deduction. The only way it has no effect is if you would have itemized anyway...regardless of adding your losses or not. If it moves you from standard to itemized...you are getting screwed.

LOL...fun stuff.

Bubs

[astroglide]

are you responding to the right person? i certainly don't believe the present system is fair, and never implied that i did.

[Senor Choppy]

[ QUOTE ]
People may not like Bush on certain issues, but don't ever say he's not for smaller government and less taxes

[/ QUOTE ]

Not going to go into his stance on lower taxes, but let me be the first to say "He's not for smaller government."

You might want to look at the FY 2005 budget that he just submitted here (http://a255.g.akamaitech.net/7/255/2422/02feb20041242/www.gpoaccess.gov/usbudget/fy05/pdf/budget/tables.pdf). For 2004, (all figures to follow in billions of dollars), receipts are 1,798, outlays 2,319, for a deficit of 521 (the largest deficit in US history, coincidentally). GDP is projected to be 11,466. Outlays as measured as a % of GDP comes to 20.2%. If you take a look at the last Clinton budget submitted, (here (http://w3.access.gpo.gov/usbudget/fy2001/pdf/budget.pdf) if you're interested), you'll see that receipts were 2,019, outlays 1,835, with a surplus of 184 (the largest surplus in US history). GDP was projected at 10,156, so outlays measured as a % of GDP would be 18.1%.

Spending under Bush is greater than it was under the previous administration no matter how you look at it, raw $ amount, in terms of % of GDP, and if you measure in 2001 dollars to adjust for inflation. Even assuming 3% per year, which is higher than it has been for this time period, Bush's spending is still 15% greater than Clinton's.

[ QUOTE ]
Saying otherwise is simply absurd.

[/ QUOTE ]

If anything I said above seems absurd, please feel free to point to specifics. My sources were from actual federal budget documents.

[ QUOTE ]
You already have a President who is for smaller government and letting you keep more of *your* money.

[/ QUOTE ]

Actually, we have a President who is for larger government, as well the erosion of personal freedoms, increased privilege for large corporations and society's elite, and above all else the further dumbing down of our country. Lower taxes coupled with irresponsible spending on the part of the federal government (mostly on pork barrel military projects) is not something to be proud of.

[drewjustdrew]

Even if you itemize anyway, you could still be getting screwed. In Illinois, gambling losses are not deductible. I'm sure some other states are the same. I would have to pay 3% to the State on gross winnings claimed on Federal 1040, even though I got to use the deduction for Federal.

[Bubmack]

NO I am just ranting in general. I dont know anyone that would suggest it is fair....except the government. Hopefully no offense taken.

Bubs