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fsuplayer
06-29-2004, 11:06 PM
I was talking with a pro at the Borgata and he said that the way to file taxes for poker winnings was to file as a business.

He said that you could then deduct tourney entry fees, costs of computer equip. that I have since bought for internet play.

He also said that you could deduct your losses against your wins.

Has anybody heard of this and know where to start (other than the obvious of a tax accountant). Just trying to get some details to start thinking about before tax season comes around.

BTW I am a student with no other means of income to worry about filing.

Thanks for any help or advice!

FsuPlayer

astroglide
06-30-2004, 01:54 AM
filing as a business offers no advantage whatsoever. if it is done to file NET PROFIT (as "business income") instead of GROSS WINS with GROSS LOSSES deducted, it's illegal. if you file as a professional you will be able to deduct a number of things.

fsuplayer
06-30-2004, 02:03 AM
What steps do I take to file as a professional?

Also...

If I deduct the cost of a tourny for example, do I have to provide a receipt from the casino?

Any details from anyone who files as a pro would be great!

FsuPlayer

astroglide
06-30-2004, 02:06 AM
you do not need to file as a professional to be able to deduct your losses. you need to keep records of everything as best you can.

fsuplayer
06-30-2004, 02:12 AM
I have heard that if you file as a pro, your income taxes due are in direct relation to the tax bracket your winnings(minus losses) put you in. i.e. $35,000 a year= about a 26% tax bracket...

whereas if you dont file as I pro, they are filed under gambling winnings and taxed at a set 40%, no matter the total of winnings.

Any truth to this at all, or have I heard wrong?

thanks so far astro.

FsuPlayer

eastbay
06-30-2004, 02:14 AM
[ QUOTE ]
I have heard that if you file as a pro, your income taxes due are in direct relation to the tax bracket your winnings(minus losses) put you in. i.e. $35,000 a year= about a 26% tax bracket...

whereas if you dont file as I pro, they are filed under gambling winnings and taxed at a set 40%, no matter the total of winnings.

Any truth to this at all, or have I heard wrong?

thanks so far astro.

FsuPlayer

[/ QUOTE ]

Get the forms and take a look: www.irs.gov. (http://www.irs.gov.)

eastbay

Ulysses
06-30-2004, 02:51 AM
[ QUOTE ]
Any truth to this at all, or have I heard wrong?


[/ QUOTE ]

You've heard wrong. Do a search on either General or Internet forums on "taxes" for countless threads explaining this stuff in detail along w/ pointers to guides/forms/etc.

Senor Choppy
06-30-2004, 04:59 AM
[ QUOTE ]
If I deduct the cost of a tourny for example, do I have to provide a receipt from the casino?

[/ QUOTE ]

Anytime I go to a casino now, I make sure to get a receipt from the deli there or buy in for a quarter at a slot machine and get a cash out ticket to substantiate my records of playing for that day.

AFAIK, there are no absolute rules provided by the IRS for proving that your poker records are accurate, so the more receipts you have, the better.

Kurn, son of Mogh
06-30-2004, 11:09 AM
You're getting a whole lot of bad info. First of all, the IRS is very strict on who can and cannot file as a professional gambler (and thus report that income on Schedule C). Check with a tax accountant to see if you will qualify. My guess is you will not, but it's just a guess.

As for gambling winnings (and poker counts as gambling), you must file all winnings as ordinary income on Form 1040. You may not take the net of winning sessions minus losing sessions and report that (this is expressly forbidden in IRS publication 529).

Your losing sessions must be reported on Schedule A (itemized deductions), which means, to deduct your losing sessions from your winning sessions you must forego taking the standard deduction. You can only report losses less than or equal to wins, which means you cannot report a net loss.

Again, ask a tax accountant what to do.